The document discusses leasing and hire purchase. It provides definitions of leasing and hire purchase. It outlines the key parties involved in leasing (lessor and lessee) and hire purchase (owner and hirer). It also discusses the history and development of leasing and hire purchase in various regions including India. The document then covers types of leases, guidelines for banks involved in hire purchase business, and factors to consider like customer assessment, purpose, amount, period, repayment, and security."
Hire Purchase System
The process of Hire Purchase
Features of Hire Purchase
Advantages and Disadvantages of Hire Purchase
Contents of Hire Purchase agreement
Installment Purchase
Important Definitions
Difference between Hire Purchase and Installment Purchase
Difference between Sales and Hire Purchase
Lease
Features of Lease
Merits and Demerits of Lease
Difference between Hire Purchase and Lease
This ppt is covering lease finance in detail, covering advantages & disadvantages. Types of lease. Instead of doing hard work rely on smart work. Time you devote on copy pasting. Channelize that time in understanding topic via reading it.
This presentation is on Credit rating agencies in India. here I presents it's origin, importants, benefits, objectives, need and about different rating agencies.
Hire Purchase System
The process of Hire Purchase
Features of Hire Purchase
Advantages and Disadvantages of Hire Purchase
Contents of Hire Purchase agreement
Installment Purchase
Important Definitions
Difference between Hire Purchase and Installment Purchase
Difference between Sales and Hire Purchase
Lease
Features of Lease
Merits and Demerits of Lease
Difference between Hire Purchase and Lease
This ppt is covering lease finance in detail, covering advantages & disadvantages. Types of lease. Instead of doing hard work rely on smart work. Time you devote on copy pasting. Channelize that time in understanding topic via reading it.
This presentation is on Credit rating agencies in India. here I presents it's origin, importants, benefits, objectives, need and about different rating agencies.
This deck outlines how venture capital works from the venture capital perspective from investment criteria, investment strategy, how deal flow works, and deal flow management.
Leasing and hire purchase are both financial arrangements.Sonam704174
Leasing and hire purchase are both financial arrangements for acquiring assets. Leasing involves renting an asset for a specified period, while hire purchase allows the buyer to use the asset during the payment period with ownership transferring after the final installment.
NO1 Uk Rohani Baba In Karachi Bangali Baba Karachi Online Amil Baba WorldWide...Amil baba
Contact with Dawood Bhai Just call on +92322-6382012 and we'll help you. We'll solve all your problems within 12 to 24 hours and with 101% guarantee and with astrology systematic. If you want to take any personal or professional advice then also you can call us on +92322-6382012 , ONLINE LOVE PROBLEM & Other all types of Daily Life Problem's.Then CALL or WHATSAPP us on +92322-6382012 and Get all these problems solutions here by Amil Baba DAWOOD BANGALI
#vashikaranspecialist #astrologer #palmistry #amliyaat #taweez #manpasandshadi #horoscope #spiritual #lovelife #lovespell #marriagespell#aamilbabainpakistan #amilbabainkarachi #powerfullblackmagicspell #kalajadumantarspecialist #realamilbaba #AmilbabainPakistan #astrologerincanada #astrologerindubai #lovespellsmaster #kalajaduspecialist #lovespellsthatwork #aamilbabainlahore#blackmagicformarriage #aamilbaba #kalajadu #kalailam #taweez #wazifaexpert #jadumantar #vashikaranspecialist #astrologer #palmistry #amliyaat #taweez #manpasandshadi #horoscope #spiritual #lovelife #lovespell #marriagespell#aamilbabainpakistan #amilbabainkarachi #powerfullblackmagicspell #kalajadumantarspecialist #realamilbaba #AmilbabainPakistan #astrologerincanada #astrologerindubai #lovespellsmaster #kalajaduspecialist #lovespellsthatwork #aamilbabainlahore #blackmagicforlove #blackmagicformarriage #aamilbaba #kalajadu #kalailam #taweez #wazifaexpert #jadumantar #vashikaranspecialist #astrologer #palmistry #amliyaat #taweez #manpasandshadi #horoscope #spiritual #lovelife #lovespell #marriagespell#aamilbabainpakistan #amilbabainkarachi #powerfullblackmagicspell #kalajadumantarspecialist #realamilbaba #AmilbabainPakistan #astrologerincanada #astrologerindubai #lovespellsmaster #kalajaduspecialist #lovespellsthatwork #aamilbabainlahore #Amilbabainuk #amilbabainspain #amilbabaindubai #Amilbabainnorway #amilbabainkrachi #amilbabainlahore #amilbabaingujranwalan #amilbabainislamabad
