LeaseForce International - Commercial Equipment Leasing, Financing & Consulting Service Provider

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MACRS

(U.S. tax based) An acronym for the Modified Accelerated Cost Recovery System, one of several common depreciation methodologies used for federal income tax purposes.

MACRS Class Life

(U.S. tax based) The depreciable period to which an asset is assigned for depreciation deductions for federal income tax purposes. Presently there are six tangible property depreciation duration classifications (3, 5, 7, 10, 15 and 20 year).

Maintenance Agreement/Contract

A binding agreement and/or contract for the ongoing servicing, repair and upkeep of commercial equipment.

Maintenance Lease

A lease in which the lessor has an obligation to keep the equipment in good working order (i.e. a service lease or operating lease)

Maintenance/Maintenance Cost

The ongoing servicing, repair and upkeep of commercial equipment and its related cost.

Maker

A person who executes a document or instrument

Manufacturer Lessor

A lessor who constitutes a division or a wholly owned subsidiary of a manufacturer.

Market Value

A shorthand reference to fair market value.

Markup

1. (Leasing based) An increase in the capitalized cost of a lease, added by the lessor over and above what the lessor paid for the asset; Markup’s often represent an additional profit mechanism to the lessor, and may or may not be disclosed to the lessee. 2. The aggregate difference between what a buyer pays for an asset and then subsequently sells it for (i.e. terminology is most often associated with the a retail operation or industry).

Master Lease

A binding lease agreement comprised of two parts: (1) a document that sets forth the general terms and conditions applicable to all subsequent leases and lines of credit between the parties executed pursuant to such master lease and (2) one or more schedules in which various leased property is added in installments over time, with each installment being subject to the same general terms and conditions as the other installments, except as to those terms specifically addressed in the schedule (i.e. lease term, periodic payment amounts, frequency of payment, payment location, etc.).

Mechanic’s Lien

A lien and binding legal encumbrance against physical property, provided by law to a party who repairs or similarly adds value to an item of property which secures payment for that party's contracted and subsequently provided services.

Mediation

A legal dispute resolution procedure in which a settlement is sought through negotiation and the act of persuading respective parties, rather than the binding legal decision of a third party; a settlement will be reached in a mediation only if the parties agree, and by its nature cannot be legally or otherwise enforced if all parties do not agree in entirety.

Merger

The acquisition of one business by another, typically with the absorption of the acquired business into the operations of the acquiring business.

Mergers and Acquisition

The business activity of buying, integrating, consolidating and selling businesses and companies.

Middle Market

The transactional oriented leasing market typically involving transactions in the US$100,000 to US$3,000,000, range and sometimes as high as US$5,000,000 range of aggregate equipment cost.

Mid-Quarter Convention

(U.S. tax based) A penalty convention that is applied if a taxpayer acquires more than 40% of its depreciable assets in the last quarter of its tax year; the convention treats all depreciable assets as if they were acquired in the middle of the quarter in which they were acquired, which usually results in significant reductions of depreciation deductions over what they would have been without the convention having been applied.

Mini-Lease

A lease application that is processed with minimal or relatively no credit review; Mini-leases typically involve only a quick high level review of the application itself, with the possibility of very limited trade and bank reference checks (i.e. a/k/a quick leases or an app-only lease).

Minimum Lease Payments

(Accounting based) The payments that must be aggregated prior to discounting calculations for purposes of determining whether the lease is a capital/finance lease or operating lease pursuant to the applicable accounting standards for the respective country reporting the leasing/financing transaction. From the lessee perspective, all lease payments that are required to be made, may be required to be made or, in all probability,will be made to the lessor per the lease agreement. Minimum lease payments for the lessee include, but are not limited to_ the lease payments (excluding executory costs) during the noncancellable, lease term, bargain purchase options, any put purchase options, the amount of any lessee residual guarantees and nonrenewal penalties that are sufficiently severe to cause renewal. Minimum lease payments for the lessor include all payments to be received from the lessee, as described above, as well as the amount of any residual guarantees by unrelated third-party guarantors.

Modified Accelerated Cost Recovery System

(U.S. tax based) One of several utilized depreciation methodologies for federal income tax purposes.

MOF

An acronym for Ministry of Finance; most developed and developing countries maintain a Ministry of Finance or its equivalent.

MOFTEC

(China based) An acronym for the Ministry of Foreign Trade and Economic Cooperation. MOFTEC is the government agency that licenses joint-venture lease companies in China.

Monetary Policy

A government's macroeconomic effort to manage the economy through increasing or decreasing the supply of money

Money-Over-Money Lease

A quasi-lease in its true form. This type of lease is a conditional sales contract in the guise of a lease, in which the lessee is, or will become, the owner of the leased equipment by the end of the lease term, and, therefore, is entitled to the tax benefits of ownership. To a funding source, the term money-over-money indicates that the lease is a full-payout lease with no reliance upon the residual for repayment of the cost of equipment and interest earnings

Mortgage

An encumbrance upon real or personal property to secure repayment of a loan or other advance of funds; mortgages of personal property are often referred to as “chattel” mortgages.

Mortgage Banker

A banker who specializes in real estate mortgage finance

Mortgagee

The party who receives the benefit of a mortgage, typically a party who has provided a loan to the mortgagor and who has received the mortgage as collateral for such loan.

Mortgagee’s Waiver

A document wherein a mortgagee acknowledges that certain property on its mortgagor’s premises is owned by a third party, (i.e., the lessor), and is leased to the mortgagor and wherein the mortgagee agrees to recognize and not interfere with the lessor’s rights respecting its property.

Mortgagor

The party who mortages its property

Municipal Lease

A lease with a municipality or other governmental body (i.e. local, state or federal) that is typically structured as a conditional sales contract disguised in the form of a lease and available only to municipalities, and in which the interest earnings are tax- exempt to the lessor.

Muni-Lease

An abbreviated reference to a municipal lease.