Equipment & Infastructure
More than 78 percent of U.S. businesses utilize equipment financing. These companies range from the largest investment-grade firms and municipalities all the way to venture capital–backed emerging-growth firms.
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The attraction of past equipment leasing programs has been based on several factors:
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Consistent cash flow: Fixed lease payments provided for consistent and high distribution rates throughout the operating periods of most programs.
Low correlation: Thoughtfully underwritten leasing receivables have a demonstrable ability to withstand the biggest hits to both equity and debt markets.
Strong collateral position: Leases typically provide lessors with a purchase money security interest (PMSI), meaning the lessor legally owns the equipment. Contrast this with a loan where the lender may have a lien on an asset, which is a significantly weaker position than a PMSI.