Financial Leasing is an alternative way of financing whereby a licensed leasing company (the “Lessor’) purchases an asset on behalf of its customer (the “Lessee”) in return for a contractually agreed series of payments which usually include an element of interest. The lessor maintains ownership of the asset while the lessee enjoys the use of the asset for the duration of the lease agreement, usually accompanied by an option to buy the asset at the end of the contract. The lessee bears all costs and risks associated with the use of the leased asset.
Choosing a financial leasing service will avoid a large investment at a time. By extending the payment over the life of the asset, you can offset the cost of equipment with the returns on that investment. In addition, the payment of fixed monthly payments helps balance the expected payables, facilitating capital arrangements.
What is financial lease?
Finance lease is a form of mid and long-term financing via asset leasing under a financial leasing contract. The financial leasing company (lessor) uses its capital to purchase assets required by the lessee and leases such assets to the lessee for their use. The lessee will make lease payment during the lease term under the terms and conditions set out in the lease contract.
Why leasing?
Customer’s merits:
- Be financed up to 100% of asset’s value;
- No need collateral as normal loan;
- Effective utilization and diversification of funds;
- Secure credit limits from banks;
- Flexible lease term;
- Flexible repayment schedule;
- Attractive lease interest;
- Rationalization of administrative work;
- Comprehensive finance solution.
Financial Leasing Products
Finance lease for End-users: Is the finance lease of asset to the customer who will directly use such leased asset to their business.
Customer’s merits:
- Be financed up to 100% of asset’s value
- No need collateral as normal loan
- Effective utilization and diversification of funds
- Secure credit limits from banks
- Flexible lease term
- Flexible repayment schedule
- Attractive lease interest
- Comprehensive finance solution
Sale & Lease-back: Is the activity where BSL purchases the asset owned by the customer then leases such asset to the customer under finance lease contract so that the customer can continue to use such asset for their business.
Customer’s merits:
- Enhance working capital
- Restructure short-term and long-term funds
- Attractive lease interest
Finance lease in co-operation with Supplier: Is the finance lease where BSL co-operates with supplier/distributor of various equipment and machines to provide a financing method (to be the finance lease) to the customers buying their products.
Supplier’s merits:
- Avoid collection risk: supplier does not directly provide credit to their customers, because BSL will make payment of the asset’s price to the supplier
- Expand sales: with additional financing method, supplier can expand their sales to their customers
- Sell products accompanying with value added services: BSL will support supplier to sell products with value added services such as maintenance, etc. as a part of finance lease package
- Retain customer: BSL helps supplier to consult new equipment/ replaced equipment to customer at the time of expiry of lease term
Leased Assets
(Including brand-new and second-hand)
- Transportation means and equipment;
- Construction machines;
- OA office equipment;
- Medical equipment;
- Machine tools/ production lines;
- Others (not prohibited by the law).
Lessee
Legal entities
Lease Term
Depending on the useful life of the asset and the financial condition of the lessee. Usually from 3 to 10 years.
Lease interest
Competitive by either floating or fixed rate depending on the agreement between customer and BSL.
Lease currency
VND
Finance lease application dossier
Legal papers
- Enterprise Registration Certificate
- Company Charter
- Meeting minutes and resolution on appointing management positions of the company
Financial papers
Financial statements of the latest 02 years (showing statements of 03 years), the last quarter, and Notes to financial statements (not compulsory for newly established enterprises)
Investment plan documents
- Meeting minutes and resolution/decision on the selection of finance lease and supplier.
- Business plan for the financial leased asset.
- Asset purchase memorandum with the supplier or the quotation from the supplier.
For further information
Please refer to “BSL Contact” for further discussion with BSL’s salesman.
