CLFP - CLASS REVIEW STUDY
Are UCC 9 required for Leases? - Answer - No but good idea
- In the event transaction not found to be lease, secured creditor has rights to
equipment in BK
Define 'doing business in' another state - Answer - Visit often
- Agent present presence of agent
- Tax paid
- Office
Early examples of true lease? - Answer - Phoenicians shipping experts
- charters covered economic life of ships
- lessee to assume benefits and obligations of ownership
How are Partnership Tax Liabilities treated? - Answer income or losses of partnership
are divided among owners.
How can SWOT help marketing plan - Answer - help you take advantage of what you do
well
- avoid what you do not do well
- focus on biggest opportunities
- avoid risk
How does FASB 13 define an operating lease? - Answer B - bargin purchse option -
NOT
E - economic useful life > 75% - NOT
A - automatic title transfer - NOT
P - PV of payments (no resid) > 90% of FMV - NOT
How does IRS 55-540 define true lease? - Answer P - payment exceed FMV - NOT
A - automatic titletransfer - NOT
I - interest contained in payment - NOT
N - nominal purchase option - NOT
E - equity in lease - NOT
E - excessive lease payments - NOT
How is Outsourcing viewed in the leasing industry/ - Answer it is a good management
practice.
How is the selling process conducting porcess conducted across many different
companies? - Answer - all companies handle differently
- some buy lists, some cold call, some vendor, some broker etc.
How long is UCC good for? - Answer 5 years
,How many owners are required in a LLC? - Answer one (1)
In BK, lease or secured lender more likely to get equipment back? - Answer Lease
Key Elements of Lease Transaction? - Answer - lessee must sign
- lessor must sign
- paid invoice is transfer of ownership
- paid invoice is not transfer of title
Lease Intended As Security - Answer Transaction which is written in the form of a lease,
but the substance is a conditional sale contract or a loan with a security agreement on
the property.
Lessor can only pursue principal with respect to which types of entities? - Answer - sole
proprietor
- general partner
List Accounting Lease Classification - Answer Operating, Capital Loan
List Legal Lease Classification? - Answer Lease, secured financing, unsecured
financing
List Tax Lease Classification? - Answer Tax Lease (True Lease), Non Tax Lease (Non
True Lease) (aka conditional sale)
Name five forms of Vendor Fraud? - Answer - bunk lessee
- bunk equipment
- false sale leaseback
- bunk signature
- side agreements
- inflated prices
- used vs. new
Sales-Type Lease - Answer From the lessor's perspective - a capital lease that gives
rise to manufacturer's or dealer's profit to the lessor
To gain PMSI, how long do you have to file UCC? - Answer 20 days
To test a scenario in which a PMSI or Blanket Lien prevails, what needs to be
analyzed? - Answer - is secured transaction?
- UCC filed in 20 days?
- did lessor pay for majority of equipment?
What are advantages of Brokering? - Answer - requires little/no capital
- easiest
, - no servicing required
What are advantages of Discounting? - Answer - lower COF
- flexibility
- brand identity
- increased revenue
- retains customer
What are advantages of Equity/Debt funding? - Answer - retain long term economic
benefit
- control - underwriting, funding etc
What are advantages of Securitization? - Answer - low cost of funds
- potential off balance sheet (bk remote company)
- access to capital markets
What are characteristics of a strong sale person? - Answer - on time
- organized
- take initiative
- empathetic
- understands sales cycle
- knowledgeable
- works well with others
- team player
What are CLFP's thoughts on spiffs/rebates? - Answer CLFP frowns upon them
What are common reserve targets? - Answer 1.5 - 2 times annual losses
What are disadvantages of brokering? - Answer - limited profit
- lacks control
- loss long term relationship to funding source
What are disadvantages of Discounting? - Answer -significant reps and warranties
- retains some risk (i.e. residual)
- requires working capital
- potentially less upfront profit.
