Blog

BENEFITS OF VENDOR LEASING ARRANGEMENT
March 6, 2018
| No Comments
| Lease Marketing

The term vendor leasing refers to any programme in which an equipment manufacturer, distributor, dealer or  makes use of leasing as a means of selling its products. Vendor leasing, sometimes called “Sales aid Leasing” can be divided into two forms: i. Captive lessors – is when the manufacturer/dealer decides to establish a wholly –owned subsidiary to offer lease finance directly to customer ii. Third-party lessor – is when the lease is handled by an independent leasing company.   Third party lease…

Read More

WHY WOULD YOU INVEST IN LEASING BUSINESS?
March 5, 2018
| No Comments
| Lease Advice

Just like there are advantages of leasing to a lessee (the user of an asset), so are there benefits of leasing to a lessor (owner of an asset).  The factors that encourage a lessor to provide leasing facilities include: Leasing widens the market for a manufacturer/dealer of equipment. Thus, a manufacturer/dealer can offer lease arrangement without necessarily investing additional capital. Lease rental income received periodically is easily predicted on which future cash flow projections can be made for planning…

Read More

6 WAYS TO MITIGATE RISKS IN LEASING
March 2, 2018
| No Comments
| Lease Advice

Lease structuring is done after the lessor has established the risk profile of a particular transaction. Sometimes the lessor might not be sufficiently certain that the lessee will meet his rentals as they fall due. To overcome this uncertainty, it may be necessary to require some form of credit enhancement. However, credit enhancement should not be the reason for entering into a lease with what otherwise would be unsatisfactory lessee. The following techniques are used to compensate for increased…

Read More

TIPS ON ASSET MANAGEMENT (Continued)
March 1, 2018
| No Comments
| Best Practices

Asset Register: maintenance of an up to date register of leased assets is very vital to the management of the lease portfolio. The asset register is better maintained by a computer program and should contain information such as name of the leased asset, serial number, tag number, location of the asset, name of lessee, servicing date, commencement date, terms of lease, cost of equipment, residual value. The purpose is to enable you to keep track of all the leased…

Read More

TIPS ON ASSET MANAGEMENT
February 28, 2018
| No Comments
| Best Practices

Apart from checking the standing of the lessee, you also have the responsibility of ensuring that the asset under lease is well managed. This is fundamental to the overall achievement of your business objective, because the lessee will only be motivated to pay if the asset under lease is in existence and functional. The fact that you have little or no control on the usage of the equipment makes this task difficult. These include: Maintenance of Lessor’s Legal Right:…

Read More

TECHNIQUES TO HELP STRUCTURE OFF BALANCE SHEET FINANCING
February 27, 2018
| No Comments
| Best Practices

In the course of your operations, if a lessee insists on off balance sheet financing, you must first of all ensure that the lease does not meet any of the 5 criteria including: i. Automatic ownership transfer ii. Bargain purchase option iii. Lease term equal to or greater that 75% of the asset’s economic life iv. Present Value of minimum lease payments equal to or greater than 90% of equipment cost v. Special purpose equipment vi. Techniques to achieve…

Read More

STEPS INVOLVED IN MONITORING YOUR LEASES
February 27, 2018
| No Comments
| Best Practices

When servicing your customers, there are series of activities that you must perform to ensure that you are monitoring your investments. From the beginning of the lease to termination, these activities must be well coordinated, to ensure that the transaction is managed efficiently and effectively in line with the agreements reached between the parties. i.  Regular visit to the lessee – regular visit to lessee at his premises will give you first hand information on the ongoing performance of…

Read More

HOW TO COUNTER COMMON OBJECTIONS IN LEASING
February 25, 2018
| No Comments
| Best Practices, Poor Practices

It is not uncommon in the course of marketing your leasing business, whereby you come across stiff objections from prospective lessees, either real or perceived. This equally applies to all types of business. More importantly, you should know how to counter each objection keeping in mind that real objections do not really have a counter. You need to learn how to dance around them. The list of common objections to leasing includes: i. Leasing is more expensive ii. The…

Read More

HOW EQUITY CONTRIBUTION CAN IMPLICATE YOUR BUSINESS
February 24, 2018
| No Comments
| Poor Practices

It has become imperative to bring to the fur the negative impact of equity contributions in leasing transactions and to alert you of its consequences on your investment. Perhaps to have the commitment of the customer, many lessors ask for equity contribution from the customer, while this is not illegal, it connotes a different transaction entirely, which is not leasing.  By its legal nature, leasing does not envisage any proprietary right on the lessee during the entire duration of…

Read More

FACTORS TO CONSIDER BEFORE FINANCING AN ASSET
February 23, 2018
| No Comments
| Lease Advice

As a lessor, there are certain factors you need to put into consideration before you finance any asset. This will enable you determine whether an asset is worth financing or not and thereby enhance your profitability. They include: What is the purpose for the lease? Does the lessee have sufficient cash flow to make payment? Does the lessee have sufficient capital to provide a financial cushion in times of stress? Does the owner provide support for the company and…

Read More

© 2025 Equipment Leasing Association of Nigeria. All Rights Reserved