Lessee’s industry: Construction or developer
Equipment requested: Two tower cranes, manufactured in Europe
Term requested: 48 months
Contract: Operating lease
Cost of equipment: $1,390,000

Special client & vendor requests:

• Vendor requests payment in advance prior to manufacturing and delivering of cranes
• Vendor requests prepayment of insurance, inland freight charges, from plant to dock
• Vendor requests prepayment of shipping charges from European dock to Puerto Rico docks
• Client requests CIT to advance all the necessary funds to vendor, prior to delivery
• Client requests a deferred first payment of 120 days

How CIT delivers:

CIT Puerto Rico develops a solution that meets all vendor and client requests. The financing is structured as follows:

• Operating lease agreement contract
• Term of contract: basic term of 48 months First monthly payment due 120 days
• Delivery and acceptance: CIT Financial wires vendor for the total cost of equipment of $1,390,000, as well as transportation, insurance, and shipping charges
• Monthly rent for the lease contract of 48 months is lower than a similar transaction on a full payout lease contract
• Client obtains the following options at the end of the lease contract:
  • purchase the equipment at the Fair Market Value (FMV)
  • return the equipment to CIT (without any additional obligation), provided all the covenants and terms of lease agreement are met 
  • re-lease for an additional year the contract at the same monthly rental
  • return the equipment, and negotiate a new lease agreement on new equipment with the latest technology in the industry