What are disadvantages of Equity/Debt funding? - Answer - risk
- limited capital
- large back-office requirements
What are disadvantages of Securitization? - Answer - requires expertise
- huge cost to conduct
- time consuming
- need uniformity in assets
Are UCC 9 required for Leases? - Answer - No but good idea
- In the event transaction not found to be lease, secured creditor has rights to
equipment in BK
Define 'doing business in' another state - Answer - Visit often
- Agent present presence of agent
- Tax paid
- Office
Early examples of true lease? - Answer - Phoenicians shipping experts
- charters covered economic life of ships
- lessee to assume benefits and obligations of ownership
How are Partnership Tax Liabilities treated? - Answer income or losses of partnership
are divided among owners.
How can SWOT help marketing plan - Answer - help you take advantage of what you do
well
- avoid what you do not do well
- focus on biggest opportunities
- avoid risk
How does FASB 13 define an operating lease? - Answer B - bargin purchse option -
NOT
E - economic useful life > 75% - NOT
A - automatic title transfer - NOT
P - PV of payments (no resid) > 90% of FMV - NOT
How does IRS 55-540 define true lease? - Answer P - payment exceed FMV - NOT
A - automatic titletransfer - NOT
I - interest contained in payment - NOT
N - nominal purchase option - NOT
E - equity in lease - NOT
E - excessive lease payments - NOT
How is Outsourcing viewed in the leasing industry/ - Answer it is a good management
practice.
How is the selling process conducting porcess conducted across many different
companies? - Answer - all companies handle differently
- some buy lists, some cold call, some vendor, some broker etc.
How long is UCC good for? - Answer 5 years
,How many owners are required in a LLC? - Answer one (1)
In BK, lease or secured lender more likely to get equipment back? - Answer Lease
Key Elements of Lease Transaction? - Answer - lessee must sign
- lessor must sign
- paid invoice is transfer of ownership
- paid invoice is not transfer of title
Lease Intended As Security - Answer Transaction which is written in the form of a lease,
but the substance is a conditional sale contract or a loan with a security agreement on
the property.
Lessor can only pursue principal with respect to which types of entities? - Answer - sole
proprietor
- general partner
List Accounting Lease Classification - Answer Operating, Capital Loan
List Legal Lease Classification? - Answer Lease, secured financing, unsecured
financing
List Tax Lease Classification? - Answer Tax Lease (True Lease), Non Tax Lease (Non
True Lease) (aka conditional sale)
Name five forms of Vendor Fraud? - Answer - bunk lessee
- bunk equipment
- false sale leaseback
- bunk signature
- side agreements
- inflated prices
- used vs. new
Sales-Type Lease - Answer From the lessor's perspective - a capital lease that gives
rise to manufacturer's or dealer's profit to the lessor
To gain PMSI, how long do you have to file UCC? - Answer 20 days
To test a scenario in which a PMSI or Blanket Lien prevails, what needs to be
analyzed? - Answer - is secured transaction?
- UCC filed in 20 days?
- did lessor pay for majority of equipment?
What are advantages of Brokering? - Answer - requires little/no capital
- easiest
, - no servicing required
What are advantages of Discounting? - Answer - lower COF
- flexibility
- brand identity
- increased revenue
- retains customer
What are advantages of Equity/Debt funding? - Answer - retain long term economic
benefit
- control - underwriting, funding etc
What are advantages of Securitization? - Answer - low cost of funds
- potential off balance sheet (bk remote company)
- access to capital markets
What are characteristics of a strong sale person? - Answer - on time
- organized
- take initiative
- empathetic
- understands sales cycle
- knowledgeable
- works well with others
- team player
What are CLFP's thoughts on spiffs/rebates? - Answer CLFP frowns upon them
What are common reserve targets? - Answer 1.5 - 2 times annual losses
What are disadvantages of brokering? - Answer - limited profit
- lacks control
- loss long term relationship to funding source
What are disadvantages of Discounting? - Answer -significant reps and warranties
- retains some risk (i.e. residual)
- requires working capital
- potentially less upfront profit.
What are disadvantages of Equity/Debt funding? - Answer - risk
- limited capital
- large back-office requirements
What are disadvantages of Securitization? - Answer - requires expertise
- huge cost to conduct
- time consuming
- need uniformity in assets
