Finance Lease is a credit facility where LLFC (lessor) acquires fixed assets based on the requirements/needs of the client (lessee) which are then leased by the client (Lessee) from LLFC (Lessor) through payment of periodic lease amortization. The benefits and risks of ownership of the assets are transferred to the lessee at the end of the term
This facility allows enterprises to acquire equipment, motor vehicle, lot and building and other equipment, to expand, upgrade or modernize their operations. It also enables enterprises to match financing terms with the earning potential of the capital asset, preserve working capital and credit lines and address existing or current budget limitation.
Operating Lease is a credit facility where the client (lessee) makes rental payments to LLFC (lessor) for the use of an asset over a fixed period (normally, more than a year). Under the facility, LLFC retains the benefits and risk of ownership of the leased asset. At the end of the lease term, the lessee may opt to renew the lease, purchase the asset at its fair market value or return the asset to LLFC.