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First Leasing Bank is a proven financing partner offering a wide range of solutions in selected markets. We have proven expertise in understanding both localized and global requirements and provide creative financing solutions and programmes that deliver top and bottom line benefits to our vendor partners, their distributors, dealers and end users. The Bank actively manages the lease portfolio and helps to maximize the residual value of the operating lease by remaining in contact with the lessee. By understanding the lessee’s business and asset plan, First Leasing Bank is ready to facilitate a midterm upgrade, negotiate a purchase or renewal at End-of-Term, or move the asset quickly back to the manufacturer or to the used equipment market. Finance Lease : A lease which is really an installment purchase or hire purchase with the advantages of a lease transaction. Although the title to the asset passes to the lessee at the end of the lease, the lessee always retains the risks and rewards of ownership. As such, the lessee shows the asset and liability on their balance sheet and takes depreciation. Also known as a capital lease or ijara wa iqtina. Operating Lease : A lease in which a lessee can acquire the use of equipment for a tenor that is less than the equipment’s useful life (a long term rental). The lessor does not recover the total asset value during the lease but will recover the residual value by either selling or releasing the asset in the second-hand market, thus lowering the lessee’s payments. The lessee returns the asset at the end of the term, although most leases provide the lessee with a purchase and lease extension option. The lessee expenses the rental payments and the asset does not appear in the financial statements (‘off balance sheet financing’). Also known as ijara. Project or Trade Financing : A contract made with a manufacturer, under which that manufacturer undertakes to make an item on certain conditions and specifications. The lessor pays the manufacturer, often using benchmarks and progress payments, and then resells or leases the completed asset(s) to the client. Also known as istisna. Sale Leaseback : Transaction where one party sells its equipment to another and immediately leases the same equipment back. Vendor Programme : A working relationship between a lessor and a vendor whereby the lessor provides financing to the vendor’s customers. The vendor program substitutes as the captive finance company of a manufacturer or dealer-distributor in order to stimulate sales. Also known as vendor leasing. |
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