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
NO1 Uk Black Magic Specialist Expert In Sahiwal, Okara, Hafizabad, Mandi Bah...Amil Baba Dawood bangali
Contact with Dawood Bhai Just call on +92322-6382012 and we'll help you. We'll solve all your problems within 12 to 24 hours and with 101% guarantee and with astrology systematic. If you want to take any personal or professional advice then also you can call us on +92322-6382012 , ONLINE LOVE PROBLEM & Other all types of Daily Life Problem's.Then CALL or WHATSAPP us on +92322-6382012 and Get all these problems solutions here by Amil Baba DAWOOD BANGALI
#vashikaranspecialist #astrologer #palmistry #amliyaat #taweez #manpasandshadi #horoscope #spiritual #lovelife #lovespell #marriagespell#aamilbabainpakistan #amilbabainkarachi #powerfullblackmagicspell #kalajadumantarspecialist #realamilbaba #AmilbabainPakistan #astrologerincanada #astrologerindubai #lovespellsmaster #kalajaduspecialist #lovespellsthatwork #aamilbabainlahore#blackmagicformarriage #aamilbaba #kalajadu #kalailam #taweez #wazifaexpert #jadumantar #vashikaranspecialist #astrologer #palmistry #amliyaat #taweez #manpasandshadi #horoscope #spiritual #lovelife #lovespell #marriagespell#aamilbabainpakistan #amilbabainkarachi #powerfullblackmagicspell #kalajadumantarspecialist #realamilbaba #AmilbabainPakistan #astrologerincanada #astrologerindubai #lovespellsmaster #kalajaduspecialist #lovespellsthatwork #aamilbabainlahore #blackmagicforlove #blackmagicformarriage #aamilbaba #kalajadu #kalailam #taweez #wazifaexpert #jadumantar #vashikaranspecialist #astrologer #palmistry #amliyaat #taweez #manpasandshadi #horoscope #spiritual #lovelife #lovespell #marriagespell#aamilbabainpakistan #amilbabainkarachi #powerfullblackmagicspell #kalajadumantarspecialist #realamilbaba #AmilbabainPakistan #astrologerincanada #astrologerindubai #lovespellsmaster #kalajaduspecialist #lovespellsthatwork #aamilbabainlahore #Amilbabainuk #amilbabainspain #amilbabaindubai #Amilbabainnorway #amilbabainkrachi #amilbabainlahore #amilbabaingujranwalan #amilbabainislamabad
NO1 Uk Divorce problem uk all amil baba in karachi,lahore,pakistan talaq ka m...Amil Baba Dawood bangali
Contact with Dawood Bhai Just call on +92322-6382012 and we'll help you. We'll solve all your problems within 12 to 24 hours and with 101% guarantee and with astrology systematic. If you want to take any personal or professional advice then also you can call us on +92322-6382012 , ONLINE LOVE PROBLEM & Other all types of Daily Life Problem's.Then CALL or WHATSAPP us on +92322-6382012 and Get all these problems solutions here by Amil Baba DAWOOD BANGALI
#vashikaranspecialist #astrologer #palmistry #amliyaat #taweez #manpasandshadi #horoscope #spiritual #lovelife #lovespell #marriagespell#aamilbabainpakistan #amilbabainkarachi #powerfullblackmagicspell #kalajadumantarspecialist #realamilbaba #AmilbabainPakistan #astrologerincanada #astrologerindubai #lovespellsmaster #kalajaduspecialist #lovespellsthatwork #aamilbabainlahore#blackmagicformarriage #aamilbaba #kalajadu #kalailam #taweez #wazifaexpert #jadumantar #vashikaranspecialist #astrologer #palmistry #amliyaat #taweez #manpasandshadi #horoscope #spiritual #lovelife #lovespell #marriagespell#aamilbabainpakistan #amilbabainkarachi #powerfullblackmagicspell #kalajadumantarspecialist #realamilbaba #AmilbabainPakistan #astrologerincanada #astrologerindubai #lovespellsmaster #kalajaduspecialist #lovespellsthatwork #aamilbabainlahore #blackmagicforlove #blackmagicformarriage #aamilbaba #kalajadu #kalailam #taweez #wazifaexpert #jadumantar #vashikaranspecialist #astrologer #palmistry #amliyaat #taweez #manpasandshadi #horoscope #spiritual #lovelife #lovespell #marriagespell#aamilbabainpakistan #amilbabainkarachi #powerfullblackmagicspell #kalajadumantarspecialist #realamilbaba #AmilbabainPakistan #astrologerincanada #astrologerindubai #lovespellsmaster #kalajaduspecialist #lovespellsthatwork #aamilbabainlahore #Amilbabainuk #amilbabainspain #amilbabaindubai #Amilbabainnorway #amilbabainkrachi #amilbabainlahore #amilbabaingujranwalan #amilbabainislamabad
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
2. Roll No.
Name
Content
Slide
No.
