U.S. manufacturers now have a new financing option for their Mexico-based equipment through KMEX Leasing. Traditionally, this collateral could not be easily financed since U.S. institutions have little experience recovering equipment in Mexico. Additionally, Mexican withholding taxes on cross-border operating leases can make these transactions prohibitively expensive.
From the perspective of Mexican financial institutions the Mexican operations generally do not have a credit profile that will support the financing, nor do they generally have the ability to fund in U.S. dollars.
KMEX Leasing has financing vehicle to address these issues. It can finance new equipment purchases and sale-leasebacks, in U.S. dollars, via finance or true operating leases. The program is focused on leasing manufacturing, material handling and packaging equipment in transactions of up to $10 million, though larger transactions can be financed. Terms of up to seven years will be available, depending on the equipment type.
“We have put together a team that understands equipment financing on both sides of the border,” said Kevin O’Gara, CEO of KMEX Leasing. “Our approach coordinates the financing goals of the US parent and Mexican subsidiary from cash flow, accounting and tax perspectives.”
O’Gara, who founded KMEX Leasing, has over 25 years of cross-border financing experience. KMEX Leasing is based in Atlanta and has an office in Mexico City.
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