Since 1997, CIT Colombia has registered new operations for about $150 million and manages a portfolio of almost $25 million. We have more than 300 customers and more than 1,000 active operations. In addition, we have extensive experience in building highly successful vendor programs in software, technology and equipment financing. Benefits to working with CIT Latin America, Colombia on your vendor financing needs include:

• Solid track record, proven execution with demanding vendors
• “Commonality of Interests” – flexible structuring and sharing incremental sales opportunities through market share expansion
• Geographic coverage and knowledge of the local markets
• Ability to quickly react, adjust and scale to meet vendor needs

Products and Services

Operating Lease

The operating lease allows the customer the “USE” of the equipment during a determined period, without having the obligation to purchase it and making easier the process of technological refreshment. Under this figure, the customer transfers 100% of the risk of technological obsolescence to CIT and all the costs of this process. At the end of lease, the customer has three different alternatives:

• Return the equipment and make a technological refresh.
• Renew the contract with the same equipment for the term of their convenience. Payments in most cases reduce depending on the term of the renewal.
• Buy the equipment for the Fair market value

Cross Border Lease

This type of lease is a contract in U.S. dollars with the main characteristic being that the customer and the leasing company are in different countries with different legal systems.

In this type a purchase option is managed and usually is of 1 percent, and once cancelled, allows the customer to have the property of the equipment.

Other characteristic to gain all tax benefits is to make the operation over equipment that is considered as a capital good in which the government allows to make a temporary importation and lets the customer pay the tax and duties charges during the term of the contract with no interest charge. Terms are from three to five years.

Finance Lease

A Finance Lease is a contract in which a financial company gives the customer the right to use equipment with the payment of rent with the term and conditions defined for both parts. The customer could buy the equipment using a purchase option defined in the contract.

The main and most important difference between a Finance Lease and Operating Lease is that the Finance Lease has a defined purchase option in the contract that usually is 1 percent. The Operating Lease allows the customer to buy the equipment, but the purchase option will be defined for the Fair Market Value at the end of lease. The laws do not allow in an Operating Lease to determine the purchase option at the beginning of the lease.

There are also some tax differences between Operating and Finance Leases. In general terms, in Operating Leases, the full amount of rentals are tax deductible. In Finance Leases, this is not always the case. If you need further information about the tax treatment, please contact us.