Q. How is lease beneficial to a business?

A. Leasing permits maximum conservation of capital which can then be utilized for other business needs; it also preserves existing credit lines from financial institutions for investment in much profitable purposes. Leasing allows the client (lessee) to obtain benefits of taxation since lease rentals are allowable as deductible expenses. Leasing is also acceptable within the Islamic modes of financing due to the concept of rental payment.

Q. How many types of Lease Arrangements do BAL offers?

A. There are two types of lease finance facilities, i.e., Direct Lease and Sale & Lease Back. In the case of direct lease, direct payment is made to the vendor/supplier/indenter for the purchase of asset(s). While in the case of sale and lease back, the client having bought the asset(s) from his own funds may refinance and the payment is made to the client.

Q. How is a lease different as compared to a loan?

A. In leasing, the leased asset itself is considered as a security and in case of loan, additional collateral/security is a mandatory requirement. Further, mortgages takes a lot of processing time in case of loan, while processing in leasing is much faster.