Terminal Rental Adjustment Clause.
Commercial use greater than 50%.
Little to no money down.
Lower monthly payments.
Walk away and keep the equity.
Terminal Rental Adjustment Clause (TRAC) Lease
For Commercial use greater than 50% of the time.
How it Works
- Lease equipment for set term at fixed monthly payments
- At disposition:
- Purchase equipment (set residual value)
- Continue to lease equipment based on residual amount
- Return equipment
- Gain/loss of equity
Benefits
- Little to no money down
- Monthly payments are fully tax-deductible
- Lower monthly payments
- Sales tax is paid out over the term of the lease
- Retain more cash-on-hand
- Walk away and keep equity
Example
| Unit | 2020 Utility 3000R w/o unit = $54,000 |
| Term | 72 Months |
| Residual | 20% |
| Rate | 6.25% |
| Monthly Payments | $777 |
| Total Interest | $12,766 |
| Total Cost | $66,766 |