USA Truck leasing between inter- companies

[celebenil2024]

Company A own 10 trucks and they are the collateral for a bank's loan. The trucks are used by company B. Can company A lease the trucks to company B.

I will appreciate your response.

Thanks/

 

[DrStrangeLove]

You'd have to check the loan covenants to be sure. The covenants might forbid a finance lease, since the trucks are already pledged as collateral. If the finance lease outlasts the loan, there might be some question about whether Company A can transfer title of the trucks under, for example, a purchase option at the end of the finance lease. But an operating lease may be OK. It really depends on the loan covenants.