Your accounting firm does. So do the financial officers of your company. In fact, they probably specified that all new leases must qualify as "operating leases".

A lease can be treated as an operating lease and the entire rent deducted as an expense only if all four of the following FASB 13 (1) tests are satisfied:

1) The minimum lease term is less than 75% of the estimated economic life of the equipment.

2) There is no transfer of ownership.

3) Any purchase option is at "fair market value".

4) The present value of the minimum lease payments is less than 90% of the equipment cost.


A capital lease and an operating lease affect company financial statements in significantly different ways. FASB 13 stipulates that "A capital lease shall be recorded as an asset and an obligation on the lessee's financial statements..." but an operating lease is kept off the balance sheet and not listed as an asset or a liability to the company, "..the rental on an operating lease shall be charged to expense over the lease term as it becomes payable.."

The ELEX operating lease has been designed to help solve this problem and provide you with:

* A True Lease

* Low Long Term Rates

* Upgrade Provisions

* Renewal/Purchase Option

* Short 36 Month Commitment

The ELEX operating lease is a unique lease financing program structured to qualify for treatment as an operating lease. The rental payments are fully deductible and the transaction will not affect your debt ratios or reduce your borrowing ability.

Additionally, as an off balance sheet transaction, the ELEX operating lease helps you avoid the 20% Alternative Minimum Tax (2).

Simply stated, with the ELEX operating lease, you will enjoy the widest flexibility and greatest savings over the useful life of the equipment.