Kevin Trabaris: Equipment Leasing & Vendor Contracting

EM³ Partner Kevin Trabaris shares key insights on equipment leasing vs. vendor contracting in Monitor Daily, highlighting risks lenders should not overlook. "There is no concept of mutuality in equipment lease agreements," Trabaris explains.

Kevin Trabaris, who recently joined Maxson Mago & Macaulay, LLP as a Partner, discusses the disparities between equipment leasing and vendor contracting in a thought-provoking piece featured in Monitor Daily. Despite their apparent dissimilarities, Trabaris provides essential insights into lease-related matters that he believes should be on the radar of every lender.

Here are a few excerpts from the article:

…there is no concept of mutuality in equipment lease agreements.

The lessor has not stepped into the shoes of the supplier, it has merely paid it. There is no reason to expect a lessor to provide warranties on the equipment.

When a lender makes a loan, the lender must know for certain that the borrower is fully obligated under the loan after the signing of the loan documents. For leasing, this is less certain.

The more risk the lessor suffers, in any form, including from contractual changes to its standard lease agreement, the more the lessor’s original credit analysis (and pricing) may suffer.

Kevin Trabaris is a corporate and commercial finance transactional attorney with experience representing banks, financial companies, equipment lessors, insurance companies and other funding entities in connection with commercial and corporate loans, equipment leases, bank loans, bonds and many other types of financing. He has handled everything from small ticket transactions to billion dollar syndicated loans, asset-based loans, real estate, working capital and more.