111
Bharat Pawar
Advantages & Disadvantages of 27-31
Leasing
112
Sonal Mulay
Legal Aspects of Leasing &
Content of Lease agreement
12-16
113
Sneha Patil
Types Of Lease
17-21
114
Bhavana Parab
Lease Financing by Banks
22-26
115
Tejas Lolam
Banks & Hire purchase
business & Bank Credit
40-46
2
3. Roll No.
Name
Content
Slide
No.
118
Mandar Desai
(Group Leader)
Introduction, origin &
Development, Conclusion
4-11 &
59
120
Madhuri Dolas
Difference between Leasing &
Hire Purchase
53-58
142
Preeti Chandavkar
Features, Advantages &
Disadvantages of Hire
Purchase
32-39
143
Akshata Shinde
Comparisons between Buying & 48-52
Leasing
3
4.
Introduction:
•
Leasing is distinguished from most other forms of
finance by the fact that the financier (the lessor) is
the legal owner of the leased asset.
•
The asset user (the lessee) obtains the right to
use the asset in return for periodic payments
(lease rentals) to the lessor.
4
5. Leasing, as a financing concept, is an agreement
between two parties, the leasing company or
lessor and the user or lessee.
The rentals are predetermined and payable at
fixed intervals of time, according to the mutual
convenience of both the parties.
However, the lessor remains the owner of the
equipment over the primary period.
5
6. Definition: “A lease is a form of contract
transferring the use or occupancy of land, space,
structure or equipment in consideration of a
payment, usually in form of a rent”
Leasing is an important source of finance for the
lessee. Leasing Co. finance for:
1. Modernization of business
2. Balancing equipment
3. Cars and other vehicles and durables
4. Items entitled to 100% or 50% depreciation.
5. Assets which aren’t being financed by
banks/institutions.
6
7.
•
•
Introduction:
Hire Purchase is the legal term for a contract, in
which persons usually agree to pay for goods in
parts or a percentage at a time.
When a sun equal to the original full price plus
interest has been paid, the buyer may then
exercise an option to buy the goods or return the
goods to the owner.
7
8. History of leasing dates back to 200 BC when
Sumerians leased goods.
Romans had developed a full body law relating to
lease for movable and immovable property.
Modern Leasing appeared first time in 1877 when
Bell Telephone Co. began renting telephones in
USA.
8
9. Since WW II, the use of leasing has been
greatly expanded and is constantly used for
new products and new industries.
Henry Scholfeld set up US Leasing
Corporation with a capital of $20,000 in May
1952.
The concept of financial leasing was
pioneered in India during 1973, First company
was set up by Chidambaram group in 1973.
9
10. The origin of hire purchase system can be traced
back to the advent of industrial development in
UK.
Cowper wait & sons, a furniture dealer introduced
the system of Hire purchase in USA, in 1807.
Bishogate piano-maker introduced the system of
Hire purchase in 1846, in UK.
10
11. In India, Hire purchase finance started only after
WW I.
However, it was only after WW II that it’s growth
assumed visible dimensions.
With the increase in economic activity, many NonBanking financing companies entered the scene in
the fifties and sixties.
11
12. “The delivery of goods by one person to
another, for some purpose, upon a contract
that they shall, when the purpose is
accomplished, be returned or otherwise
disposed of according to the directions of the
person delivering them. The person
delivering the goods is called the ‘bailor’ and
the person to whom they are delivered is
called the
‘bailee’.”
12
13. THE FOLLOW
ING IMPLICATIONS FOR THE
LESSER AND LESSE
The lesser has the duty to deliver the asset to the
lessee,
The lessee has the obligation to pay the lease
rentals as specified in the lease agreement
13
14. Description of the lessor, the lessee, and the
equipment.
Amount, time, and place of lease rental payments.
Time and place of equipment delivery.
Lessee’s responsibility for taking delivery and
possession of the leased equipment.
