Essex Capital arranges debt or equity financing in several market segments, including:
- – Financing of Individual transactions
- – Vendor programs
- – Structured finance
- – Venture Capital leasing
- – Sale and Leaseback
Depending on a variety of factors (time to fund, tax considerations, etc.), Essex arranges funding with banks, finance companies, income funds, hedge funds, private equity, insurance companies and other institutional investors and lenders.
Financing of Individual Transactions
Essex funds leases for its own account, committing its own and investor capital. Essex has over 28 years of structuring experience and extensive relationships with funding sources and originators of transactions.
Essex develops structures either in-house or in conjunction with a client. The structures are designed to accomplish one or more of the following:
• Deferral of gain on disposition on leases
• Acceleration of income
• Revenue-based loan repayment structures
• Deferral of taxes on lease portfolios
• Tax strategies for lessors to defer “soft” income and reduce exposure to the Alternative Minimum Tax
Essex arranges vendor programs for lessors. The individual unit cost might be very small, but the aggregate amount will have the potential to be in the millions. Essex assists the lessor in structuring the program with the vendor, focusing on the tax, accounting and legal issues. Essex also arranges for the funding of the program.
Venture Capital Leasing
Essex Capital Corporation is experienced with the challenges that face a venture capital backed company and has extensive experience in customizing structured lease transactions in this market.
Essex crafts financing packages that allows the lessee and venture capitalist to achieve their corporate goals while positioning Essex in a secured position with a customized structure lease transaction that provides superior returns, while managing credit risks. Venture capitalists regularly fund early stage companies and have a need for venture leasing to finance certain infrastructure and equipment needs, conserving their equity capital for product development, expanding their marketing efforts, or personnel.
Key ingredients in these transactions are shorter duration lease terms and backing venture companies that have made a strong multiple year liquidity commitment to their portfolio company.
As a profit enhancer, Essex will typically receive equity warrants from the lessee in addition to enhanced lease yields which provides superior investor IRR potential.
Sale and Leaseback
Essex has been very active in the area of sale and leaseback financing. Often times, companies acquire equipment by purchasing and then, for a number of reasons, determine that it is better to lease the asset. Essex works with these companies to determine a fair market value and then, purchase and lease the asset back. This structure is beneficial to companies that have recently made acquisitions and they can use the capital raise, as a result of the sale and leaseback, to pay down short-term acquisition debt.