CLFP Cheat Sheet 2026

The 30 highest-yield CLFP facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

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)
2. What document serves as the primary legal agreement between a lessor and lessee in an equipment lease transaction? → Master Lease Agreement
3. Which organization oversees the continuing education requirements for CLFPs? → The CLFP Foundation.
4. Under ASC 842 (the current FASB lease accounting standard), a lessee is required to recognize right-of-use assets and lease liabilities for: → Both finance leases and operating leases
5. In a 'true lease' for federal income tax purposes, which party retains ownership of the leased equipment and is entitled to claim depreciation deductions? → The lessor
6. What information is typically contained in a lease 'rider' or addendum? → Special terms that modify or supplement the base lease agreement
7. What is the 'money factor' in equipment leasing? → A decimal number used to calculate the finance charge portion of a lease payment
8. How often must a CLFP engage in continuing education to maintain their designation? → Every three years.
9. Which Uniform Commercial Code (UCC) article specifically governs leases of personal property, including most equipment leases? → Article 2A
10. What is the purpose of an 'interim rent' provision in a lease? → To collect rent from the equipment delivery date until the lease commencement date
11. 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
12. What is an 'evergreen' lease clause? → A provision that automatically renews the lease unless proper notice is given to terminate
13. What does 'residual value' mean in equipment leasing? → The estimated value of leased equipment at the end of the lease term
14. Which of the following activities typically count towards CLFP continuing education credits? → Participating in industry conferences and seminars.
15. The Electronic Signatures in Global and National Commerce Act (E-SIGN Act) established that electronic signatures on lease agreements are: → Legally valid and enforceable with the same legal effect as handwritten signatures
16. What is required to maintain the CLFP designation after initially obtaining it? → Engaging in continuing education and adhering to ethical standards.
17. Which document is filed to perfect a lessor's security interest in leased equipment under Article 9 of the UCC? → UCC-1 Financing Statement
18. What happens if a CLFP does not complete the required continuing education within the specified time frame? → The CLFP designation is revoked, and the individual must retake the certification exam.
19. Under ASC 842, how does a lessee record a finance lease on its balance sheet? → As a right-of-use (ROU) asset and a corresponding lease liability
20. Under Dodd-Frank, which equipment leasing transactions are most likely subject to Consumer Financial Protection Bureau (CFPB) oversight? → Leases to individual consumers or transactions with consumer-purpose characteristics
21. Which organization is responsible for administering the CLFP certification? → The CLFP Foundation.
22. What is a 'lease rate factor' (LRF)? → A decimal multiplied by the equipment cost to calculate the periodic payment amount
23. What does 'advance payment' mean in the context of a lease structure? → Lease payments made at the beginning of each period rather than at the end
24. In a lease agreement, what does an 'end-of-term' option typically allow the lessee to do? → Purchase, renew, or return the equipment
25. The Truth in Lending Act (TILA) and its companion Consumer Leasing Act disclosure requirements apply primarily to: → Consumer lease transactions with individual lessees
26. The Equal Credit Opportunity Act (ECOA) prohibits equipment lessors from discriminating against credit applicants based on: → Race, color, religion, national origin, sex, marital status, or age
27. What is a 'hell or high water' clause in a lease agreement? → An unconditional obligation to pay rent regardless of equipment condition
28. What is Inception of the Lease? → The date lease commitment.
29. What is 'expected loss' in credit risk management for a lease portfolio? → Probability of Default (PD) × Loss Given Default (LGD) × Exposure at Default (EAD)
30. What is the significance of a 'non-cancellable' lease provision? → The lessee cannot terminate the lease before the end of the agreed term without penalty