GE Commercial Finance - Transportation offers a wide array of financial solutions designed to meet specific customer needs. Our products range from senior debt to leases to highly structured financial solutions. Please let us know how we can help you. Click here to contact GE Tranportation Finance.

Senior Debt
A senior loan (debt) is not subordinated to any other of a customer's liabilities, but may be on par with other loans. It is first in priority of payment from the general revenue of the borrower in the event the borrow ends up in financial difficulty. Senior debt can be either secured or unsecured and can be based on a floating or fixed interest rate. Senior secured loans are backed by the general credit of the borrower as well as a perfected security interest (or lien) in the borrower's assets. A senior unsecured loan is backed by the general credit of the borrower without a preferred security interest in an asset.

Single Investor Lease (SIL)
A single investor lease (SIL) is a tax-advantaged asset-based financing which typically qualifies as an operating lease for accounting purposes and a "true lease" for tax purposes. Depending on the customer's position, the SIL can provide seven to 25 years of off-balance-sheet financing priced below the client's alternative borrowing rate. The transaction is structured so the lessee is not considered the "owner" for either accounting or tax purposes. From the lessee's perspective, the lease is off-balance sheet financing with a footnote disclosure. This product is applicable for new and used equipment, project financings and some forms of real estate. Benefits to customers can include: improved earnings through lower rental payments, hedging against equipment obsolescence, attractive after-tax financing rates, and diversification of funding sources. We typically consider leasing arrangements for big-ticket items of at least $20 million.

Leveraged Lease
A leveraged lease is a tax-advantaged, asset-based financing that typically qualifies as an "operating lease" for accounting purposes and a "true lease" for tax purposes. It can provide seven to 30 years of off-balance sheet financing priced below the lessee's alternative borrowing rate. In a leveraged lease, a trust is established with equity and non-recourse debt components. The transaction is structured such that the equity investor is considered the "owner" of the equipment for both accounting and tax purposes. From the lessee's perspective, the lease is an off-balance sheet financing with footnote disclosures. GE Commercial Finance - Transportation typically considers leveraged lease transactions of greater than $50 million.

Preferred Equity
Preferred stock is a quasi-equity financing that is senior to common equity but junior to all lenders and trade creditors. It is "debt-like" in terms of providing a fixed rate of return, although some versions include an equity kicker. Although there are many types of preferred stock, GE Commercial Finance typically invests in the following:
a)    Fixed-rate adjustable preferred stock, which has a fixed dividend rate and then converts to an adjustable rate
b)    Convertible preferred stock that is convertible to common stock at some point in the future
c)    Cumulative mandatory redeemable preferred stock that has a fixed dividend rate with a stated mandatory redemption that may occur on a sinking fund basis or bullet maturity.

GE commercial Finance - Transportation will consider preferred stock transactions of at least $5 million.

Common Equity
A common equity stockholder has an ownership interest in a business venture and is junior to all lenders, preferred stockholders and trade and unsecured creditors. Common equity is generally perpetual, but there may exist forced sale provisions for certain circumstances. New shares of common equity can be acquired/sold through initial or secondary offerings, or existing shares can be acquired/sold. Common equity typically includes:
a)    dividends declared by the board of directors;
b)    no fixed coupon or return; and
c)    no fixed repayment or maturity date

Preferred Limited Partnership
A preferred limited partnership (PLP) is a tax-advantaged, asset-based financing that is typically off-balance sheet for the customer. It has some of the same tax attributes as a single investor lease or leveraged lease, but has more residual flexibility. The financing structure is used frequently in project financing but can be applicable to other income- generating assets as well. Parties to the transaction typically include a general partner (usually the customer), a preferred limited partner (GE Commercial Finance) and a lender (GE or another third party). Debt service and preferred equity distributions can be structured with flexibility. GE Commercial Finance has structured more than $750 million of PLPs for customers and typically considers transactions of at least $10 million.

TRAC Lease
A TRAC (Terminal Rental Adjustment Clause) lease allows a lessee to guarantee a portion of the residual value for vehicle leases (trailers, chassis or trucks), the inclusion of which will not, in and of itself, disqualify the tax lease status of a tax-oriented vehicle lease.