When
you put OK Champion equipment to work, you can be
assured of obtaining maximum performance time after
time. And, to add one or more of our underground units
to your existing equipment fleet, turn to our team
to provide the customized financing options that help
you make an investment that always delivers an excellent
return.
When
you contact OK Champion, we will put you in touch
with a lending professional who specializes in utility
equipment financing options, including:
Financial
Terms: A Glossary
TRAC
(Terminal Rental Adjustment Clause) Lease:
This structure is normally considered a true lease
by the IRS allowing for the immediate deduction of
each payment as a normal business expense. The residual
is determined at lease origination and is appropriately
based upon usage, lease term and projected value.
Most often the lessee (customer) may purchase the
leased equipment at the end of the lease for this
predetermined amount, or the equipment may be returned
under the terms of our agreement or traded-in at lease
maturity.
Closed-End
Lease:
This instrument is a non-cancelable rental agreement
with the ownership of the vehicle remaining with the
leasing company (lessor) during the lease term. At
lease expiration, the vehicle may be returned, purchased
for its then fair market value or rented on a month-to-month
basis. A closed-end lease typically offers lower payments
than traditional debt products and shifts the burden
of obsolescence and equipment disposition to the leasing
company. Payments under this product are most often
tax deductible for federal income tax purposes. Under
specific circumstances (FASB 13 conforming), closed-end
leases may not require balance sheet disclosure, thereby
maintaining or enhancing key financial ratios.
Open-end
Lease, Equipment Financing Agreement & Traditional
Debt Products:
These transaction structures are most often accounted
for as loans for financial reporting and federal income
tax purposes. Depreciation and interest are recognizable
expenses. Upfront costs, as with our other offerings,
are minimal and structures can include balloon payments,
thereby providing even lower monthly payments. Vehicle
ownership is vested with the borrower/lessee.
