CIT equipment leasing finances high-value business assets through operating leases, finance leases, TRAC leases for commercial vehicles, and sale-leaseback transactions, with capital equipment deals running from $3 million to over $100 million on terms of up to 10 years at fixed or floating rates.1CIT. Capital Equipment Financing CIT Group merged into First Citizens BancShares in January 2022, and the equipment finance operations now sit under First Citizens while keeping the CIT brand for capital equipment transactions.2PR Newswire. First Citizens Bank Introduces New Name for Equipment Finance Business
What CIT Will Finance
CIT Capital Equipment Finance covers more than twenty sectors, including aerospace and defense, automotive, construction, healthcare and medical, trucking and logistics, mining, general manufacturing, and utilities.1CIT. Capital Equipment Financing The broader First Citizens equipment finance division adds ground transportation fleets, brown water marine vessels, warehouse automation, renewable energy infrastructure, and technology and telecommunications systems.3First Citizens Bank. Commercial Equipment Leasing and Financing
The common thread is capital intensity. A single MRI scanner, a fleet of over-the-road tractors, or a set of Jones Act tug and barge vessels can represent millions in upfront cost, and a lease spreads that cost across the useful life of the equipment rather than tying up cash or credit lines in a lump-sum purchase.
Lease Structures and How Each Is Taxed
The structure you pick decides how the equipment shows up on your financial statements, who claims depreciation, and what happens when the lease ends. Match the structure to the outcome you want: eventual ownership, minimal balance sheet impact, or cash out of an asset you already own.
Operating Leases
An operating lease gives you the use of the equipment for a defined period without transferring ownership risks. Under ASC 842, you record a right-of-use asset and a matching lease liability on the balance sheet, but the expense hits your income statement as a single, straight-line cost over the lease term. That even treatment makes budgeting simpler than a finance lease, where interest expense is front-loaded.
For tax purposes, if the agreement qualifies as a genuine lease, you deduct the entire periodic payment as a rental expense. You do not claim depreciation because you are not treated as the owner.4Internal Revenue Service. Income and Expenses 7 The IRS will reclassify a lease as a conditional sale if payments go toward a purchase price or you have the right to acquire the equipment on favorable terms.5Internal Revenue Service. Deducting Rent and Lease Expenses
Finance Leases
A finance lease (previously called a capital lease) works more like a purchase agreement wrapped in a lease structure. It usually includes a bargain purchase option, often as low as $1, that virtually guarantees ownership at the end. You record both the asset and a corresponding liability on your balance sheet and treat the transaction like debt financing.
Because you are treated as the economic owner, you claim depreciation over the asset’s tax life rather than deducting rent. The interest portion of each payment is expensed separately, and the principal portion reduces the liability. A lease is classified as a finance lease when it meets any one of these conditions: it transfers ownership by the end of the term, it includes a purchase option the lessee is reasonably certain to exercise, the lease term covers the major part of the asset’s remaining economic life, the present value of lease payments equals or exceeds substantially all of the asset’s fair value, or the asset is so specialized it has no alternative use to the lessor afterward.4Internal Revenue Service. Income and Expenses 7
TRAC Leases for Commercial Vehicles
If the equipment is a truck fleet, trailer, or other motor vehicle used primarily for business, CIT may offer a Terminal Rental Adjustment Clause (TRAC) lease. A TRAC lease includes a clause that adjusts the final rental payment up or down based on what the vehicle actually sells for at the end of the term. That kind of residual-value sharing would normally cause the IRS to treat the arrangement as a purchase, but federal tax law carves out a specific exception for qualifying motor vehicle agreements.
To qualify, the lessee must certify under penalty of perjury that more than half of the vehicle’s use will be in a trade or business. The agreement must also include a written statement informing the lessee that it will not be treated as the vehicle’s owner for federal income tax purposes. When those requirements are met, the arrangement is treated as a lease for tax purposes even though it contains the rental adjustment clause, and the lessee deducts the payments as rent rather than claiming depreciation.6Office of the Law Revision Counsel. 26 U.S. Code 7701 – Definitions
Sale-Leaseback Transactions
A sale-leaseback converts equipment you already own into immediate cash. You sell the asset to CIT at fair market value and lease it back, continuing to use it while making periodic rent payments. CIT lists sale-leaseback transactions as a core offering alongside traditional loans and leases.1CIT. Capital Equipment Financing The cash can be used for working capital, debt reduction, or a new project. The trade-off is that you no longer own the asset and must negotiate end-of-term options to keep using it. For accounting purposes, the transaction is recognized at the sale price when it occurs at market value, and the leaseback is classified and measured like any other new lease under ASC 842.
