The participants in a lease deal

In general, there are four parties in a lease deal:

The lessor – a leasing company that acquires property from a seller (equipment, vehicles etc.) and provides it as a lease asset to a lessee in exchange for payment in accordance with the terms of a lease agreement, for a certain period of time and under certain conditions for temporary possession and use.

The lessee – this is you, a private entrepreneur or business that receives the leased asset from the leasing company under a lease agreement for a certain period of time and under certain conditions for temporary possession and use for business purposes.

The seller – this is the supplier of the equipment or an automobile dealer who signs a contract with the lessor to supply the latter with the asset chosen by you by an agreed time and under certain conditions. The seller delivers the lease asset to the lessor or the lessee under a purchase and sale agreement between the seller and the lessor.

The insurer – this is an insurance company that, as a rule, is a partner of the lessor or the lessee. This company participates in the lease deal by insuring property, transport and other types of risks connected with the leased asset and/or the lease deal.

How does leasing works and how accessible is it?

Introduction

It all starts with a telephone call to the lease company. During this short telephone interview the client receives answers to the questions about his project and the acquisition of equipment, vehicles or about leasing in general.

Agreeing leasing conditions

After the initial telephone call, it’s time to fill out an application, containing the information about the client’s company: type of activity, registration information, contact details and a short description of the leasing project. This information is important for making the first decision about the possibility of financing of this or that project.

Registration

After agreeing the lease terms, the lease company asks a client to provide a limited number of documents (by-laws, certificate of state registration), which will take one or three days to check. Then all the necessary agreements will be drawn up between the four parties: the lessor, the lessee, the seller and the insurer.

Signing leasing agreements

During the deal, after the lessor and lessee sign a contract, the former acquires the leased asset (equipment, vehicles) indicated by the client. The purchase and sale agreement for the leased asset signed by the lease company and the supplier details the obligations of the latter to supply the equipment by the certain date, its price and payment terms, its quality and contents, supply and installation obligations.

Delivery of the leased asset

The leased asset is generally delivered directly to the client, while the lease company receives it from the seller and hands it over to the client to be used in accordance with the lease agreement. From the moment the leased asset is handed over to the client, he is responsible for its safekeeping, maintenance and upkeep.

Insurance of the leased asset

At a fixed date the lessee insures the leased asset against a range of property risks.

Realization of the project

During the term of the lease agreement the lease company retains the title for the leased asset, and the client uses the asset and makes monthly lease payments. In the event of the client not making a payment scheduled in the lease agreement, the lessor has the right to recover his property and sell it on the secondary market. If the client makes lease payments on schedule, the title is transferred to him after the final lease payment. All revenue and profit received by the client from the use of the leased asset is the property of the client.