All financing contracts are considered security agreements under the U.C.C. Finance Lease See Capital Lease. An option to purchase at a predetermined fixed price as shown in the contract. For instance, Prime plus 2 would indicate a rate of interest two percentage points above the prime rate. The date the lease commitment or lease agreement is signed. Installment Sale Sale of equipment with purchase price payable in installments.
Title passes at the inception of the contract.
The charge for the use of money. Two primary methods of calculating interest exist. Cat Financial, calculates interest using the simple interest method. A charge for the use of money based upon the actual amount of money and payable periodically during the term of the loan. The simple interest rate is applied periodically to the unpaid loan balance.