Vehicle lease was structured as a Split-TRAC, GAAP operating lease to preserve the client’s bank covenant ratios while second master lease was structured as a reverse synthetic lease (capital lease for GAAP, operating lease for federal tax) and required approx. 6 months of progress funding to multiple vendors
|Equipment:||Waste collection vehicles and equipment used in converting Dual Stream Recycling Systems to Single Stream Recycling Systems|
|Lessee:||The Lessee is an integrated regional solid waste services company that provides collection, transfer, disposal, recycling and resource management services to residential, industrial and commercial customers, primarily throughout the eastern United States.|
|Transaction:||$21,778,576 – Vehicles Structured as an 84 Month Split TRAC, GAAP Operating Lease
Single Stream Recycling Systems Structured as a Reverse Synthetic Lease
|Competition:||The client chose CGCF over competing banks and finance companies as we took the time and applied our expertise to understand their unique operational and reporting and compliance requirements; we then provided the appropriate transaction structures to achieve the desired results. Additionally, CGCF provided more competitive pricing, additional capacity, and a progress funding facility required for the construction of the recycling systems.|
|Highlights:||The vehicle lease was structured as a Split-TRAC, GAAP operating lease to preserve the client’s bank covenant ratios while still maintaining the benefits of ownership upside of a TRAC (Terminal Rental Adjustment Clause) lease.
The second master lease was required for the project funding of recycling systems for two major U.S. northeast cities. Conversion of the recycling systems from dual-stream to single-stream improves processing efficiency and community recycle rates. This lease was structured as a reverse synthetic lease (capital lease for GAAP, operating lease for federal tax) and required approx. 6 months of progress funding to multiple vendors.
“I have had the pleasure working with CG Commercial Funding (CGCF) regarding the leasing of our titled vehicle waste and recycling trucks. CGCF’s finance teams have been professional, responsive and courteous. I found CGCF’s lease financing, accounting knowledge and structuring expertise to be extremely beneficial while completing our analysis. CGCF competed against a group of competitive financing companies and ultimately earned our business by:
- Engineering a structure that maximizes cash flow and provides improved debt coverage ratios.
- Providing the most competitive pricing.
- Most importantly, they provided a Split TRAC lease structure with stated monthly termination provisions which gives us maximum flexibility and the off balance sheet treatment from a GAAP perspective.
I would recommend CG Commercial Funding to any company in need of any type of structured equipment finance.”
Director of Financial Operations, Casella Waste Syste