Section 179 and Bonus Depreciation for 2026
Two provisions matter most for equipment placed in service during 2026, and both apply only when you are treated as the owner for tax purposes. That means they benefit lessees under finance leases (or outright purchases) but not lessees under operating leases who deduct rent instead.
Section 179 Expensing
Section 179 lets you deduct the full cost of qualifying equipment in the year you place it in service, rather than spreading the deduction over multiple years. The base statutory limits are $2,500,000 in total expensing with a phase-out starting at $4,000,000 in total equipment purchases.7Office of the Law Revision Counsel. 26 USC 179 – Election to Expense Certain Depreciable Business Assets After inflation adjustments for 2026, the maximum deduction rises to $2,560,000, and the phase-out begins at $4,090,000 in total purchases. The per-vehicle cap for sport utility vehicles is $32,000.8Internal Revenue Service. Rev. Proc. 2025-32 The deduction cannot exceed your business’s net taxable income for the year, equipment must be placed in service during the 2026 tax year, and you must use it more than half the time for business purposes.
Bonus Depreciation
The One Big Beautiful Bill Act permanently restored the 100 percent first-year bonus depreciation deduction for qualifying property acquired after January 19, 2025. There is no phase-down; the full 100 percent applies indefinitely to eligible equipment.9Internal Revenue Service. Treasury, IRS Issue Guidance on the Additional First Year Depreciation Deduction Amended as Part of the One Big Beautiful Bill The IRS confirmed in Notice 2026-11 that the previous requirement to place property in service before January 1, 2027, no longer applies.10Internal Revenue Service. Interim Guidance on Additional First Year Depreciation
The two provisions work differently. Section 179 is an election with an income limitation; bonus depreciation is automatic for qualifying property and has no income cap. Many businesses use Section 179 first and then apply bonus depreciation to any remaining cost that exceeds the Section 179 limit or to assets that qualify for bonus depreciation but not Section 179.
Qualifying and Preparing Your Package
CIT’s published underwriting factors include monthly budget, business needs, and time in business.11CIT. Heavy Equipment Financing and Leasing For the capital equipment division handling transactions of $3 million and above, the bar is higher. Expect the underwriting team to focus on your company’s revenue trajectory, profitability, existing debt load, and the specific asset’s expected contribution to cash flow.
Business owners with equity stakes above 20 percent should anticipate a request for a personal guarantee, which is standard across the equipment finance industry for most small and mid-size companies. Public companies, employee-owned businesses, and large corporations with strong balance sheets are more likely to secure financing on the strength of the business entity alone.
A large-ticket documentation package typically includes:
- Recent balance sheets, income statements, and cash flow statements, usually covering the last two to three fiscal years.
- Corporate tax returns for the prior two to three years, depending on entity structure.
- A short business summary explaining why you need the equipment and how it supports revenue.
- A specific vendor quote or invoice identifying make, model, and total cost of the asset.
Assembling this before you engage a relationship manager saves weeks. Incomplete documentation is the most common reason credit decisions stall.
From Application to Funding
A dedicated CIT relationship manager serves as your primary contact and guides the package through internal credit review. The underwriting team performs due diligence on your financials, credit history, and the specific asset. Straightforward deals with clean financials move relatively quickly. Complex transactions involving multiple assets, unusual equipment, or layered corporate structures take longer.
After credit approval, CIT issues a commitment letter specifying the term, rate, structure, and any conditions. Accepting the commitment triggers preparation of the final legal documentation. The core documents are a Master Lease Agreement (MLA), which governs the overall relationship, and one or more equipment schedules that describe the specific assets, payment amounts, and term for each piece of equipment.12U.S. Securities and Exchange Commission. Form of Master Lease Agreement
Funding does not happen until three things occur: the final documents are signed, the equipment is delivered, and you sign an acceptance certificate confirming receipt and condition. CIT then pays the vendor directly. You never handle the equipment purchase funds. This protects CIT’s ownership or lien position on the asset and gives you a clean starting point for the lease term.
Ongoing Obligations After You Sign
Signing the MLA triggers duties that are buried in the contract rather than highlighted during sales conversations.
