any suggetions plz do make for better presentation

1. TERM LOAN
&
LEASE FINANCING

2. Meaning
• A term loan is a
monetary loan that is repaid
in regular payments over a
set period of time. Term
loans usually last between
one and ten years, but may
last as long as 30 years in
some cases. A term loan
usually involves an
unfixed interest rate that
will add additional balance
to be repaid.

3. Usage
• Term loans can be given on an
individual basis but are often used
for small business loans. The ability
to repay over a long period of time
is attractive for new or expanding
enterprises, as the assumption is
that they will increase
their profit over time. Term loans
are a good way of quickly
increasing capital in order to raise a
business’ supply capabilities or
range. For instance, some new
companies may use a term loan to
buy company vehicles or rent more
space for their operations.

4. Considerations
One thing to consider when
getting a term loan is
whether the interest rate
is fixed or floating. A fixed
interest rate means that the
percentage of interest will
never increase, regardless of
the financial market. Floating
interest rates will fluctuate
with the market, which can
be good or bad for you
depending on what happens
with the global and national
economy.

5. Student loans
• Some student loans are essentially
term loans. In the United States,
the Stafford Loan is often offered
to college students as a means of
paying tution and living expenses.
This loan is unique in several
ways, and can be very beneficial
to students. Students are also
typically given a six month grace
period following graduation
before beginning repayments.

7. Meaning Of Lease
• “Lease is a contract whereby the owner of an
asset (lessor) grants to another party (lessee)
the exclusive right to use the asset usually for
an agreed period of time in return for the
payment of the rent.”

8. •Owner of the
AssetLessor
•User of the
AssetLessee

10. The person who wants to manufacture
the product needs an equipment to do
it but not the ownership of an
equipment. The concept of lease
financing says ‘ Eat the mangoes
rather than counting the trees.’

11. Lease financing denotes
procurement(buying) of assets through lease.
The subject of leasing falls in the category
of finance.
Leasing has grown as a big industry in
USA and UK and spread to other countries in
the present century.
In India, the concept was started in 1973.
It is a commercial arrangement whereby the
equipment owner conveys to the equipment
user the right to use the equipment in return
for a rental.

12. Types of
leasing
Financial and
operating
lease
Sale and lease
back
Single investor
and leveraged
lease
Domestic and
international
lease

13. Financial lease
• The lessor transfers to the lessee substantially
all the risks and rewards incidental to the
ownership of the asset.
• It is a long term non-cancellable lease.
• Types of assets included under such lease are
lands, building, heavy machinery etc.

14. Operating lease
• It is one which is not a financial lease.
• It is a short term cancellable lease.
• The lessor provides services attached to the
leased asset such as maintenance, repair and
technical advice.
• It is also known as service lease. Operating
lease is primarily used for computers, office
equipments, trucks etc.

15.  in this, the lessee is already the owner of the
asset. He, under the lease agreement, sells the
asset to the buyer.
The buyer leases back the same asset to the
owner (now the lessee) in consideration of lease
rentals.
 under the sale and lease back, the lessee not only
retains the use of the assets but also gets funds
from the sale of the assets to the lessor.

16. Single investor lease
• There are only two parties to the lease
transaction, the lessor and the lessee.

17. • Arrangement for assets of huge capital outlay.
• It is a 3 sided arrangement.
• Lesser borrows a part of purchase cost of the asset from the
third party i.e. lender.

18. Domestic lease
• A lease transaction is classified as domestic if
all the parties to the agreement are
domiciled(resided) in the same country.

19. International lease
If the parties to the lease transaction are domiciled in the
different countries, it is known as international lease.
International
lease
Import lease Export lease

20. • Import lease: the lessor and the lessee are
domiciled in the same country but the equipment
supplier is located in a different country.
Cross-border lease(export lease): when the lessor
and the lessee are domiciled in different
countries, the lease is classified as cross border
lease. The domicile of supplier is immaterial.

21. SELLER BUYER
LESSORLESSEE