Lease – Lease financing, Terms to be known, Types of Lease
Lease – A comprehensive Discussion, Check Complete Details for Lease financing. Hi Friends After Providing Complete details for Bridge Finance Here we are providing A comprehensive Discussion on Lease. In this article you can find Details for Lease financing, Definition of Lease, Various Terms Related to Lease like – Lessor, Lessee, Lease broker, Lease assets, Tenure / Term, Rental payments, Types of Lease like – Lease based on the term, Lease based on the method, Lease based in the parties involved, Lease based in the area etc. Now you Can Scroll down below and check complete details regarding “Lease – A comprehensive Discussion”
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Lease financing :
Lease financing is one of the popular and common methods source of finance based on assets, which is the alternative to the loan finance. Lease is a contract under which one party, the lessor (owner) of an asset agrees to grant the use of that asset to another (lessee) in exchange of periodic rental payments. It is one of the best medium and long term source of finance. As per Oxford dictionary Lease means A contract by which one party conveys land, property, services, etc. to another for a specified time, usually in return for a periodic payment.
Terms to be known :
(1) Lessor :
A lessor is a person or an organization that owns an asset and leases the asset in consideration of some periodical payments.
Lessor may be individual partnership, joint stock companies, corporation or financial institution.
(2) Lessee :
Lessee is person to whom to asset has been leased for a periodical payments. Lessee may be an individual , HUF , company etc.
(3) Lease broker :
Lease broker is an agent in between the lessor (owner) and lessee. He acts as an intermediary between the two parties in arranging the lease deals. Merchant banking divisions of foreign banks, subsidiaries indian banking and private foreign banks are acting as lease brokers.
(4) Lease assets :
They may be Plant and machinery , building, land or any property etc.,
(5) Tenure / Term :
It’s the period for which the lease deed has been executed. Generally it is mentioned in lease agreement/ deeds.
(6) Rental payments :
This is the periodical payments made by lessee to the lessor as a consideration for using the property .
Types of Lease :
(A) Lease based on the term
- Finance Lease
- Operating Lease
(B) Lease based on the method
- Sale and lease back
- Direct lease
(C) Lease based in the parties involved
- Single investor lease
- Leveraged lease
(D) Lease based in the area
- Domestic lease
- International lease
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