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In This Section:
 Allied Member (2005)
Hotel Association of Canada
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Commercial Leasing Group Inc. is please to provide various forms of financing specifically to the hotel industry throughout Canada and the United States.
Our services include:
FF & E Equipment Financing
Categories included in the FF & E Financing Program
Commercial Leasing Group Inc. can facilitate up to 100% lease financing and offer up to a 66 month term thus helping the hotel owner reach revenue stabilization sooner. Below is an extensive list of the equipment that can be leased/financed under our program:
- All case goods except for the wallpaper and the carpeting
- Televisions
- All telephone systems
- Air-Conditioning Systems
- Door Locks
- Security systems
- Micro Fridges
- Restaurant furniture and equipment
- Gym Equipment
- Pool furniture and equipment
- Complete front office business center equipment and furniture
- Commercial Laundry Machines and Dryers
- Ice Machines
- Various Rental Equipment for resorts; skidoos, marine craft, etc.
Note: If there is item and/or category not listed above, please do not hesitate to call our office.
Sample/Case Study of FF & E Financing
Below is a sample of how the lease cost per room/per month is covered by one day's occupancy rate by a hotel guest:
| Number of Rooms: | | 120 Rooms |
| Case Goods cost per room: | | $6700.00 before applicable taxes |
Total Case Goods value:
(120 X 6700.00) | | $804,000.00 before applicable taxes |
| Lease Term: | | 66 months |
Monthly Payment:
(0.02001 X 804,000) | | $16,088.04 plus applicable taxes |
Cost per room/per month:
(16,088.04 for 120 rooms) | | $134.06 plus applicable taxes |
Cost per day/per room:
(134.06 for 30 days) | | $4.46 plus applicable taxes |
Leasing vs. Loan
Assumption: Assuming FF & E amount required by the hotel is $1,000,000.00
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Leasing Structure
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Purchase Structure
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| YEAR 1 |
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$1,000,000 lease
| Lease term: | 66 months |
| Rate factor: | .02001 |
| Monthly: | $20,010 |
| Total annual payment: | $240,120 |
| Total annual expense for income tax purposes | $240,120 |
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$1,000,000 loan or purchase
| Year 1 | $1,000,000 |
| Less 10% depreciation*: | -$100,000 |
| Undepreciated Capital Cost (UCC): | $900,000 |
*in year of acquisition
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| YEAR 2 |
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| UCC from Year 1: | $900,000 |
| Less 20% depreciation: | -$180,000 |
| UCC: | $720,000 |
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| YEAR 3 |
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| UCC from Year 2: | $720,000 |
| Less 20% depreciation: | -$144,000 |
| UCC: | $576,000 |
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| YEAR 4 |
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| UCC from Year 3: | $576,000 |
| Less 20% depreciation: | -$115,200 |
| UCC: | $460,800 |
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| YEAR 5 |
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| UCC from Year 4: | $460,800 |
| Less 20% depreciation: | -$92,160 |
| UCC: | $368,640 |
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| YEAR 6 |
| Expense: | $120,060
(6 months) |
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| UCC from Year 5: | $368,640 |
| Less 10% depreciation*: | -$36,864 |
| UCC: | $331,776 |
*in year of disposition
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| Total lease expense over a period of 5.5 years: | $1,320,660 |
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| Total depreciation expense over a period of 5.5 years: | $668,224 |
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Conclusion: Leasing will generate an additional $652,436 ($1,320,660 - $668,224.00) in off balance sheet expenses thereby reducing the tax burden and increasing the company's equity on the balance sheet.
Comment from Schwartz Levitsky Feldman LLP Chartered Accountants (Brett Starkman, C.A.): Based on the assumption that the FF&E are Class 8 assets under The Income Tax Act of Canada, the depreciation/CCA (capital cost allowances) as calculated above are correct.
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