ss_blog_claim=bd50edc517cf0b7549fe6b5f63b6b5f8 The SLS Business Finance Blog: Structured Finance

Friday, August 29, 2008

Structured Finance

What is Structured Finance?

The most common lease structures have a residual and final payment of Fair Market Value (FMV), 10% of Value new or $1. Anything that falls outside those structures is considered structured finance. This occurs most often when there is a 'story' about the company or the equipment it wants.

For example, if a company has excellent cash flow but poor credit of the owners then a structured deal might look something like this:

Instead of zero, 1 or 2 payments down, 15% down with a 36 month lease with a residual value of 15% of value new.

Structured finance allows for more deals to be done by lessors and for more customization of programs for the lessee. It's a real win/win/win

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