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

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Sale-Leaseback

A lease transaction wherein a party sells some or all of its assets to another party and then leases them back from that party. Sale-leasebacks allow the seller to convert the equity in its assets into working capital, and most typically involve the sale of equipment to a leasing company and a subsequent lease of the same equipment back to the original owner, who continues to use the equipment, undisturbed.

Sales Tax

A gross tax on the transfer of a good or service to the end-user of that good or service.

Saw-Tooth Rents/See-Saw Rents

Rents that both step-up and step-down in amount over the course of the lease term.

SEC

U.S. based) Acronym for the Securities and Exchange Commission

Section 38 Property

Any asset on which depreciation may be taken.

Secured Creditor

A creditor whose obligation from a debtor is supported by some form of collateral which does not have to be the item of property which was acquired with the creditors advance.

Secured Liability

A liability that is supported by some form of collateral.

Security

1. Collateral for a loan. 2. A type of investment.

Security Agent

A party that manages a pledge or a synidcate of pledgees, typically in connection with pledge collateral securing a syndicated loan (i.e. pledge administrator).

Security Agreement

1. An agreement that creates a security interest. 2. An agreement that collateralizes a loan or other financing transaction.

Security Deposit

A specific amount paid at the inception of the lease, and/or the lease process, by the lessee to insure full compliance with the lease and to provide the lessor with some protection against defaults, delays, or other failures of performance by the lessee. Security deposits are often required in lease transactions to both protect the funding source and as a statement of seriousness on the part of the lessee, during the early lease application phase of the transaction.

Security Interest

An interest in personal property, fixtures, accounts or chattel paper, that secures payment or performance of a debt/service obligation.

See-Through Lease

A financing treated as a lease for accounting purposes and a loan for tax purposes (i.e. broken lease, off-balance sheet loan, synthetic lease).

Service Lease

A lease in that the lessor provides complete service; complete maintenance and care for the leased equipment (i.e. maintenance lease; many operating leases or a gross lease).

Several Liability

A liability involving two or more parties whereby each party is generally liable for only its proportionate share of a particular liability.

Sheqel

The standard monetary unit of Israel.

Shilling

The standard monetary unit of Kenya, Somalia, Tanzania and Uganda.

Short-Term Lease

Typically, a lease with a term less than three years, and often an operating lease.

Single Investor Lease

A tax-oriented lease whereby the lessor achieves its desired rate of return via a combination of the rental payments, depreciation, and the fair market value of the equipment at the end of the original lease term. Because of the value of the benefit, the rental payments will be lower than for a finance lease (i.e. full-payout lease, finance lease, etc.).

Small-Ticket Leasing

Leasing transaction typically under U.S. $100,000, but often as high as U.S. $250,000 to U.S. $300,000.

Soft Taxable Income

Income that is recognized as being received for tax purposes, when in fact, no actual cash has been received (i.e. phantom income)

Sole Proprietorship

A business operated by an individual without a separate legal entity.

Special Products Market

The leasing market involving transactions typically exceeding US$5,000,000 of equipment cost (mega-ticket leasing, very large-ticket leasing).

Spiff

A monetary payment to a vendor/supplier, or the employee of a vendor/supplier, for referral of lease transaction or business (i.e. business based kick-back, commission, referral bonus

Split Rent

Rent split into two components within a given rent period, with one component paid in advance and one paid in arrears within each rent period.

Spread

The difference between what a lessor pays for funding (funding costs) and what the lessor sets as the yield (rate of return) in a lease transaction.

Stale Check

A check that is too old to be negotiated (i.e. cashed).

Stamp Tax

A tax collected upon notarization or other certification of a document.

Statement of Condition

The balance sheet of a bank.

Statement of Financial Accounting Standards

(U.S. based) The accounting standards issued by the Financial Accounting Standards Accounting Board.

Step-Down Lease

A lease in which the periodic lease payments are reduced at some point in the lease term.

Stepped Payment Lease/Stepped Rent

A lease in which the periodic lease payments are reduced and/or increased at some point in the lease term.

