CLFP Equipment Lease and Financing Documentation Exam
Certified Lease & Finance Professional (CLFP) Comprehensive
Questions and Answers with Expert Solutions and Exam
Preparation Material
Introduction:
This document contains comprehensive questions and answers for
the CLFP Equipment Lease and Financing Documentation Exam,
covering lease agreements, UCC filings, guarantees, D&A
documents, corporate resolutions, default provisions, remedies,
insurance requirements, and financing structures. It explains key
documentation concepts used in equipment leasing and finance,
including true leases, EFAs, pre-funding agreements, security
interests, and purchase options.
The material is designed as a complete exam preparation resource
with detailed explanations and practical definitions relevant to
lease and finance professionals. It also includes terminology and
legal concepts commonly tested in CLFP certification exams.
Exam Questions and Answers
With respect to documentation what is Service Charges/Late Fees? -
-- correct precise answer ---A key element of a lease agreement
that clearly spells out the charge imposed on late payments.
Typically defines a specified "grace period".
Late fees should be reasonable and cover cost. If construed as a
penalty or bolster return, it may be unenforcable
,With respect to documentation, what is Time is of the Essence? ---
correct precise answer ---A key element of a lease agreement that
indicates that all payments are other contract performance must be
completed in a timely manner. Should also include language that
"time is of essence" throughout the lease even if late payments are
accepted earlier in the lease.
With respect to documentation, what is Default Provisions? ---
correct precise answer ---A key element of a lease agreement that
sets forth events that are deemed to be a "default" triggering
remedies including
1.) failure to pay when due
2.) failure to pay other amounts due
3.) failure to meet non monetary requirements
4.) Equipment events (destroy, damage, moved etc.)
5.) lessee false statements
6.) financial covenants
7.) death
8.) bankruptcy
With respect to documentation, what are Remedies? --- correct
precise answer ---A key element of a lease agreement these specify
remedies in the event of default. Remedy language should be
worded as 'cumulative' meaning one or more can be done.
Examples
, 1.) return of equipment
2.) Cancel or terminate lease
3.) Accelerate payments
4.) payments of damages by formula (best in repo only)
With respect to documentation, what is Cross Default Clause? ---
correct precise answer ---A key element of a lease agreement
provides language that allows a lessor to default one or all of the
leases with a single lessee when when one lease defaults.
With respect to documentation, what is Provision Regarding
Multiple Lessees? --- correct precise answer ---A key element of a
lease agreement that provides that liability is "join and several"
which means that all co lessees are equally responsible . This
prevents solvent parties from not paying when non-solvent parties
do not pay.
With respect to documentation, what is Attorney's
Fees/Enforcement Fees? --- correct precise answer ---A key
element of a lease agreement that states enforcement fees are only
recoverable if agreeable by both parties. May also state these fees
are recoverable by "prevailing party".
With respect to documentation, what is Severability? --- correct
precise answer ---A key element of a lease agreement that states
Certified Lease & Finance Professional (CLFP) Comprehensive
Questions and Answers with Expert Solutions and Exam
Preparation Material
Introduction:
This document contains comprehensive questions and answers for
the CLFP Equipment Lease and Financing Documentation Exam,
covering lease agreements, UCC filings, guarantees, D&A
documents, corporate resolutions, default provisions, remedies,
insurance requirements, and financing structures. It explains key
documentation concepts used in equipment leasing and finance,
including true leases, EFAs, pre-funding agreements, security
interests, and purchase options.
The material is designed as a complete exam preparation resource
with detailed explanations and practical definitions relevant to
lease and finance professionals. It also includes terminology and
legal concepts commonly tested in CLFP certification exams.
Exam Questions and Answers
With respect to documentation what is Service Charges/Late Fees? -
-- correct precise answer ---A key element of a lease agreement
that clearly spells out the charge imposed on late payments.
Typically defines a specified "grace period".
Late fees should be reasonable and cover cost. If construed as a
penalty or bolster return, it may be unenforcable
,With respect to documentation, what is Time is of the Essence? ---
correct precise answer ---A key element of a lease agreement that
indicates that all payments are other contract performance must be
completed in a timely manner. Should also include language that
"time is of essence" throughout the lease even if late payments are
accepted earlier in the lease.
With respect to documentation, what is Default Provisions? ---
correct precise answer ---A key element of a lease agreement that
sets forth events that are deemed to be a "default" triggering
remedies including
1.) failure to pay when due
2.) failure to pay other amounts due
3.) failure to meet non monetary requirements
4.) Equipment events (destroy, damage, moved etc.)
5.) lessee false statements
6.) financial covenants
7.) death
8.) bankruptcy
With respect to documentation, what are Remedies? --- correct
precise answer ---A key element of a lease agreement these specify
remedies in the event of default. Remedy language should be
worded as 'cumulative' meaning one or more can be done.
Examples
, 1.) return of equipment
2.) Cancel or terminate lease
3.) Accelerate payments
4.) payments of damages by formula (best in repo only)
With respect to documentation, what is Cross Default Clause? ---
correct precise answer ---A key element of a lease agreement
provides language that allows a lessor to default one or all of the
leases with a single lessee when when one lease defaults.
With respect to documentation, what is Provision Regarding
Multiple Lessees? --- correct precise answer ---A key element of a
lease agreement that provides that liability is "join and several"
which means that all co lessees are equally responsible . This
prevents solvent parties from not paying when non-solvent parties
do not pay.
With respect to documentation, what is Attorney's
Fees/Enforcement Fees? --- correct precise answer ---A key
element of a lease agreement that states enforcement fees are only
recoverable if agreeable by both parties. May also state these fees
are recoverable by "prevailing party".
With respect to documentation, what is Severability? --- correct
precise answer ---A key element of a lease agreement that states
