Category: Best Practices

In leasing, lessors (owner of an asset) are faced with two major types of risks: credit and asset risks. Before you as lessors commit into any lease transaction, it is imperative to conduct a proper analysis of the lessee (user of an asset) on these two types of risk. Lessor. having assessed the credit worthiness of the lessee, it is equally imperative to assess the other risks, which may confront the lessor. These include: (1)       OWNERSHIP RISK The lessor…

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What are the steps involved in the booking of lease? It has become necessary to detail the steps involved in the booking of leases as guide to lessors (owners of asset) who may not have had any experience in the business. In doing so, however, this rely on the approach used by a major bank and lessor in Nigeria. Before a lease is booked, the following minimum steps must be taken by the potential lessor: Request for a lease…

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Usage Terms and Conditions:   Another simple technique of asset management is to simply specify the usage terms and conditions of equipment in the main lease agreement. For instance, it may be stipulated that the equipment should be operated for a specified number of hours per day and that only certain category of persons should be allowed to operate the equipment. It should be noted that many lessees, especially in the oil industry prefer operating leases since they expect to…

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Apart from checking on the standing of the lessee (user of asset), the lessor (owner of asset) has the responsibility of ensuring that the asset under lease is well managed. This is fundamental to the overall achievement of the lessor’s business objective, because the lessee will only be motivated to pay if the asset under lease is in existence and functional. The fact that the lessor has little or no control on the usage of the equipment makes this…

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The success of operating leases (leases that the lessees do not intend to own the asset at the end of the lease) where vehicles are the assets involved, depends on variety of factors and most essentially the driver. Therefore it is important to fully understand how to manage drivers in operating lease business and let them to know the value of the asset entrust to them as well as the level of responsibility the management expects from them. .The…

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The success of any Fleet and Transport Logistics operations depends on the application of modern processes. Practitioners should therefore get themselves acquainted with modern key management ingredients to enhance profitability. This aspect of business is gaining more vibes and gradually becoming an investor’s delight. Factors that impede Success in Fleet Management i. Operational Environment { Deploying the right vehicle to the right job}. ii. Non Standardization of fuel and others.{Make use of fuel treatment organs + Select good filling…

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To succeed in leasing business requires consistent search for skills and techniques required for success. Succeeding with leasing provides the operators with template for lease practice and is designed to enhance professional development of lease practitioners. There is need for a broad-based education in leasing for all personnel, regardless of level of expertise or function, intended to facilitate better understanding of the industry and fundamental principles of leasing that are critical not only to the success of the organisation,…

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The fleet business will succeed when the following guiding principles are put in place: Fleet Management companies must have a clear cut Fleet Management Policy. This function must not be outsourced. It is the rules and regulations that guide fleet operations. The policy will provide clear directions in terms of fleet management, fleet management responsibilities, mode of financing, direction on maintenance, driver management and self drive policy, insurance, de-fleeting and re-fleeting. It will facilitate and encourage accountability, monitoring of…

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There are several factors that portend danger in the performance of a firm. If a  potential corporate lessee comes up with a proposal for a lease transaction, it is  important to properly analyse the books and ensure the following signs are not available before venturing into such business.  These can make the difference between success and failure of a lease transaction.  Some of these factors include: Overtrading – which is a situation whereby a firm takes on more business…

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In other to succeed as a lessor (owner of asset), it is important to identify objections to leasing and find a way to overcome them to win the deal. Some of the most common objections include: Leasing is more expensive The person or entity wants to acquire through cash Leasing is complex The person or entity believes in ownership Non cancelable leases are a concern The person or entity is seeking tax benefits The following suggestions could help in…

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