CLFP EXAM - EQUIPMENT LEASE AND
FINANCING DOCUMENTATION
QUESTIONS WITH CORRECT ANSWERS
{GRADED A+}
What is a Lease a document? - ✔✔A lease is a basic document by
which a lessor agrees to provide equipment or other personal property or
rights to a lessees in return for rental payments.
What are Lease Exhibits document? - ✔✔Also referred to a "schedules"
are used if the description of lease property is too lengthy to fit into the
space allotted on the lease. Often wise to have lessee initial all exhibits.
What is a Delivery & Acceptance (D&A) document? - ✔✔Document
signed by lessee indicating the lessee has unconditionally accepted the
,equipment. Ideally the date of this document should be subsequent to the
date of the lease. Also good practice to confirm via confirmation call
What are Guaranties? - ✔✔Document containing all credit support
provided by third parties that are not the primary lessees.
What are Corporate Resolutions? - ✔✔Document certifying by the
corporate secretary or other officer that the person signing is so
authorized. Often easier that reviewing articles of incorporation and
bylaws. Documents in which an officer is authorizing themselves, notary
is recommended.
What are Real Estate Waivers documents? - ✔✔Document
acknowledges an owner or mortgagee or real property that the leased
equipment belongs to the Lessor and can be removed.
What are Fixture Filings documents? - ✔✔Similar to UCC filings,
documents filed in real property records to provide notice to third parties
of the lessor's ownership interest in the equipment.
, What are UCC filings? - ✔✔Papers filed in teh office of SOS whereas
the lessee is incorporated preserving priority lien rights of the creditor
and notice to inquiring parties.
What are Cross Default Agreements documents? - ✔✔Provides that
creditor/lessor have multiple agreements with debtor/lessor. If one
defaults, they all default
What is Purchase Order documents? - ✔✔Issued by lessor indicating
lessor intends to purchase the Equipment from the vendor upon
fulfillment of certain conditions by vendor and lessee
What is an Invoice Document? - ✔✔A document issued by a vendor to
the lessor seeking payment for equipment. Represents passage of title
from vendor to lessor.
What is an Advance/Prefund Document? - ✔✔Also referred to as a
"pre-delivery hell or high-water agreement", describes terms and
conditions under which the lessor may advance part of ll of the
Equipment cost to a vendor prior to full D&A of the equipment.
FINANCING DOCUMENTATION
QUESTIONS WITH CORRECT ANSWERS
{GRADED A+}
What is a Lease a document? - ✔✔A lease is a basic document by
which a lessor agrees to provide equipment or other personal property or
rights to a lessees in return for rental payments.
What are Lease Exhibits document? - ✔✔Also referred to a "schedules"
are used if the description of lease property is too lengthy to fit into the
space allotted on the lease. Often wise to have lessee initial all exhibits.
What is a Delivery & Acceptance (D&A) document? - ✔✔Document
signed by lessee indicating the lessee has unconditionally accepted the
,equipment. Ideally the date of this document should be subsequent to the
date of the lease. Also good practice to confirm via confirmation call
What are Guaranties? - ✔✔Document containing all credit support
provided by third parties that are not the primary lessees.
What are Corporate Resolutions? - ✔✔Document certifying by the
corporate secretary or other officer that the person signing is so
authorized. Often easier that reviewing articles of incorporation and
bylaws. Documents in which an officer is authorizing themselves, notary
is recommended.
What are Real Estate Waivers documents? - ✔✔Document
acknowledges an owner or mortgagee or real property that the leased
equipment belongs to the Lessor and can be removed.
What are Fixture Filings documents? - ✔✔Similar to UCC filings,
documents filed in real property records to provide notice to third parties
of the lessor's ownership interest in the equipment.
, What are UCC filings? - ✔✔Papers filed in teh office of SOS whereas
the lessee is incorporated preserving priority lien rights of the creditor
and notice to inquiring parties.
What are Cross Default Agreements documents? - ✔✔Provides that
creditor/lessor have multiple agreements with debtor/lessor. If one
defaults, they all default
What is Purchase Order documents? - ✔✔Issued by lessor indicating
lessor intends to purchase the Equipment from the vendor upon
fulfillment of certain conditions by vendor and lessee
What is an Invoice Document? - ✔✔A document issued by a vendor to
the lessor seeking payment for equipment. Represents passage of title
from vendor to lessor.
What is an Advance/Prefund Document? - ✔✔Also referred to as a
"pre-delivery hell or high-water agreement", describes terms and
conditions under which the lessor may advance part of ll of the
Equipment cost to a vendor prior to full D&A of the equipment.
