DISCOUNT FUNDING OF LEASES

K2 Capital Group funds its leases with a wide variety of financing sources including partnerships with commercial banks. K2 Capital retains the servicing rights and ownership of the residuals. It secures permanent financing by assigning the stream of payments and a first-security interest in the equipment to a bank lender. Banks provide funding to K2 Capital based on the present value of the lease payments at a discount rate, which is determined by the lender based on the credit quality of the lessee. The individual lease streams are discounted with the banks on a non-recourse basis.

K2 Capital has developed a large, national network of lending partners with which it discounts leases. We work with many community, regional and money-center institutions that use our partnership to:

• Diversify portfolio allocation and risk.
• Book stable, earning assets at no cost to the bank.
• Earn higher returns than on other assets of similar credit quality.
• Access quality credits in the healthcare and medical industries.