Insurance
Your lease will require you to maintain insurance on the equipment at your own expense. Expect property damage coverage and commercial general liability in amounts the lessor specifies. The policy must typically name CIT (or First Citizens) as an additional insured and loss payee, meaning insurance proceeds for a damaged or destroyed asset go to the lessor first. You’ll need to provide proof of coverage before funding and maintain it throughout the term. Letting coverage lapse is a default trigger in virtually every equipment lease.
Maintenance
Under most CIT lease structures, you bear full responsibility for keeping the equipment in good working order: routine upkeep, manufacturer maintenance schedules, and all repairs. Finance leases place the broadest maintenance burden on the lessee because you’re treated as the economic owner. Operating leases also assign maintenance responsibility to the lessee in most cases, though the lease may set specific return-condition standards you’ll need to meet at the end of the term. Damage from misuse or neglect is always the lessee’s liability, regardless of lease type.
UCC Financing Statements
CIT will file a UCC-1 financing statement with your state’s filing office to put third parties on notice that the equipment is subject to CIT’s interest. This doesn’t change your day-to-day use of the equipment, but other lenders can see the asset is encumbered. If you try to use the same equipment as collateral for another loan, the existing UCC filing will surface during the lender’s search. Filing fees are modest, typically around $5 to $40 depending on the state, but the impact on your borrowing capacity is worth understanding upfront.
Sales Tax on Lease Payments
Unlike a purchase where you pay sales tax once at the point of sale, most states collect sales tax on each individual lease payment as it comes due. The rate depends on where the equipment is located and can range from zero in states with no sales tax to over 10 percent in high-tax jurisdictions once combined local rates are factored in. Over a five- or ten-year term, cumulative sales tax adds meaningfully to the total cost of the arrangement. Ask your relationship manager to confirm the applicable rate and build it into cash flow projections before signing.
Default and Early Termination
Equipment leases are governed by UCC Article 2A, which gives both parties statutory remedies when the other side fails to perform.
If you fail to make a payment when due, wrongfully reject equipment, or otherwise repudiate the lease, CIT can cancel the lease, withhold delivery of any undelivered goods, and take possession of equipment already in your hands. CIT can also dispose of the repossessed equipment and recover damages, or retain the goods and sue for the remaining rent due under the full lease term plus incidental damages.13Legal Information Institute. UCC 2A-523 – Lessors Remedies When the lessor keeps the goods and sues for rent, the recovery includes all accrued and unpaid rent plus the present value of the remaining lease payments, less any expenses saved because of your default.14Legal Information Institute. UCC 2A-529 – Lessors Action for the Rent A default doesn’t just cost you the equipment. You can owe the full remaining value of the lease even after CIT takes the asset back. The MLA may also include acceleration clauses, late fees, and default interest rates that stack on top of the statutory remedies.
The protections run both directions. If CIT fails to deliver conforming equipment or repudiates the lease, you can cancel, recover any rent and security deposits already paid, and pursue damages for the cost of covering (obtaining substitute equipment).15Legal Information Institute. UCC 2A-508 – Lessees Remedies
Walking away voluntarily before the scheduled end is expensive. Most equipment leases include a termination penalty that reflects the lessor’s remaining economic interest. A common approach is a declining penalty that is high in the early years when CIT has recovered less of its investment and drops as the lease approaches maturity. Some leases lock you in entirely for an initial period with no termination option at all. Termination provisions are negotiable before you sign, so if early exit flexibility matters, push for defined termination values in the equipment schedule rather than a blanket prohibition.
End-of-Term Options
What happens when the lease matures depends on the structure you chose at the outset. Every equipment schedule in the MLA will specify your options, and missing the decision window can result in automatic renewals or return obligations you didn’t anticipate.
- Fair market value purchase, common in operating leases: you buy the equipment at its appraised value when the lease ends. The price isn’t locked in advance, so if the asset held its value better than expected, you’ll pay more than you might have guessed.
- Fixed-price purchase, common in finance leases: a $1 buyout or other predetermined price is written into the schedule from the start, virtually guaranteeing you take ownership.
- Renewal or extension: most leases allow a renewal period at a reduced monthly rate. The renewal term and rate should be specified in the original schedule.
- Return: you must follow the return procedures in the MLA. These typically require you to de-install the equipment, package it professionally, and ship it to a location CIT designates, all at your expense. The equipment must meet the return-condition standards in the lease, so deferred maintenance comes home to roost here.
Watch the notification deadlines. Most MLAs require you to notify CIT of your election 90 to 180 days before the lease expires. If you miss that window, the lease may automatically renew on month-to-month terms that favor the lessor. Mark the notification date on your calendar the day you sign.