Certified Lease & Finance Professional (CLFP)

Question 1

Which financial ratio is most commonly used to assess a lessee's ability to service debt from operating cash flow?

Debt Service Coverage Ratio (DSCR) Current Ratio Price-to-Earnings Ratio Return on Equity

Correct Answer:

Debt Service Coverage Ratio (DSCR)

Question 2

In equipment leasing credit analysis, what does 'character' refer to in the 'Five Cs of Credit'?

The borrower's reputation and willingness to repay based on credit history and integrity The dollar amount of collateral pledged The economic conditions affecting repayment The borrower's cash flow capacity

Correct Answer:

The borrower's reputation and willingness to repay based on credit history and integrity

Question 3

What is a 'personal guarantee' in equipment leasing and when is it typically required?

A pledge by an individual (usually an owner) to be personally liable for the lease if the business defaults, typically required for small businesses or startups A government guarantee program for large transactions An insurance product that covers lease payments A vendor's commitment to buy back equipment

Correct Answer:

A pledge by an individual (usually an owner) to be personally liable for the lease if the business defaults, typically required for small businesses or startups

Question 4

What does a 'credit score' cutoff mean in the context of small-ticket equipment leasing?

A minimum FICO or business credit score below which an application is automatically declined or requires additional review The maximum loan amount for a given credit tier The equipment's resale value threshold The minimum years in business required

Correct Answer:

A minimum FICO or business credit score below which an application is automatically declined or requires additional review

Question 5

What is 'concentration risk' in a lease portfolio?

Excessive exposure to a single industry, geography, equipment type, or obligor that increases portfolio vulnerability The risk that interest rates will concentrate at one level The risk of equipment becoming obsolete The risk of currency fluctuations in a single market

Correct Answer:

Excessive exposure to a single industry, geography, equipment type, or obligor that increases portfolio vulnerability

Exam overview

About this Exam

Prepare with the Certified Lease & Finance Professional (CLFP) practice quiz. This question bank includes 30 questions covering equipment, lease, leasing, lessee, and credit. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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Certified Lease & Finance Professional (CLFP)

This practice set contains 30 questions from the matching question bank and focuses on equipment, lease, leasing, lessee, and credit. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.

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About this Exam

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Certified Lease & Finance Professional (CLFP)

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