CLI provides 100% of project costs for Non-Profit facilities.
NON-PROFIT FACILITY PROGRAMS
If a Non-Profit entity has a good reason not to obtain tax-exempt financing for a to-be-built Non-Profit facility, CLI can consider providing 100% of the costs for the Non-Profit facility in exchange for a CLI Lease to the Non-Profit, wherein the Non-Profit buys out CLI for $1.00 at the end of the lease term.
FASB's new lease accounting was adopted on 02-25-16, and GASB's new lease accounting was adopted on 06-28-17, wherein Operating Leases over 12 months in duration are now considered a liability and an offsetting Right-of-Use asset on the Non-Profit's Statement of Financial Position. The new lease accounting created an opportunity for Non-Profit entities to dramatically improve their Statement of Operations and Statement of Financial Position by utilizing the CLI Lease, as opposed to a lease without $1.00 buy-out.
CLI Lease payments are similar or typically lower than a lease without $1.00 buy-out, In addition to the Non-Profit's advantage of buying out CLI for $1.00, the CLI Lease significantly improves the Non-Profit's bottom line on its Statement of Operations (annual increase of Net Assets) and its Statement of Financial Position, as opposed to a lease without $1.00 buy-out,
City, County and State Governments ("Government") report leases under GASB, and GASB's Statement 87 on Leases was adopted on 06-28-17, wherein all Government Operating Leases are considered debt liabilities, including those leases with annual appropriations or other early termination rights. CLI's Finance Lease will dramatically improve the Government's Statement of Operations and Statement of Financial Position.
CLI provides 100% of costs for Developer-Operator projects that benefit Non-Profit entities, both in use of the facility and in net income from the project to the Non-Profit. The following are examples of such projects:
Medical Office (for doctors affiliated with Hospital)
Assisted Living Facility
CLI leases the project to an acceptable Non-Profit entity and the Non-Profit subleases to the Developer-Operator of the project. The Non-Profit earns the difference between the Sublease payments and CLI's lease payments. At the end of the CLI lease term, the Non-Profit buys out CLI for $1.00 and continues to sublease the facility to the Developer/Operator under ten 10-year Sublease options, wherein the Sublease payments generally drop by 50-75% and the Non-Profit's net revenues increase. When the Non-Profit entity buys out CLI for $1.00, the Non-Profit's Statement of Financial Position is significantly enhanced as the Non-Profit receives a considerable Asset without liability, generally in the amount of 40-60% of the original costs.
CLI provides funds to the Non-Profit via a sale-leaseback between CLI and the Non-Profit on an existing Non-Profit-owned facility, wherein the Non-Profit buys out CLI for $1.00 at the end of the lease term.
CLI Lease payments are similar or typically lower than a lease without $1.00 buy-out, In addition to the Non-Profit's advantage of buying out CLI for $1.00, the CLI Lease significantly improves the Non-Profit's bottom line on its Statement of Operations and its Statement of Financial Position, as opposed to a lease without $1.00 buy-out.
MINIMUM PURCHASE PRICE:
MAXIMUM PURCHASE PRICE:
$600 million (maximum tranche)
BBB- stable or better rated for universities and healthcare
A- stable or better for Governments (minimum population generally 50,000 for a City, 100,000 for a County)
Credit Lease Investments, LLC
CLI's Senior Partners' office is located in Vernon Hills, Illinois, a northwest suburb of Chicago. CLI's Project Partners are located nationwide.
CLI does not provide tax or accounting advice. Each Lessee and Sublessee should consult its own tax and accounting professionals regarding the CLI Lease.
© Cli (2018)