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leasing

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lease , financial lease

lease , financial lease

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    leasing leasing Presentation Transcript

    • Lease financing
    • Lease - definition  A lease is an agreement whereby the lessor conveys to the lessee , in return for lease rent, the right to use an asset for an agreed period of time.  A lessor is the owner of the asset where as lessee is the user of the asset .  The lease period may be for 1 hour , day , month, years .
    • Characteristics of lease  The Parties  The Asset  The Term  The Lease Rentals
    • Importance of lease financing  Leasing industry plays a very important role in the economic development of a country by providing money incentives to lessee  The lessee does not have to pay the cost of asset at the time of signing the contract of lease
    • Types of Lease
    • Financial lease...  It is non-cancelable in nature.  The lessee is responsible for the maintenance of the asset leased.  The lease generally provides for the renewal of the lease on expiry of the lease contract.  It is taken for an long period of time ie 25 yrs , 100 yrs etc
    • Types of assets included under such lease are :  Ships  Aircrafts  Railway Wagons  Land  Building  Heavy Machinery  Diesel Generating Sets etc
    • Operating Lease...  The lease is cancelable at short notice by the lessee.  The lessee has the option of renewing the lease after the expiry of the lease period  Asset maintenance and insurance etc. is the responsibility of the lessor and he charges for the same.  It is a high risk lease to the lessor, as any time it may be cancelled by the lessee.
    • Operating lease is generally given for :  Computers  Office equip  Automobiles  Trucks  Other equip  Telephones  Walki-talki
    •  Sale and Leaseback:  Owner of the asset sells it to the lessor, and gets the asset back under the lease agreement.  Ownership transfer from the original owner to the lessor, who again leases out the asset.  Immediate financing to the seller company, whose funds are tied up in the asset.