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www.marinelink.com MN25The present value of minimumCharter rental payments is equal to 90% or more of the fair market value of the vessel. The decision to enter into asale/leaseback agreement should be discussed with your CPA as there are tax implications to each type of lease.For example, you have, more than likely, mostly depreciated the vessel by this time, especially given the mul- tiple accelerated depreciation schemes provided under various job creation acts and at least two presidents over the last decade. If you no longer can or need the vessel depreciation, an Operating Lease may be for you. The shipowner claims depreciation (and if appropriate, interest payments) on his taxes and you claim the monthly rent, operating expense and insurance forthe vessel on yours. You get fair mar- ket value for your vessel and keep the difference between what you owe and what you get. And that goes straight to your bottom line, too. Because an Operating Lease depends greatly on value, age and type of vessel, it is difficult to offer a comparison between refinance and sale/leaseback options. A good rule of thumb is that a lease payment shouldbe about 10 ? 15% less than anequivalent loan payment. In these days of underutilization and sub-par day rates, restructuring your debt and having cash flow directly to your bot- tom line can improve your ability to survive and possibly prosper. Refinancing or a sale/leaseback might just do the trick.In either case, your boat may look like it?s made of steel or aluminum, but in actuality, it?s really made of gold. That said and prior to taking any actions with respect to your busi- ness or its assets, you should consult with your financial and/or legal advi- sor. Richard J. Paine, Sr. (Email: [email protected]) is the National Finance Manager ? Commercial Marine for TCF Equipment Finance, an affiliate of TCF Financial Corporation (NYSE: TCB). The views and opinions in this article are those of the author. Nothing contained in this article is intended to, nor should be it be considered to be financial, legal, or tax advice on the part of TCF National Bank, its parent or any its subsidiaries. MN#11 (18-31):MN 2011 Layouts 10/27/2011 9:22 AM Page 25