Company: MGRC
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0000950170-25-023116
Chunk: 8

Company: MCGRATH RENTCORP
Filing Date: 2025-02-19
Form: 10-K
Item: Item 8
Chunk 8
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 economic conditions that may affect a customer’s ability to pay.  The Company recognized credit losses of $1.9 million, $2.6 million and $0.8 million for the twelve months ended December 31, 2024, 2023 and 2022, respectively.  The allowance for credit losses was $2.9 million, $2.8 million and $2.3 million for the years ended December 31, 2024, 2023 and 2022, respectively.The allowance for credit loss activity was as follows: 

          (in thousands)
           
          2024

          2023

          Beginning balance, January 1
           
          $
          2,801

          $
          2,300

          Provision for credit losses

          1,890

          2,633

          Acquired reserve from Vesta Modular (see Note 4)

          —

          250

          Derecognition of reserve from discontinued operations (see Note 5)

          —

          (450
          )

          Write-offs, net of recoveries

          (1,825
          )

          (1,932
          )

          Ending balance, December 31
           
          $
          2,866

          $
          2,801

         Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of trade accounts receivable.  From time to time, the Company maintains cash balances in excess of the Federal Deposit Insurance Corporation limits. Net Investment in Sales-Type LeasesThe Company enters into sales-type leases with certain qualified customers to purchase its rental equipment, primarily at its Mobile Modular and TRS-RenTelco operating segments.  Sales-type leases have terms that generally range from 12 to 36 months and are collateralized by a security interest in the underlying rental asset.  The net investment in sales-type leases was $6.7 million at December 31, 2024 and $3.7 million at December 31, 2023.  The Company’s assessment of current expected losses on these receivables was not material and no credit loss expense was provided as of December 31, 2024.  The Company regularly reviews the allowance by considering factors such as historical payment experience, the age of the lease receivable balances, credit quality and current economic conditions that may affect a customer's ability to pay.  Lease receivables are considered past due 90 days after invoice.  The