THE LEASE

EXIM supports competitive medium-term financing structured in the form of finance leases in addition to financing structured in the form of installment loans. Leasing support is important because some foreign buyers of U.S. capital goods prefer leasing as an alternative to traditional installment loans. EXIM will guarantee lease financing of U.S. goods and services to creditworthy international lessees, both private and public, when financing is not otherwise available or applicable interest rates are not economically viable.

Standardized documentation

In order to provide accessible security support for leasing financing, EXIM has created standardized security documentation designed to meet the specific requirements of this type of export financing. The MT Guarantee Framework Agreement – Leasing provides equivalent EXIM support for medium-term finance leases, as is the case for traditional loan financing using EXIM Bank’s MT Guarantee Framework Agreement. Both guarantee framework agreements are compatible with the operational efficiency of EXIM Bank’s Medium-Term Electronic Compliance Program.

EXIM supports competitive medium-term financing structured in the form of finance leases in addition to financing structured in the form of installment loans. Leasing support is important because some foreign buyers of U.S. capital goods prefer leasing as an alternative to traditional installment loans. EXIM will guarantee lease financing of U.S. goods and services to creditworthy international lessees, both private and public, when financing is not otherwise available or applicable interest rates are not economically viable.

 

Standardized documentation

In order to provide accessible security support for leasing financing, EXIM has created standardized security documentation designed to meet the specific requirements of this type of export financing. The MT Guarantee Framework Agreement – Leasing provides equivalent EXIM support for medium-term finance leases, as is the case for traditional loan financing using EXIM Bank’s MT Guarantee Framework Agreement. Both guarantee framework agreements are compatible with the operational efficiency of EXIM Bank’s Medium-Term Electronic Compliance Program.

Benefits:
Allows international lessees to obtain finance leases from lessors
Flexible financing options and repayment terms
Transaction size up to $10 million (funded portion, excluding exposure fees)
Coverage is the lesser of 85% of the contract value or the actual amount of the U.S. content
Eligible leases

Only finance leases (as defined in international accounting standards) are eligible for EXIM guarantee support. Under IAS 17, a lease qualifies as a finance lease if it transfers to the lessee substantially all the risks and rewards incidental to ownership. Full payment leases (i.e. those with no residual value) and transactions that are essentially “conditional sale” contracts are often classified as finance leases.