April, 2018
27 April
UNDERSTAND COMPLIANCE ISSUES IN LEASING
The Equipment Leasing Act (the new law on leasing in Nigeria), provides guide on how you must drive your business in a way and manner that does not put you at any form of risk. The compliance issues include: Lessors (owners of asset) shall be a limited liability company with its (MEMAT) having…
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26 April
RED FLAGS IN THE ANALYSIS OF BUSINESS PROPOSALS AND OPERATIONS.
WATCH OUT FOR THESE RED FLAGS IN THE ANALYSIS OF PROSPECTS’ BUSINESS PROPOSAL AND OPERATIONS. Before you finance a lease for a lessee (user of asset), there are several factors that portend danger in the performance of a firm, especially corporate customers.. These can make the difference between success and failure in undertaking a…
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23 April
STRATEGIES TO OVERCOME COMMON OBJECTIONS IN LEASING
It is important for the lessor (owner of asset) to identify objections that may come your way as you prospect for business. Some of the most common objections include: Leasing is more expensive The entity wants to acquire through cash Leasing is complex The entity believes in ownership Non cancelable leases are a concern…
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22 April
INGREDIENTS OF RISK MITIGATION IN LEASING III
Complexity is the degree of sophistication of the asset in terms of engineering design specification, which the lessee must aver to in writing to the lessor that it is operationally appropriate for its business. This reduces the risk of downtimes and the ability to yield revenue targets needed for servicing the lease rentals. In…
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21 April
INGREDIENTS OF RISK MITIGATION IN LEASING II
Capacity is the ability of the lessee to honour his financial obligations to the lessor and other creditors as determined by the assessed viability of the business or intended use of the lease facility. This can be done by appraising the profits which are the main source of funds for servicing the lease rentals…
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20 April
INGREDIENTS OF RISK MITIGATION IN LEASING
In any venture, the question of risk cannot be overlooked in the sense that the investor is taking the chance that the investment might not eventually yield the desired return or the actual cash flow might fall below expectation. Hence, in every investment particularly leasing, risk must be analysed. Risk may be defined here…
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19 April
HOW TO REDUCE WASTAGE ON RESIDUALS
Residual value analysis is a comprehensive process aimed at determining the future value of equipment at specified times during the lease term and at expiration. The issue of residual value is very crucial in leasing. In operating lease for example, the lessor is more likely to rely upon the future value of the leased…
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16 April
HOW TO ARRIVE AT LESSOR’S INTERNAL RATE OF RETURN (IRR)
As a lessor (owner of asset), you have two objectives in arriving at IRR (interest rate) for lease: to be competitive and ensure adequate return to cover all cost and satisfy shareholders. To be competitive, you must always keep abreast of market rates and then attempt to stay within that range. There are two…
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14 April
VARIOUS ASSETS THAT YOU CAN LEASE
As a lessee, it is important to understand that leasing can help you acquire any type of asset you desire. Any asset, cutting across the various sectors of the economy can be gotten through leasing. Whether you desire assets for business or comfort can be acquired through leasing with ease, convenience and flexible payment…
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13 April
UNDERSTAND YOUR RISKS BETTER (PART II)
The assessment of the various risks confronted by a lessor (owner of an asset) continues with these: ADDITIONAL RISK ELEMENTS Several other risks may impact the credit decision but may not be apparent at the time of initial risk assessment. These risks are equally important and need to be fully considered. i. Funding Funding…
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