Lease finance or lease financing means contract between owner of asset and user of asset. In this contract only rent is paid at periodical intervals for using of asset by user. If user of asset has no money to pay initial amount of leasing contract, he can also do contract with third part to pay initial amount or specific period rent of lease. It will be also lease finance. In following words, we can explain its importance
1. # Lease finance is easy to get than getting loan for buying all fixed assets.
2. # Monthly rent payment for lease finance will be operating expenses. It will be allowed to deduct total income. So, company can get tax benefits in lease financing.
3. # It can show as invisible debt of company out of its balance sheet. You can show lease finance in the footnote of balance sheet, if you did contract directly with the owner of asset.
4. # One of major important point is that it is more flexible way of finance. You can fix your need of asset and get it one lease through lease financing.
5. # A study from IFC [PDF] has revealed that 30% of total share of lease financing as investment of fixed asset is of emerging and developed economies and now 15% of developing countries.
1. # Lease finance is easy to get than getting loan for buying all fixed assets.
2. # Monthly rent payment for lease finance will be operating expenses. It will be allowed to deduct total income. So, company can get tax benefits in lease financing.
3. # It can show as invisible debt of company out of its balance sheet. You can show lease finance in the footnote of balance sheet, if you did contract directly with the owner of asset.
4. # One of major important point is that it is more flexible way of finance. You can fix your need of asset and get it one lease through lease financing.
5. # A study from IFC [PDF] has revealed that 30% of total share of lease financing as investment of fixed asset is of emerging and developed economies and now 15% of developing countries.