Lessee’s responsibility for maintenance, repairs,
registration, etc.
14
15. Lessee’s
right to enjoy the benefits of the
warranties provided by the equipment
manufacturer.
Insurance to be taken by the lessee on
behalf of the lesser.
Variation in lease rentals.
Option of lease renewal for the lease
period.
Return of equipment on expiry of the lease
15
18. Background
• Company-owned fleet that included various
makes & models of cars used by their sales staff
and senior managers
• High, uncontrolled and unpredictable
maintenance costs.
• Resale of used cars at the time of disposal was a
challenge. Unpredictable resale values!
• Decisions on choice of models not based on total
cost of ownership or usage
Roadblocks
• Top and middle management had difference of
opinion on outsourcing of fleet
• Staff who owned company cars
18
19.
Solution
• LeasePlan’s ‘Total Cost of Ownership’ (TCO)
model for vehicle outsourcing made sure only
efficient car models are used by the company;
thereby reducing costs significantly
• LeasePlan’s fixed monthly outflows provided the
immunity from maintenance and damage risks
• Resale risks for these vehicles are completely
managed by LeasePlan
• Existing fleet is outsourced to LeasePlan through
Sale and Lease Back
• All new vehicles are leased through LeasePlan
• All old vehicles (more than 4 years old) were
replaced with new leased vehicles from
LeasePlan.
19
20.
Result
• Savings! Company hived off their entire fleet to
LeasePlan. Cost reduction between 20- 25%
• Release of capital from non-core assets sitting
on company’s books
• Better accounting and peace of mind! Outflows
have become predictable and under control
• A definite cultural change in the staff
20
22. A
financial Lease is also known as Capital lease,
Long-term lease, Net lease & Close lease
Under a financial lease, the rate of lease would be
fixed based on the kind of lease, the period of
lease, periodicity of rent payment, & the rate of
depreciation & other tax benefits available.
The high cost of equipments such as office
equipment, diesel generators, machine tools,
textile machinery, containers, locomotives etc., is
leased under financial lease.
22
23. An
operating lease is also known as service lease,
short-term lease or true lease.
The lease is for a limited period may be in a
month, six months, a year or few years.
Normally, the lease rentals will be higher as
compared to other
leases on account of
short period of primary lease.
23
24. A
leverage lease is used for financing those assets
which require huge capital outlay.
The outlay for purchase cost is generally from ` 50
lakhs to ` 2 crore.
Asset has economic life of 10 years or more.
The Lessor acquires the assets as per the terms of
the lease agreement but finances only a part of the
total investment, say 20%-50%
24
25. A vendor leasing is one where the retail vendors tie up
with the lease finance companies which give financing
option to the customers of the vendors to purchase a
product.
This type of lease is popular in auto finance.
25
27. •Supplementing
their conventional lending
business, commercial banks have of late entered
into the business of financing lessor of
equipment or assets.
•The
banker himself will not purchase equipment
or asset meant for leasing out, bank would
provide finance to the party
27
28. Lessee selects the equipment from the
manufacturer or distributor and negotiates the
terms of warranties, maintenance etc. Delivery,
installation, the price and terms of payments.
The lessor purchases the equipment either
directly from the vendor or from the lessee
following the delivery.
Lessor retains ownership of equipment while the
lessee enjoys the use.
The lease is for non-cancelable period, lessor
seeks to recover his investment with some profit
during that period.
28
29. Unlike in the case of financing lease, in an
operating lease, the lessor leases same asset to
different lessees successively after the
expiration of each contract.
A single contract does not result in recovery of
the capital cost in full.
This lease is usually for the period that is
significantly shorter than the economic life of
the equipment.
This lease is subject to cancellation by both
side.
29
30.
While various definition attempt to convey the
essential features of the lease, nuances exist.
There are long-term & Short-term leases.
There are leases with purchase option at the
end of the lease period and leases that do not
give the lessee such opportunity
30
31.
The lessor also relies on the residual value of
the equipment to partly recover his investment.
In an operating lease, the lessor leases the
equipment to many lessees over the equipments
economic life.
Operating lease, are usually confined to
equipments having an established used or have
an active second market
31
32.
Permit alternative use of funds
A leasing arrangement provides a firm with the
use and control over asset without incurring huge
capital expenditure.
Faster and cheaper credit
Acquisition of assets under leasing agreement is
cheaper and faster than any other source of
finance.
