Leasing Solutions

  • At times when a company requires to raise capital, they may be need to offload assets from their balance sheet so that the chargeable depreciation is not considered.
  • When depreciation is taken off the P/L statement, it affects the EBIDTA positively and the company can present better profitability.
  • MSMEs with small balance sheets needs to keep high depreciation assets off their balance sheet which helps them to achieve better numbers.
  • In such cases, a lease can be taken up for items like IT Equipments, Windpower Equipments, Machinery, Company Vehicles and others, which are items with higher depreciation.
  • Since the debt is not shown on the balance sheet the leverage ratio also is better.

BENEFITS

  • Balanced Cash Outflow: The biggest advantage of leasing is that cash outflow or payments related to leasing are spread out over several years, hence saving the burden of one-time significant cash payment.  This helps a business to maintain a steady cash-flow profile.
  • Quality Assets: While leasing an asset, the ownership of the asset still lies with the lessor whereas the lessee just pays the rental expense. Given this agreement, it becomes plausible for a business to invest in good quality assets, which might look unaffordable or expensive otherwise.
  • Better usage of capital: Given that a company chooses to lease over investing in an asset by purchasing, it releases capital for the business to fund its other capital needs or to save money for a better capital investment decision.
  • Tax Benefits: Leasing expense or lease payments are considered as operating expenses, and hence, are tax deductible. A company saves tax on the lease rental paid as with an operating lease, all rentals (Principal + Interest) are expensed off whereas in loan only interest portion is expensed off.

INTEREST RATE

  • Interest rates for Leasing Solutions are usually in the range of 12.5%

Proof of Identity

  • Pan Card

Proof of Address

  • Electricity bill
  • Telephone bill
  • Latest property tax receipt
  • Passport
  • Voter id card
  • Company Pan card
  • Proof Of Address - Registered
  • Proof Of Address - Corporate
  • Proof Of Address - Factory/Unit/Plant/Shop

In case of Company

  • Articles of Association
  • Memorandum of Association
  • Certificate of Incorporation

In case of Partnership

  • Certification of registration of firm with the registrar of firms and societies

In case of MSME unit

  • Certificate of registration with District Industry centre (Compulsory for medium MSME)

In case of SSI unit

  • SSI registration number/SIA SEK No.
  • Brief profile of the Group / Parent company and Associate / subsidiary companies together with brief financials, if applicable.
  • Current major orders/projects in hand (Share a few contract copies).
  • Details on the equipment required i.e. supplier, model, utility, etc.
  • Last 3 years audit report & audited financials
  • Business Continuity proof - 3 years ITR
  • Debtors ageing list
  • Last 6 months bank statement
  • Loan statement with sanction letter
  • Financial projections, if applicable
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