Leasing a Hire Purchase_1478242557648

LEASING AND HIRE PURCHASE LEASING DEFINITION 

Lease is a contract whereby the owner of the asset (lesser) grants to another party (lessee), the exclusive right to use the asset usually for an agreed period of time in written for the payment of rent.

CONCEPT OF LEASING      

Lease finance denotes procurement of assets through lease. The subject of leasing falls in the category of finance. Leasing has grown as a big industry in the U! and U" and spread to other countries during the  present century. #n #ndia, the concept was pioneered in $%&' when first leasing company was set up in adras and the eighties have seen a rapid growth of business. Lease Lease as a concept concept involves involves a contrac contractt whereby whereby ownersh ownership, ip, financing financing and ris taing taing of any e*uipment or asset are separated and shared by two or more parties. Thus, the lesser may finance and lessee may accept ris through the use of it while a third party may own it. !lternatively, the lesser may finance and own it while the lessee enjoys the use of it and bears the ris.

A lease is a contractual agreement in wic!    

! party owing an asset i.e. lessor  +rovides an asset for use to another party i.e. lessee or an agreed period of time i.e. lease period or a consideration i.e. lease rentals.

FEATURES OF LEASING       

- +arties election of an asset +urchase of an asset Use of the asset entals and installments payment ecovering the cost of an asset. /ption of ac*uiring ownership of the asset.

"ar#eting o$ leasing is %one &' $inancing man' #in%s o$ assets to consumers as well as &usiness wic inclu%es!      

+lant and machinery 0usiness cars 1ommercial vehicles !gricultural e*uipments 2otel e*uipments edical and dental e*uipments. Page 1

LEASING AND HIRE PURCHASE  

1omputers including software pacages. /ffice e*uipments etc.

LEASE FINANCING ORGANISATIONS IN INDIA        

 301 +rivate sector manufacturing companies #nfrastructure leasing and financial services ltd. (#L4). #1#1# ban 251 ban  L#1 #ndustrial reconstruction ban of #ndia (#0#). tate industrial investment corporations (##1).

T(PES OF LEASING        

inancial lease /perating lease Leverage lease ale and lease bac  1ross border lease #nternational leasing #mport leasing 1onsumer leasing

"ERITS OF LEASING      

1onvenience in case of short term need.  3o ris of technology /bsolescence. 6fficient maintenance services. Low administrative and transaction cost. 5ebt 6*uity ratio remains unchanged. 0enefits of Tax shield.

DE"ERITS OF LEASING

   

 3o benefit of residual value. 2igh cost of leasing.  3o benefit of ownership.  3ot flexible 1hances of disputes

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LEASING AND HIRE PURCHASE

HIRE PURCHASE 



2ire purchase is a type of instalment credit under which the hire purchaser, called the hirer, agrees to tae the goods on hire at a stated rental, which is inclusive of the repayment of principal as well as interest, with an option to purchase. The ownership or title of the same is transferred only when the last instalment is paid.

FEATURES OF HIRE PURCHASE       

1redit purchase #nstallment payment +ossession at time of agreement /wnership till last installment ight to use goods as a bailer  Termination of the agreement /wnership of goods after all installments payment.

INSTALL"ENT CREDIT 



#nstalment credit, also called #nstalment +lan, or 2ire +urchase +lan in business, credit that is granted on condition of its repayment at regular intervals, or instalments, over a specified period of time until  paid in full. The goods are advanced to the purchaser after maing initial fractional payment called a down  payment.

T(PES OF HIRE PURCHASE!  

1onsumer hire purchase #ndustrial hire purchase

AD)ANTAGES * DISAD)ANTAGES 

AD)ANTAGES  pread the cost of finance.  #nterest free credit.  2igher acceptance rates.  ales  5ebt solutions.

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DISAD)ANTAGES Page 3

LEASING AND HIRE PURCHASE     

+ersonal debt inal payment 0ad credit 1reditor enhancement. epossession rights.

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