---
kind: "section"
citation: "12 C.F.R. § 714.5"
title: "12"
number: "714.5"
heading: "What is required if you rely on an estimated residual value greater than 25% of the original cost of the leased property?"
url: "https://uscodex.org/cfr/12/714.5"
---

# §714.5. What is required if you rely on an estimated residual value greater than 25% of the original cost of the leased property?


If the amount of the estimated residual value you rely upon to satisfy the full payout lease requirement of [§ 714.4(b)](/cfr/12/714.4.md?p=b) exceeds 25% of the original cost of the leased property, a financially capable party must guarantee the excess. The guarantor may be the manufacturer. The guarantor may also be an insurance company with an A.M. Best rating of at least a B + , or with at least the equivalent of an A.M. Best B + rating from another major rating company. You must obtain or have on file financial documentation demonstrating that the guarantor has the resources to meet the guarantee.


## Notes

### Authority

Authority: 12 U.S.C. 1756, 1757, 1766, 1785, 1789.

### Source

Source: 65 FR 34585, May 31, 2000, unless otherwise noted.