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Note 14 - Lease and Rental Debt
 9 Months Ended
Sep. 30, 2021
Notes to Financial Statements  
Debt Disclosure [Text Block]

14 – Lease and Rental Debt

 

On September 14, 2021, the Company entered into a credit agreement (“the WF Credit Agreement”) with the Lenders signatory thereto (the “WF Lenders”) and Wells Fargo Bank, National Association (“WF”), as administrative agent (in such capacity, the “WF Agent”). Pursuant to the terms of the WF Credit Agreement, the WF Lenders have agreed to make up to $250.0 million of revolving credit loans for certain of the Company’s capital expenditures, including commercial vehicle purchases for the Company’s Idealease lease and rental fleet, and general working capital needs. The Company expects to use the revolving credit loans available under the WF Credit Agreement primarily for the purpose of purchasing commercial vehicles for the Company’s Idealease lease and rental fleet.

 

The interest associated with the WF Credit Agreement was $1.2 million in the third quarter of 2021 and is recorded in interest expense on the financial statements. The WF Credit Agreement is a general borrowing facility, whereas prior to the WF Credit Agreement, interest expense associated with the Company’s Idealease lease and rental fleet was recorded in cost of sales as the borrowings were directly related to each lease and rental vehicle. This change in presentation of interest expense will result in increased gross margins from the Company’s Idealease lease and rental sales.