Mexico
CIT Latin America, Mexico, designs customer financing programs for equipment suppliers in a wide range of industries. We work with our clients and suppliers to reach the best solutions based on their particular needs.
Our two principal products are true leases and financial leases.
Operating Lease
The operating lease allows the customer the "use" of the equipment during a determined period, without having the obligation to purchase it, making the process of technological refreshment easier. Under this figure, the customer transfers 100% of the risk of technological obsolescence and all the costs of this process to CIT. At the end of lease, the customer has three different alternatives:
- return the equipment and make a technological refresh,
- renew the contract over the same equipment for the term of their convenience (payments in most cases reduce depending on the term of the renewal), or
- buy the equipment for the Fair market value.
Operating leases have been offered through the Arrendadora Capita Corporation, S.A. de C.V., since 1994.
Finance Lease
A Finance Lease is a contract in which a financial company gives to the customer the right to rent equipment, with the terms and conditions defined for both parts. The customer could buy the equipment using a purchase option, as defined in the contract.
The main difference between a Finance Lease and Operating Lease is that the Finance Lease has a defined purchase option in the contract that is usually 1 percent. The Operating Lease allows the customer to buy the equipment, but the purchase option will be defined at Fair Market Value at the end of lease. The law does not allow in an Operating Lease to determine the purchase option at the beginning of the lease.
There are also some tax differences between Operating and Finance Leases. In general terms, in Operating Leases, the full amount of rentals is tax deductible. In Finance Leases, this is not always the case. If you need further information about tax-related issues, please contact us.
Financial Leases have been offered by CIT through The Capita Corporation de Mexico S.A. DE C.V. O.A.C., since 1995.