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True Leasing Products

Advantages of leasing are many. For customers who cannot use all the benefits associated with owning equipment, leasing is less expensive than buying. Leasing also allows you to amortize the costs associated with owning equipment over its useful life; thus costs are matched with revenue streams.

Single Investor Tax Lease

Single Investor Tax Lease involves one (1) Investor/Lessor who provides all the funds necessary for the capital investment. Funds are repaid through rents over a period of time depending on the life of the asset. For tax purposes, the Investor/ Lessor is considered to be the beneficial owner and as such receives depreciation and interest deductions in accordance with the length of the transaction, the depreciation system utilized and the assets class life. Typically, leasing arrangements are more expensive with single investor tax leases than with leveraged participants as the investor is employing 100% of the investment in return for 100% of the benefit.

Leveraged Leases

Leveraged Leases have been in existence as a form of corporate financing for over twenty years and are a segmented financing arrangement whereby a portion of the purchase price (up to 80%) is supplied by long term lenders, with the owner (Lessor) of the equipment providing the remaining funds as equity. The debt in a leveraged lease is; non recourse to the owner; secured by an interest in the equipment, a pledge of the lease payments, and an assignment of the rights of the owner under the lease; serviced solely from the lease payments during the life of the lease. A leveraged lease is also tax motivated in that the equity Investor/Lessor (20%) receives tax benefits based on 100% of the equipment cost. These tax benefits consist of tax deferrals created from accelerated depreciation and interest expense (interest expense associated with the non recourse debt).

Foreign Sales Corporations (FSC)

Foreign Sales Corporations are foreign subsidiaries of US corporations that, since 1984, have received favorable tax treatment under the US Internal Revenue Code (Sections 921 through 927). FSCs allow the exclusion of a portion of a lease’s taxable income from US corporate tax. The purpose of this exclusion is to encourage the sale or lease of “Export Property” for “use predominately outside the United States in competition with the export subsidiaries offered by other countries in GATT. FSCs are typically domiciled in foreign jurisdictions that have been certified for FSCs and do not impose a tax on their income (such as the Virgin Islands).

Ship Management Services - Bulk Commercial Services

Bulk Commercial Services is a Bermuda corporation recently established to provide commercial ship management services in the dry bulk trades. The company also provides technical ship management for all dry bulk vessels through its partnership with V-Ships.

Bulk Commercial Services include vessel crewing, maintenance management, procurement, insurance and claims management, cargo operations and financial control and reporting. In addition, Bulk Commercial Services, through its parent Bulk Partners, brings management and commercial expertise to specific segments in the dry bulk industry as well as an ability to employee its capital resources to address specific market opportunities.

If you are shipowner, shipper, or a financial institution or investor with a ship mortgage portfolio, Bulk Commercial Services can assist you in managing you business in these changing times.

This site was last updated 11/07/08