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TRAC Lease
(Used For Vehicles, Residuals Range From 20%-35%)

The TRAC (Terminal Rental Adjustment Clause) lease is a special type of FMV truck lease specifically for rolling stock and commercial vehicles.

A TRAC lease permits an adjustment in the rental (lease) rate, to be calculated upfront (unlike a traditional FMV lease), based on the amount expected to be realized by the lessor upon sale of the leased vehicle (i.e. through a higher residual), which in turn allows for:

  • TRAC leases can be ideal for small to mid-size distributors, manufacturers & trucking companies with fleets of 5 to 100 trucks, tractors & trailers.

  • The Terminal Rental Adjustment Clause or TRAC Lease allows for a residual to be declared at the lease inception. This unique provision in the tax law provides for the Lessor and Lessee to agree on a residual amount that is disclosed in the documents.

  • This guaranteed residual value allows the Lessor to depreciate the equipment and pass on a lower interest rate and monthly payment cost to the Lessee. The Lessee can then use the TRAC Lease as a tax shelter, to reduce taxable income by using the lease as a 100% tax write-off, operating expense.

  • A TRAC lease provides 100% financing with terms from 24-72 months.

  • OFF Balance Sheet Financing can be structured so the equipment doesn't appear as an asset or a liability on the balance sheet.

    TRAC leases have the following options at the end of the Lease:
    a) Purchase the equipment at the predetermined price
    b) Return the equipment to the Lessor

    • If the equipment is returned, the Lessor (JB2 Funding) will sell the asset in a commercially reasonable manner.

    • If the equipment is sold for more than the amount of the predetermined residual, the margin or excess amount is paid back to the Lessee. If the amount is less than that required, then the Lessee pays the difference to JB2 Funding or the Lessor.
    We advise you to consult with your tax advisor or accountant to decide which option may be best suitable for your company.