ENERGY FINANCE PRODUCTS

We have the capacity to finance a broad range of equipment types while offering competitive pricing and creative structures. Transactions range from $50,000 to in excess of $10 million.

We offer competitive pricing and creative structures for transactions ranging from $100,000 to $100 million. As each transaction is unique, we first seek to determine the particulars of a transaction before offering a financial solution. As such we offer a wide range of financial products and services.

Commercial & Industrial

We offer a full range of finance products for commercial and industrial customers including leases and loans, on and off-balance sheet structures, fixed and variable rates, construction funding, and flexible terms.

• Finance Lease. Also called a capital lease, a finance lease is capitalized on the lessee's books and the cost is depreciated over time. At the of the lease term the lessee purchases the equipment. The standard purchase amount is $1.00, though other options, referred to as PUTs, are available. A PUT (Purchase Upon Termination) is expressed as a % of the cost (10%, 20%) and is an effective way to lower the monthly payment. The Finance Lease can also be structured as an Equipment Loan.

• Operating Lease. Often referred to as an "off balance sheet" lease, the operating lease resembles a rental contract. It takes a little structuring due to accounting rules, but it may help customers use operating funds to purchase capital equipment.

• true lease. While carried on a customer's balance sheet just like a Finance Lease, a True Lease may offer superior tax benefits by allowing the Lessee to accelerate the write-off of their equipment purchase, which can decrease the net cost of purchasing. Lease payments are expensed as they are made.

• Commercial Real Estate Financing. DFC offers real estate and commercial financing in addition to equipment leasing. Customers include hotel chains and franchise companies, developers, management companies and property owners. Eligible projects include renovations, conversions as well as acquisition and development.

• Specialty Products. The energy market has offered a unique opportunity to structure finance products that break the tradition of typical equipment leases and loans. Examples include Demand Side Management, Shared Energy Savings, and Energy Service Agreements. DFC finances projects using these types of products and has developed two new products specifically for opportunities where customers are looking for ways to acquire the use of equipment without using capital dollars.

  The use of an asset is generally more important than the ownership of an asset. That is the underlying premise of the following two specialty finance products. See "Link" to Specialty Finance Products.

Service & Usage Agreement. With the DFC Service & Usage Agreement, the vendor can sell its products and its services using the same contractual agreement. The customer makes a single payment covering both. Because it is a service agreement the customer can use operating dollars rather than capital dollars.

Energy Outsourcing Agreement. Outsourcing non-core support services, such as energy assets, has become extremely popular for many companies today. Services such as cleaning, food services, equipment maintenance, and even data processing are routinely being outsourced, allowing companies to receive these needed services without tying up internal resources or incurring capital obligations. The end result is usually reduced energy costs because the customer is relieved of the burdens associated with owning, operating, and maintaining plant utilities such as steam, chilled water, compressed air systems, and cogeneration.

MUNICIPAL FINANCE PRODUCTS

Section 103 of the Internal Revenue Code allows certain municipal entities to obtain financing at lower interest rates than what is available to commercial and industrial businesses. That is because the interest earned by the Lessor is exempt from federal income taxes. The following entities qualify for tax-exempt financing:

• State and City Governments
• State Universities
• Community Colleges
• Public Authorities
• Public School Districts
• Municipal Hospitals

Some not-for-profit corporations [501 (c)(3)'s] may qualify for tax-exempt financing if a public authority or local government (Sponsor) supports the issuance of the debt. This is sometimes called a conduit. These 501 (c)(3)'s are:

• Hospitals
• Private Schools
• Churches

Public Housing Authorities may also issue tax-exempt debt if they have a sponsor.

Davenport Finance offers Tax-exempt Lease Purchase contracts and Certificates of Participation with terms ranging from three (3) to fifteen (15) years.

FEDERAL GOVERNMENT

DFC offers financing to federal government entities and to vendors who service the federal market:

• Terms customarily from 2 to 10 years with fixed rates; exceptions may be possible

• Transaction size from $100,000 and up

• Monthly, quarterly, semi-annual or annual payment terms

• Structures include Lease to Ownership (LTOP) and Lease with Option (LWOP)

• Rates customarily fixed for 30 days, with 60 and 90 day locks available