Lease Finance :

‘Lease Finance’

 

Standard Bank Limited offered Lease Finance facilities to its valued client’s with a view to facilitate client’s to acquire equipments and machineries without investing any fund in spite of paying fixed lease rentals. Fixed lease rentals can be tailored both in terms of amount and timing to the profit and cash flow position of the Lease Holder. At the end of the lease contract the lease assets back to the client with a nominal and depreciated value.

 

Why Lease?

 

™          Free the Capital tied in capital expenditure.

™          Leasing allows utilizing the capital elsewhere to general higher profits, it also reduces cash outflow.

™          The equipment that leased does not appear on client’s balance sheet, client’s financial ratios improve.

™          To avoid budgetary constraints in capital expenditure.

™          Lease rentals are treated as revenue expenditure and are entirely deduct able for tax purposes. This provides a greater tax benefit in comparison to borrowing.

 

Item of Leasing

 

™          Any category of equipment and machinery.

™          Office automation equipments.

™          Medical treatment diagnosis equipments.

™          Vehicles for transportation etc.

 

Lease Term

 

Lease term means the period during which you can use the leased equipment exclusively which is non-cancelable. Generally it ranges from 3 to 5 years.

 

Lease Rentals

 

Determined based on acquisition cost and lease term. Monthly lease rental is most common, however, quarterly or half yearly payment can also be considered at the request of the client.

 

Expiry of Lease term

At the time of expiry of Lease term client buy back the lease assets from the Bank.