What is a lease broker? What is a packager?

A lease broker is an individual or firm that arranges lease transactions, commonly involving commercial and industrial equipment, as agent between lessees and lessors – without participating as a lessor – for a commission (fee).  Generally, the commission a lease broker earns is a percentage of the price of the lease transactions.  A lease broker is generally responsible for obtaining a credit application, collecting the financial documents and getting the lease contract signed by the lessee and the lease underwriter, while having no continuing involvement in the transaction after the closing.  A lease broker may act as a “super broker” or packager.

A super broker is usually a very experienced lease broker that as a broker’s broker coordinates lease transactions between other lease brokers and leasing companies and advises on closing the transactions.  They locate prospective lessors to whom they submit lease and credit applications, using their own documentation, without conducting credit investigations.

Super Broker Relationships

Source:

A packager is a lease broker that is specialized in structuring and negotiating the whole transaction, generally big-ticket leasing, on behalf of the other parties, for a commission, typically using and signing the lease documents in its own name (i.e., private labeling).  The range of services provided by a packager commonly include finding the lessee, locating the lessor, obtaining the lease and credit applications, conducting the credit investigations, submitting a full documentation package to the prospective lessor, working with the equipment manufacturer and securing debt and possibly equity financing required by the lessor to finance the purchase of the equipment.  Lease packagers commonly retain the option to purchase the equipment.