Posts Tagged ‘financial institution’
Concept Leasing
Leasing or lease, a lease with purchase option, by which a person or company (lessee or user) requests a bank, financial institution or leasing company (lessor) who acquires ownership of property (generally machinery), so that later he will dispose of its use in exchange for periodic rental payments (lease it) for a specified period and in which, once completed, will have the option to buy the property.
In the leasing contract is to report the following:
- Lessee or user: person or company that will use the property in exchange for the payment of periodic installments to the lessor for the duration of the contract, and that once completed this period, you will have the option to buy the property.
- Landlord: bank, financial institution or leasing company that at the request of the lessee acquires ownership of a particular good from a particular supplier, then lease it to the tenant.
- Provider: company to which the landlord is going to buy the property.
- Well, leased fixed assets usually consist of machinery or equipment.
- Canon: amount of rent payable by the tenant. To determine this amount, taking into account the cost of acquisition of property, interest on investment and the commission may charge the leasing company.
Sources of Financing for a Company
One of the functions of finance in a company, is to seek funding.
This search for funding is given basically for two reasons:
- When the company is lack of necessary liquidity to meet daily operations, for example, when you need to pay the debts or obligations, buy supplies, maintain inventory, pay salaries, rent the premises, etc..
- When the company wants to grow or expand, and does not have sufficient equity capital to meet the investment, for example, when you want to buy new equipment, when you want to have more teams, get more goods or raw material for increase the volume of production, enter new markets, develop or launch a new product, expand the local, open new branches, etc..
Let’s look at what are the main sources of funding for what we can in search of money or funding that we may need to continue operating as a company, or to invest and make it grow:
Applying for a Loan from a Bank or Financial Institution
Whether you need money to deal with daily operations, or to invest in growing our business, the most common way to get that money, is requesting a loan from a bank or any financial institution.
To request a credit or loan from a bank or financial institution, we must first determine what amount we’re going to apply, and analyze in a first instance if we are able to pay that amount.
Second, we must evaluate the various financial deals that exist, taking into account the loan amount, term and each bid costs (fees and commissions).
At this point we must bear in mind that the interest rate indicated banks or financial institutions is often not actually the only cost to pay for the loan, but there are usually other costs not mentioned in the first instance, such as maintenance fees.
In evaluating the various financial deals, we must also take into account the bank or financial institution itself, that is, regardless of their reputation, their attention quickly to assess your application and to give us the loan, etc..
How to Choose The Business Credit Indicated
Once we have convinced ourselves that we need a business credit, and we have ensured in the first instance that we are able to repay the loan, now is the time to evaluate and compare the different banks or financial institutions that we can provide The credit required, and different financial products they offer.
In addition to the amount and requirements or conditions that may apply, the factors or criteria should take into account when deciding on the most suitable financial offer are:
The cost of borrowing
Before taking into account the interest rate offered by banks or financial institutions, which in reality we must take into account is the total cost of financing (known as total financial cost or actual cost), which is formed by the rate interest, plus other costs normally included in the loan, such as the costs of issuance or maintenance.