32
33. Flexibility
Leasing arrangements may be tailored to the lessee’s
needs more easily than ordinary financing. The lessee
can utilize more funds for working capital needs.
Facilitates additional borrowings
Leasing may increase long-term ability to acquire
funds. The lessee can utilize more funds for working
capital needs.
Protection against obsolescence
A firm can avoid risk of obsolescence by entering into
operating lease agreement.
33
34. No restrictive covenants
The restrictive covenants which are usually
imposed under debenture or loan agreement are
absolutely absent in a lease agreement.
Hundred percent financing
Lease financing enables a firm to acquire the use of
an asset without having to make a down payment.
So, hundred per cent financing is assured to the
lessee.
Boom to small firm
It is a boon to small firms and technocrats who are
able to make promoters contribution as required by
financial institutions.
34
35. Lease is not a suitable mode of project finance
Certain tax benefits/incentives such as subsidy
may not be available on leased equipment.
The value of real assets such as land and
building may increase during lease period. In such
a case, the lessee loses the advantage of a
potential capital gain.
The cost of financing is generally higher than that
of debt financing.
35
36. A manufacturer who wants to discontinue a
particular line of business will not in a position to
terminate the contract except by paying heavy
penalties.
In case of lease agreement, it is lessor who has
purchased the asset from the supplier and not the
lessee.
If the lessee is not able to pay rentals regularly,
the lesser would suffer a loss particularly when the
asset is a sophisticated one and less liquid.
In the absence of exclusive laws dealing with the
lease transaction, several problems crop up
between lesser and lessee resulting in
unnecessary complications and avoidable
tensions.
36
39.
Higher Purchase is the hiring of goods at a stated
rental with the option to buy the goods at the end of
the hire purchase term.
The individual availing HP financing is the hirer and
the financier is the owner.
The rental payment is inclusive of the repayment of
principal as well as interest.
The hire purchaser acquires the goods immediately
on signing the hire purchase agreement but the
ownership of the same is transferred only when the
39
40.
HP transactions are governed by the Hire Purchase Act
1972.
The HP Act sets out the forms and contents of HP
agreements, the legal rights, duties, obligations of hirers
and financiers.
The HP Act is administered by the Ministry of Domestic
Trade and Consumer Affairs.
Hire purchase should be distinguished from installment
sale wherein property passes to the purchaser with the
payment of the first installment.
40
41. HP agreements must be in writing and signed by both the
parties.
They must clearly lay out the following information:
A clear description of the goods
The cash price for the goods
The HP price
The deposit
The monthly installments
Rights to parties
41
42.
Possession of goods
Each installment is treated as hire charges.
Ownership
Default in the payment
Terminate the agreement
42
43.
Spread the cost of finance
Interest-free credit
Higher acceptance rates
Sales
Debt solutions
43
45.
The Government of India has permitted banks
to engaged in ‘hire purchase’ business on Sep7- 1990.
U/S 6 (1) (0) of the banking
regulation act 1949.
By this notification the banks are unable to carry
on hire purchase business, & to set up
subsidiaries for undertaking such business.
45
46.
The subsidiary of commercial banks lends to the dealer
or to finance intermediary who has already financed
Articles sold by the dealers to the hire purchase contract.
The bank subsidiary has to take extra precaution,
looking to the nature of transaction under hire purchase
contract.
The bank subsidiary would make an assessment of the
standing and financial position of the dealer or of the
hire purchase of company.
46
47. The following guidelines should be made
applicable to banks in ‘hire purchase
business’......
Banks shall not themselves undertake directly the
business of hire purchase.
Only that banks which have set up subsidiaries for
the business equipment leasing, merchant banking
etc. may undertake hire purchase business.
An existing bank subsidiary that may here after
transact hire purchase business or set up new
subsidiary to transact such business.
47
48. Into consideration the principles of good
lending and carry out the procedures below
Customer
Purposes
Amount
Period
Repayment
Security
Monitoring & Control
48
49. Customer
When approached for hire purchase facility,
the subsidiary should take care to make the
assessment of the standing and financial
position of the business.
Purposes
The type of goods being used to finance in
the hire purchase transaction is of great
importance.
49
50. Amount
Bank subsidiaries taking up hire purchase
business would be well to discourage small
individual loans.
Period
The facility will normally be extended over to
three years.
50
51. Repayment
Repayment is spread evenly or agreed over
the loan period. Its should be adoptable to
the hirer’s needs
Security
Hire purchase advance is against
hypothecation of equipment / vehicles &
pledge of hundis / pronotes & lodgment of
hire purchase agreements.
