About Financial leasing
To fulfill the needs and requirements of various segments and groups of clients, Bank of Jordan set up a specialised department that provides finance leasing services and enables customers to finance all types of assets through finance leasing. A specialised team of experienced and highly qualified banking staff was formed to advise customers on the most ideal financing methods that ensure growth, expansion and better productivity of projects in order to yield higher returns and profits.
What is financial leasing:
Basically, finance leasing depends on assets. As such, it is a contract that allows a lessee (client) to utilise a fixed asset of his/her choice and one that fits his/her activity (leased object) against installments agreed upon during a certain specific period of time. The installments are paid to the bank (lessor) on the understanding that the ownership of the leased object will be transferred to the lessee automatically at the end of the contract or upon the lessee paying a certain amount of money upon the end of the contract.
Advantages of financial leasing:
- Finance leasing is a finance tool that allows financing of all fixed assets without a ceiling and with minimum guarantees as the basic security is the asset and the economic feasibility.
- The leasing period corresponds with the productivity life of the leased asset. Also the leasing installment is flexible.
- Encourages continued modernisation of assets to keep up with technological advancements.
- A financing tool that suits clients who do not prefer using traditional financing methods.
- Possibility of 100 per cent financing.
- Selling and then finance leasing whereby the client sells a fixed assets he or she owns (car, truck, production line) to the bank which, in turn, leases the same asset to him or her. This way, the client can collect a sum of cash to finance other assets or other operations like purchasing raw materials or paying rents.
- Possibility of adding maintenance costs, comprehensive insurance and any other expenses to the leasing installment.
- Transferring the leasing contract by the lessor and the lessee to another party.
Beneficiaries from financail leasing services:
- All institutions, companies and factories of any legal form.
- Entrepreneurs of various vocations and owners of established or new industries.
- Employees, doctors, lawyers and engineers.
- Owners of trucks, fork-lifts and bulldozers as well as transport and shipping entities.
- All production industries and projects of various types.
Parties of finance leasing
1) The lessor: Bank of Jordan/Finance Leasing Department provides the financing to the lessee to buy the asset and register it in the name of the lessor. The lessor could be a company that owns the asset and leases it as financing to the lessee.
2) The lessee: The party that uses the asset and owns it at the end of the period.
3) The asset: A property, desired from utilisation and for leasing, used by a lessee. Assets are: (cars, buses, trucks, equipment, production lines, machinery, office and medical equipment items and real estate).
4) Leasing installment: An amount paid by the lessee in exchange for benefiting from an asset. The sum is determined in advance so as to correspond with the cash flow of the lessee .
