The Lessee is not pledging its taxing power to repay the lease, what will happen if they fail to appropriate for the annual lease payment in following budget periods?
Non-Appropriation is one of the biggest risks the Lessor (Lender) is taking. You will want to file a UCC-1 to secure your position with the equipment being financed however; failing to appropriate to make scheduled payments will damage the credit worthiness of the Lessee (Borrower). Credit Rating Agencies have taken a strong stance on this issue. Lessees who fail to appropriate for conveniences or obsolescence risk a downgrade on their credit ratings. This could be very costly over the long run. Question: May I assign the lease after funding the lease and closing the transaction? Answer: Most Lease Agreements contain language that allows the Lessor to assign the Lease Agreement. Typically the lease requires the Lessee be notified of an assignment after the assignment has been made so the Lessee will know where to send lease payments. It is clear that the lease is owned by the Lessor similar to bank who owns a portfolio of loans or residential mortgages. This has been an issue of consid
Related Questions
- Since we are not pledging our taxing power to repay the Lessor (Lender), what will happen if we fail to appropriate for the annual lease payments in subsequent budget periods?
- The Lessee is not pledging its taxing power to repay the lease, what will happen if they fail to appropriate for the annual lease payment in following budget periods?
- We are not pledging our taxing power to repay the Lessor (Lender), what will happen if we fail to appropriate for the annual lease payment in following budget periods?