51
52. Monitoring
& controlling
The bank needs to control over the ongoing
situation.
The bank will keep a running total of these
amounts, returning agreements which have
become lapsed to their customers.
52
54. There
are many distinct differences between
buying and leasing, regardless if such a
transaction or agreement applies to property,
machinery, equipment or other assets.
The differences lies in that a lease is
conceptually very similar to the principles of
“borrowing”. The owner of the leased property is
not transferred under the terms of the lease
agreement.
Purchasing , on the other hand, involves an
agreement that outlines the terms under which
the purchaser acquires ownership of the desired
item, property or asset. The purchase
54
55. Responsibility is a key factor.
In a purchase, the responsibility for the equipment falls
solely on the shoulders of the business owner.
The ultimate responsibility for the life of the equipment ,
after a purchase is complete, falls on the buyer.
RESALE VALUE
In case of a purchase, the full value of the asset is
transferred to the purchaser, as the new owner.
In a lease, the lessor has no claim to the asset upon the
conclusion of a lease cannot be, in part or in whole be
recouped through a resale of the asset.
55
56. Depreciation
is a major consideration for
individuals deciding between buying and
leasing.
In business, there exists a basic rule of thumb : “
If it appreciates, buy it. If it depreciates, lease it”.
MAINTENANCE
The
instance of a lease the ultimate ownership
is retained by the lessor, it is in the lessor’s best
interest to maintain the asset in its best working
order.
56
57. In
the event of a purchase, the full value of the
asset must be paid to the seller.
In
the event of a lease, however, only a portion
of the full value is assessed, typically around
50% however the figure varies based on the
duration and type of lease.
As
a corollary, a lessor could be granted the use
of an asset that could otherwise be cost
prohibitive.
57
60. LEASING
HIRE PURCHASE
in hire purchase, the hirer
In lease, ownership
lies with the lesser.
has the option to
The lessee has the
purchase. The hirer
right to use the
becomes the owner of
equipment and does
the asset/equipment
not have an option to
immediately after the last
purchase.
installment is paid.
METHOD OF FINANCING
Leasing is a method of
financing business
assets only.
Hire Purchase is a
method of financing both
business assets and
consumer articles.
60
61. LEASING
HIRE PURCHASE
In Leasing, depreciation
and investment
allowance cannot be
claimed by the Lesser.
In Hire Purchase
depreciation and
investment allowance can
be claimed by the Hirer.
TAX BENEFITS
The entire lease rental is
tax deductible expense.
Only the interest
components of the Hire
Purchase installment are
tax deductible.
61
62. LEASING
HIRE PURCHASE
The hirer, in purchase
The lessee, not being the
being the owner of assets
owner of the assets and
and enjoy the salvage
does not enjoy the
value of the assets.
salvage value of the
assets.
DEPOSIT
In Leasing the Lessee is
not required to make any
deposit.
In Hire Purchase, the
Hirer is required to
deposit 20% of the cost.
62
63. LEASING
In Leasing, the Lessee
take the asset on a rent
basis.
HIRE PURCHASE
In Hire Purchase the
asset is purchased by the
Hirer.
EXTENT OF FINANCE
Lease financing is
invariably 100%
financing. It does not
required any immediate
down payment or margin
money by the Lessee.
In Hire Purchase, a
margin equal to 20-25%
of the cost of the assets
to be paid the Hirer.
63
64. LEASING
HIRE PURCHASE
In Leasing, the
maintenance of leased
asset is the responsibility
of the Lessee.
In Hire Purchase, the
cost of maintenance of
hired assets is to be
borne by the Hirer
himself.
REPORTING
The leased assets are
shown by way of footnote
only.
The assets on hire
purchase is shown in the
balance sheet of the Hire.
64
65. Leasing today accounts for 6% of total capital
investment in India.
The 8th plan envisages capital formation of `8000
billion, 50% of which is to take place in the private
sector.
Leasing will play a significant role to account for at
least 15% of gross capital formation
The infrastructure financing is very crucial for
economic development and it can’t be accelerated
without leasing industry.
65
66. A Lease is a contract whereby the owner of the
assets transfers the right to use the assets against
payment of fixed rent which are called lease
rentals.
The Lessor is the owner of the lease and Lessee
is the user of the asset.
Hire Purchase is a contract of owner & hirer and
after the contract, ownership is passed on the
hirer on payment of full amount.
66