Kinetic Leasing

Bank Program

Kinetic Leasing partners with banks to provide their customers with equipment financing options. No cost to banks | Banks earn fee income | Banks can offer additional product to generate assets

The Challenge

The vast majority of small businesses that purchase equipment obtain financing from sources other than banks.

How much loan business is your bank losing to these companies?

Kinetic Leasing’s bank program uses your bank lending personnel as a referral source for equipment financing transactions.

Our program is structured to allow your bank to offer standard, full-service equipment financing products to your clients, without needing the resources to maintain a equipment financing division/subsidiary and without taking on the responsibilities and risks of a lessor.

This model has proven very successful. Kinetic Leasing has financial partnerships with 250+ banks in 175+ cities and 14 states, and our footprint is always expanding.

This is how your partnership with us works. Kinetic Leasing will:

• Train your personnel to recognize equipment financing opportunities, document the finance contracts, and service the contracts throughout the term.
• Provide marketing support, such as direct mail, newspaper, and point-of-purchase marketing materials for you and your bank customers.
• Provide a link to your bank’s internet site for your bank customers to obtain instant quotes and an on-line finance application from Kinetic Leasing’s website.
• Answer any questions you or your bank customers have related to equipment financing.
• Assist you in underwriting (structure, documentation, pricing, etc.) the finance transaction.
• Provide fast turnaround of approval and documentation on each finance transaction.
• Provide timely billing and collection of all finance payments and related sales/property taxes.
• Provide reports on your equipment finance portfolio, including balances, average rates, aging of rents, etc.
• At end of contract, re-market the financed equipment through guaranties from the vendor/manufacturer and remarketing agreements, to eliminate and/or reduce residual risk exposure.

A typical transaction with Kinetic Leasing goes as follows:

1. The bank or its customer contacts Kinetic Leasing for an equipment finance proposal. This can be accomplished via a formal finance application from Kinetic Leasing’s website or a simple telephone call. The bank gathers the following information:
   • General description of equipment
   • Equipment cost
   • Term of contract (may be multiple scenarios)
   • Bank’s buy rate
2. Kinetic Leasing works with the bank to complete the finance proposal(s). Revisions to the initial finance proposal(s) may be warranted, pending completion of the credit underwriting process or revised finance terms requested by lessee.
3. The bank completes its credit underwriting/approval process, per established process.
4. The bank forwards the following information to Kinetic Leasing:
   • Signed lease application
   • List of equipment to be financed (copies of invoices and/or purchase orders)
   • Letter indicating bank’s credit approval of the finance transaction.
5. Kinetic Leasing completes contract documents and forwards to the bank or to the customer for execution (per banker’s instructions).
6. The bank has contract documents signed and sends back to Kinetic Leasing.
7. Kinetic Leasing remits equipment purchase amount to vendor(s).
8. Kinetic Leasing funds/discounts the finance transaction with the bank.
9. Kinetic Leasing invoices finance payments and applicable sales tax.
10. Collections of past due finance payments are administered jointly by the bank and Kinetic Leasing.
11. End-of-contract terms, including payoffs, are handled by Kinetic Leasing.

The benefits to you of using Kinetic Leasing’s Bank Program include:

• Providing your bank customers with equipment financing options without the expense of additional staff and dedicated office space.
• Having (as the bank through which the contract was sourced) the first right of refusal to fund the contract.
• Earning fee income at the beginning of the contract.
• Adding to the diversification and growth of the bank’s assets.

Partner with the equipment financing experts at Kinetic Leasing today. We will provide your bank with the expertise and infrastructure you need to offer equipment financing to your bank customers, with almost no investment on your part.

Q: How do I know if my customers are leasing equipment?

A: There are several ways to do this:

• You may simply perform a UCC-1 lien search to identify any equipment lease financing done by your customer.
• You can also identify equipment leasing on tax returns:
  • For commercial customers who provide a Schedule C with their tax return, look for amount(s) under line 20, which lists rent or lease expense for the year.
  • Similarly for your ag customers, refer to Schedule F, line 24. If any amount(s) are listed, then they, too, are leasing items.
• For your business/commercial customers that provide you with “reviewed” or “audited” quality financial statements, there are a couple of ways to determine if they have equipment leases in place:
  • For a Capital Lease, you will see a line item under the customer’s liability section(s), similar to that of a traditional commercial loan.
  • For an Operating Lease, you will find a footnote in the financial statements. It will state the amount of operating lease expense the company incurred in the past year, followed by a schedule of lease payments to be made in the subsequent 5 years.