Step-Up Lease

A lease in which the periodic lease payments are increased at some point in the lease term.

Stipulated Default Schedule/Stipulated Default Value

A schedule and related aggregate value of the lessee's monetary liability, typically expressed as a percentage of original equipment cost, for a default occurring in a particular periodic during the lease term.

Stipulated Loss Schedule/Stipulated Loss Value

A schedule and related aggregate value of the lessee’s monetary liability at various periods during the lease term. The stipulated loss value is typically expressed as a percentage of original equipment cost and includes the lessor’s estimated residual value on the equipment and associated tax benefits, thus aggregating the lessee’s liability to the lessor if the equipment should become lost, suffers substantial damage or becomes unusable for any reason, other than the fault of the lessor, during the lease term.

Stipulated Termination Value

The value of leased property at given points in time during the lease term as agreed by both lessor and lessee for purposes of determining liability upon early termination of the lease.

Straight Line Depreciation

(Accounting based) Depreciation of a capital asset taken evenly over the tax life assigned to the asset. Straight-line depreciation is typically taken down to the salvage value of the asset.

Street Rate

The so-called yield in the lease, determined by dividing the periodic lease payment by the equipment cost.

Structuring

(1). The determination of a lease payment structure that will preserve and/or maintain a certain targeted yield. (2). The act of pulling together the many components of a lease to arrive at a single lease transaction. Structuring typically includes, but is no limited to, lease pricing, end-of-term options, documentation issues, indemnification clauses, funding and residual valuations.

Sublease

A lease of the originally leased equipment by the original lessee to another lessee.

Sub-Lessee

The additional lessee under a sublease.

Sub-lessor

The original lessee, who is now acting as a lessor of the originally leased equipment to another lessee.

Sublet

The act of subleasing.

Subordinate/Subordination

To make junior in right, title, interest, claim or some other entitlement.

Subordinated Debt

Debt that has been made junior in entitlement of payment to some other debt obligation(s).

Subordination Agreement

A legally binding agreement to make a right, interest, claim or some other entitlement junior to some other right, title, interest, claim or other entitlement.

Substance Over Form

An analysis of the true character of a purported lease transaction on the basis of its economic substance rather than mere acceptance of its label as a lease.

Substitution Provision

A provision in a lease that allows for the replacement of the leased equipment with like-kind equipment.

Successor Liability

The legal doctrine that provides that in some instances a business entity that has acquired the assets of another business entity will be liable for the debts and other liabilities of that previous business. Successor liability is an exception to the general rule that a business acquiring only assets (rather than stock of a company) is not liable for the debt obligations of the acquired company.

Sum-Of-The-Year Digits

A method of prorating interest due for a period less than a year based on the fractional portion of the interest-months remaining before the end of the year. A calendar year has 78 payment months (12+11+10+9+8+7+6+5+4+3+2+1=78), with December earning interest for 12 months, November earning interest for 11 months, October earning interest for 10 months, etc. Thus, a payoff in July would generate 28/78th of a year's interest (i.e. (7+6+5+4+3+2+1=28).

Super Broker

(Leasing based) A value added middleman who brings together large quantities of lessors, lessees, and vendors for the purpose of executing voluminous transactions and who receives a commission for such service.

Supplier

The seller of the equipment to be leased to a prospective lessee and by a specific lessor (i.e. a vendor).

Supply Agreement/Supply Contract

The agreement by which the lessor acquires the right to possession and use of the equipment to be leased. The supply agreement may be a purchase agreement, a lease agreement or some other agreement of transfer.

Surety

One who agrees to answer for the debt or obligation of another if that other party fails to pay or perform; a guarantor.

Surtax

An additional tax added to an existing tax, typically for a short time to meet an extraordinary government need.

Swap

A mutual exchange of certain legal responsibilities between two parties (i.e. currency swap or interest rate obligations).

Swap Facility

An ongoing arrangement that allows for the periodic mutual exchange of certain legal responsibilities between two parties.

Synthetic Lease

A financing treated as a lease for accounting purposes and a loan for tax purposes (i.e. broken lease,