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Frequently Asked Questions

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FAQ on Leasing and Equipment Finance Agreement

Find comprehensive information on the various financial agreements we offer, Lease and EFA (Equipment Financing Agreement). Each type of agreement possesses distinct characteristics and benefits, designed to assist you in making an informed decision. Whether your inquiries pertain to payment terms, ownership, property tax responsibilities, or early payoff options, this section provides the answers you need. Click here for Financial Pacific's fee schedule.
Payment Terms
LEASE A lease contract is essentially a rental agreement. The lessee agrees to make a stream of payments for the term of the lease.
EFA Contract combines equipment cost, taxes, expenses, and finance charges then divides over the term of the agreement to create a payment stream.
Standard P&I Loan Borrower obtains purchase funds in advance (principal) and repays over time with calculable interest.
Terms of Ownership
LEASE The lessor holds legal title to the equipment. There’s usually a buy‐out option at the end of the lease term based on the residual value of the equipment at that time.
EFA The customer maintains ownership of the equipment throughout the term of the contract while the equipment itself provides collateral for the contract.
Standard P&I Loan The borrower maintains ownership of the equipment throughout the term of the loan while the equipment itself provides collateral for the loan.
Property Tax
LEASE The lessor is considered the owner of the equipment in a lease agreement. We report the equipment to your local jurisdiction, are billed the tax amount, and as part of your lease agreement you reimburse us.
EFA The customer is responsible for remitting any personal property tax directly their local jurisdiction as applicable.
Standard P&I Loan The customer is responsible for remitting any personal property tax directly their local jurisdiction as applicable.
Pre-payment and Early Payoff
LEASE Pre‐payment of the lease contract does not reduce the costs calculated into your payment stream.
EFA Pre‐payment of the contract does not reduce the financing costs calculated into your payment stream.
Standard P&I Loan Pre‐payment reduces the interest charged based on principal and length of loan. Therefore, the payoff amount may be less when paid off early.
Note: Both a lease and an EFA are structured to be non‐cancelable for the term indicated. As such, there may not be a pre‐payment penalty, however, there isn’t the same discount for paying off early as with a regular principal and interest loan as you will still be responsible for the sum of the remaining payments of the contract. Most contracts exercising an early payoff prior to the last six months of the contract will be calculated at the present value of the remaining payments at a discount rate of 4%, plus any applicable taxes, unpaid late charges, collection fees, or any other sums due under the agreement. Refer to your contract for specific information regarding payoff discounts.
Pre-payment Penalty
We work with many third‐party originating companies. Please review your contract agreement to determine if there is a pre payment fee charged by the originator. You may also contact the third‐party company you originated your contract with for more details.
Pro-rata
We provide a monthly cycle of due dates. When starting your contract, it’s unlikely that it would start on a scheduled due date. Therefore, there is a prorated amount that appears on your invoice much like with a utility company. Pro‐rata is calculated by taking your monthly payment amount, divided by 30 days, multiplied by the number of days between when funds were released to your vendor and the commencement date of your contract.
Insurance
Our contracts require that insurance is in place to cover the equipment in the event of a loss. If you have an invoice showing insurance charges, we have not received proof of sufficient outside insurance coverage and have therefore placed our own coverage, per the terms of the contract. If you have questions, you may contact our insurance tracking company at finpacins@assurant.com or 888‐423‐6722.
Credit Reporting Agencies
We report your payment history only to the business credit reporting side of Equifax, which is a business lending consortium known as the Small Business Financial Exchange or SBFE, and to PayNet. Your contract for repayment gives us authorization to obtain updates to your business and personal credit reports, as necessary, through the life of the contract.

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Financial Pacific offers you the advantage of providing financing to customers who traditionally have a difficult time finding financing including start-up businesses and companies with limited operating or business credit history.
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Financial Pacific Leasing, Inc., including its divisions, is a subsidiary of Columbia Bank. Products offered by Financial Pacific Leasing, Inc. are not FDIC insured.
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