Leasing is a financial arrangement where one party (the lessee) pays another party (the lessor) for the use of an asset over a specified period. This arrangement allows the lessee to use the asset without owning it, making it a popular choice for businesses and individuals who need equipment, vehicles, or property without the large upfront cost of purchasing them.
Finding the right transport, machinery, or equipment for your business is essential for smooth operations and growth. However, the lease application process for these critical assets can be demanding. A clear understanding of each step, from application submission to finalizing the lease agreement, is necessary to navigate this process successfully. Proper preparation, including organizing a strong application, can significantly enhance your chances of approval.
Our article aims to simplify the lease application journey, providing a comprehensive roadmap to help businesses secure the essential assets they need efficiently and effectively.
Lease Application Process: Bank, Seller, and Customer Triangle
The lease application process for transport, machinery, or equipment generally involves several key steps, with interactions among the bank, the seller, and the customer:
- Asset selection: s a first step in the process, a customer has to select asset seller or manufacturer and agree on production and delivery terms.
- Application Submission: The customer submits a detailed lease application to the bank. This includes essential information about their business and the specific assets they wish to lease.
- Reference Checks: The bank may conduct reference checks to verify the credibility and reliability of the asset seller.
- Credit Review: The bank performs a detailed credit review to assess the financial health and creditworthiness of the customer’s business. This helps the bank determine the risk associated with leasing to the customer.
- Lease Negotiation: The bank and customer negotiate and agree on leasing terms such as lease duration, price of financing, or any other additional conditions.
- Signing: Once all terms are agreed upon, the final lease agreement is prepared and signed by the bank and the customer, making it a legally binding contract. The seller is typically involved to ensure the proper transfer of the asset to the customer.
Preparing Your Lease Application
Preparing a strong lease application is crucial to securing the desired assets. Here are the essential documents typically required:
- Legal documents: first bank will ask to provide necessary legal documentation to perform KYC and onboarding
- Financial Statements: in order make credit assessment bank will ask to provide financial statements as well different details about your business activities and financials.
- References: Letters from previous suppliers can strengthen your application by vouching for your credibility.
Presenting accurate and complete information is essential to avoid delays and strengthen your application. Here are some tips for gathering and organizing your application materials effectively:
Create a checklist of required documents to ensure nothing is missed. (You can check How to Apply for Leasing)
Understanding Key Lease Terms
Familiarizing yourself with crucial lease terms will help you make informed decisions. Here are some key terms to understand:
- Lease Amount: The total cost of leasing the asset, including any additional fees.
- Lease Term: The duration of the lease agreement.
- Down payment: it is an upfront payment, required to participate in the investment by customer’s own funds.
- Interest rate: price paid of financing and usually is expressed by annual percentage rate.
Tailoring the Lease to Your Needs
Leases can often be tailored to better fit your business requirements, ensuring that the terms align with your operational and financial goals. Key aspects to consider include adjusting payment schedules, such as negotiating monthly, quarterly, or annual payments based on your cash flow and possibly deferring initial payments to ease the financial burden.
How Can EMBank Help?
t EMBank, we offer comprehensive leasing solutions for transport, machinery, and equipment, tailored to meet your business needs. Our leasing products are designed to provide flexibility and support, ensuring you have access to the essential assets required for your operations. With customized leasing plans, EMBank helps you streamline the acquisition process, optimize resource allocation, and secure the tools necessary for sustained growth and success.
t EMBank, the loan is repaid in instalments seasonal, quarterly, monthly or mixed in line with schedule. The beginning of the loan’s repayment can be postponed until 3 months.
To get more information about leasing conditions, please check this page for further details: https://em.bank/businesses/lending/leasing/
Please keep in mind that the above information has been prepared or assembled by the EMBank and is intended for informational purposes only. Some of the information may be dated and may not reflect the most current legal developments.
For further information and support, please send an e-mail to [email protected]
