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Leasing is the creative financing alternative of today because it meets diverse needs. A lease is an agreement whereby the lessor (owner of equipment) convey to the lessee (user of equipment) the right to use the asset for an agreed period of time, in return for a payment or series of payments. Below are the reasons why this is so Alternative source of capital financing: Leasing  provides an alternate source of financing where a company is faced with tight…

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  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. The following Cs are meant to guide the lessor in risk analysis. 1. Confirmation which is the ability of the lessor to obtain and confirm information supplied by the…

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­Equity contribution and purchase options are common features in lease transactions, In case of equity contribution the intention mainly, is to get the commitment of the lessee while for purchase option is to achieve the true intention in finance lease of the lessee becoming owner of the asset at the end of the lease. Many transactions have scaled through without any issue relating to these. However, the sore point will manifest when there are disputes especially on repossession. Equity contribution…

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Secured Transaction, Collateral Registry and Leasing In 2017, the Secured Transaction in Movable Assets Act was enacted to encourage the use of movable assets as collateral for a loan. This is part of Government’s efforts to enhance access to finance especially to SMEs and financial inclusion The Act applies to all securities in movable assets created by an agreement that secures payment or the performance of an obligation and all public registries on movable assets are expected to be…

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