4. Commercial property
Rolling Stock
Structuring
RVI guarantees the future residual value of machinery and equipment, and is therefore attractive to
banks and leasing companies. Residual Value guarantees are available for a wide range of capital
equipment which has a relatively long life and a healthy resale market.
The benefit of RVI is to reduce the regular payments due under the term of a lease. The value of the
guarantee will relate to the expected market conditions for the sale or re‐use of the equipment at the
end of the agreed lease period.
Leasing is an additional line of credit for businesses; allowing payments to be spread over a fixed term
related to the life of the equipment. Terms are often negotiable and can be tailored to meet the
expected cash flow of the lessee.
Additionally, unlike overdraft facilities, lease facilities are not generally repayable on demand or subject
to annual reviews. You can be sure that as long as payments are made and the terms and conditions of
the contract honoured, the lease facility is secure.
RVI is available to businesses of all sizes who can demonstrate strong market demand for their product
or service, particularly those incorporating the newest and most advanced technology.
Residual Value based insurances are usually structured to cover the difference between the projected
residual value established at lease origination and the actual sales proceeds received at lease maturity.
Benefits and USP's
JLT are the only major Lloyds broker to invest in RVI as a specific product stream, which means that:
We understand the market issues and dynamics
We actively work in and with the markets on a day‐to‐day basis
We are actively creating markets to meet new demands
We are therefore able to match opportunities to the best available markets to obtain optimal
combination of cover, price and security.
Over the period of an RVI security is vitally important, both of your broker and your insurer: we only use
A rated insurer or better, unless agreed with our clients.
Should the worst happen, you would be covered by JLT's E&O policy which, as you would expect, is
significantly better than that of a smaller Lloyds broker.
With the team located in Financial Risks, we are able to draw on the skills and experience of the credit
and political risk professionals in this area. The synergy for our clients of benefiting from this
association with the premier broker in these areas is significant.
6. Case Study: Equipment Leasing
RVI guarantees the future residual value of machinery and equipment, and is therefore attractive to
banks and leasing companies. Residual Value guarantees are available for a wide range of capital
equipment which has a relatively long life and a healthy resale market.
The benefit of RVI is to reduce the regular payments due under the term of a lease. The value of the
guarantee will relate to the expected market conditions for the sale or re‐use of the equipment at the
end of the agreed lease period.
Leasing is an additional line of credit for businesses; allowing payments to be spread over a fixed term
related to the life of the equipment. Terms are often negotiable and can be tailored to meet the
expected cash flow of the lessee.
Additionally, unlike overdraft facilities, lease facilities are not generally repayable on demand or subject
to annual reviews. You can be sure that as long as payments are made and the terms and conditions of
the contract honoured, the lease facility is secure.
RVI is available to businesses of all sizes who can demonstrate strong market demand for their product
or service, particularly those incorporating the newest and most advanced technology.
Once a policy is set up, it may be possible to create a "facility", where further lease deals can be made
using the benefit of RVI without requiring recourse to creating a new policy.