Abstract

Equipment leasing continues to be a dynamic industry with many companies preferring to acquire equipment through leasing rather than utilizing bank lines or internal cash. Given the omnipresent fragmentation in the industry, it becomes a huge undertaking for a potential borrower to identify an optimal lender that best suits its business requirements. What makes the task more difficult is the variability of lease pricing structure across competing financial institutions namely interest rates (Fixed/Floating), term, level of security deposit and governing covenants. This paper posits that the Price Umbrella strategy presents a practical solution that can be leveraged to ease this gargantuan task.

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