While large and small businesses have different financial requirements and objectives, California Bank & Trust’s leasing program[cite::108::cite] offers benefits for both. In addition to improved cash flow and the predictability of long-term fixed-rate and fixed-payment financing, our leasing services allow you to:

• Conserve working capital and corporate liquidity with up to 100% financing
  
• Pinpoint specific projects or profit centers to assign equipment costs
• Take advantage of ownership benefits without major cash outlay, debt burden, or asset management responsibility
• Enhance ROA or ROE ratios by eliminating balance sheet assets and the corresponding debt
• Facilitate piecemeal financing of long-term projects requiring multiple minor equipment acquisitions

Finance Leases

Often classified as a “Capital Lease” for accounting purposes, the finance lease is primarily designed for businesses with a high degree of certainty that they want to own the equipment after the lease term ends. Although a lease document is utilized, with a finance lease the lessee claims ownership of the asset for tax purposes and claims the depreciation and interest expense deductions. A finance lease could be compared to a traditional term loan.

Operating Leases

The United States Financial Accounting Standards Board statement 13 (FASB 13) provides the definitions and criteria for deciding whether a lease agreement is to be considered a purchase/sale agreement (and therefore a capital lease) or a usage agreement (and therefore an operating lease). The distinction between capital and operating leases has important consequences for financial accounting. An operating lease is not included on the balance sheet and the monthly payment is an expense. For a capital lease, the asset is capitalized (similar to a loan) and the asset is depreciated and interest is paid is an expense.

Tax Leases

This type of lease is primarily designed for businesses that want the lowest monthly payment with the greatest flexibility at the end of the lease term. With a True Tax Lease, the lessor retains ownership of the asset for tax purposes and the lessee typically claims all lease payments as an operating expense.

Because CB&T is the tax owner of the equipment, it benefits from depreciation associated with owning the equipment and rewards the lessee with lower monthly payments.

CB&T also offers traditional term loans to finance your equipment acquisition needs.