Recent Creative Equipment Financing Solutions in Key Economic Growth Industries
With a focus on industries that are fueling U.S economic expansion, 25+ year industry veteran Jules and Associates recently closed a couple of complex transactions to help finance the growth in the food service and communication sectors. Furthermore, Jules has also expanded its headcount in both of its Los Angeles and Orange County locations.
A large second generation, family-owned bakery located in a remote section of the country needed to find a solution to their high transportation costs. They decided to purchase a large distribution center that is located near their large customers’ distribution channels. The goal was to build a large distribution center that would provide additional products to more stores owned by their largest clients. In addition to a real estate loan, they were seeking a lease on the equipment required to run the distribution center. Jules and Associates ended up partnering with the bank that financed the real estate, while also financing the equipment portion of the transaction. Speaking on the transaction, Jules and Associates Senior Vice President Michael Behar noted, “The partner bank appreciated the creativity of the deal in that we were able to only place a lien on the collateral that we financed, and thus did not require any covenants. This allowed the bank to have better control of their loan that they provided to the end customer.”
Another recent transaction for Jules and Associates involved a large service provider to the power and communication industries that was seeking financing on a fleet of trucks. Speaking to some of the complexities of this transaction, Behar continued, “This client typically used TRAC leases in order to finance their fleet given the ability to buy or sell the equipment at the end of the lease. Yet, that of course comes with a shared risk as there are usually expectations relative to the use and remarketing of the equipment. In this case, the customer did not like the cumbersome and restrictive usage guidelines of a TRAC lease along with the costs associated with remarketing their equipment at the end of term.” To solve for this, Jules provided end of term options that offered the customer the ability to either purchase the equipment at a set residual, or have either a reseller or the original vendor buy the equipment directly, all without usage guidelines or costs associated with the remarketing of the units.
These recent transactions underscore the state of the current environment and highlight the need for flexible terms and some freedoms in financing. Behar also noted, “We understand that every company has its own unique equipment financing requirements and we do our best to ensure flexible lease structures that can handle various funding amounts, term lengths, end of term buyouts and billing schedules.”
About Jules and Associates
Founded in 1989, Jules and Associates is one of the nation’s fastest growing, privately-held equipment financing corporations. Since inception, Jules and Associates has originated over $1.5 billion in assets and has established a strong history of working closely with companies of all sizes. Decades of experience allow Jules to service the industries that fuel the country’s economy, including the Medical, Manufacturing, Distribution, Transportation, Construction and Food Service sectors. Jules and Associates’ main focus is to provide each of client with customized finance options that meet their respective, unique needs. Jules’ top-rated customer service and overall formula for success have propelled the firm to be consistently ranked within the top 20 independent leasing companies in the nation. Headquartered in Los Angeles with an additional office in Irvine, Jules and Associates has proudly maintained the same ownership and management for over 25 years.