Have you heard about rent or lease? It is an agreement between two parties where one party rents and other takes possession for an agreed period.Landlord and tenants sign lease agreements while renting property. Companies do that all the time to raise funds. It is called as Lease Financing. It is one of the most interesting sources of finance. Let’s learn more about it.
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")}}}var a="universalclick",l="onDotClick";"mouseenter"===this.parameters.action?(a="universalenter",l="onDotHover"):this.slider.hasTouch()&&(a="n2click"),this.dots=this.scroller.find(".nextend-thumbnail-scroller-group > div").on(a,this[l].bind(this)),this.images=this.dots.find(".n2-ss-thumb-image")},t.prototype.onTap=function(t){i||(d(t.target).trigger("n2click"),i=!0,setTimeout(function(){i=!1},500))},t.prototype.onBeforeShow=function(){var t=!1;switch(this.parameters.area){case 5:t="left";break;case 8:t="right"}t&&(this.offset=parseFloat(this.$widget.data("offset")),this.slider.responsive.addHorizontalSpacingControl(t,this)),this.renderThumbnails(),this.slider.hasTouch()&&(N2Classes.EventBurrito(this.$widget.get(0),{mouse:!0,axis:"x",start:function(){this.bar.width();this._touch={start:parseInt(this.scroller.css(n2const.rtl.left)),max:0},this.getScrollerWidth()A lease is a contractual agreement whereby one party that is the owner of an asset grants the other party the right to use the asset in return for a periodic payment. In simpler terms, leasing is renting an asset of the company for a specified period. The ‘lessor’ is the owner of the party and the ‘lessee’ is the party that uses the assets. The lessee pays a fixed periodic amount called ‘lease rental’ to the lessor for the use of the asset.
Lease contract mentions the terms and conditions involving lease arrangement.. The asset is returned to the lessor at the end of lease period. Leasing is more widespread in the acquisition of assets as computers and electronic equipment which become obsolete quicker be of rapid development in technology in the sector. It is very important while making the leasing decision to compare the cost of leasing the asset with the cost of owning the same.
The deposits that are raised by organizations directly from the public are known as public deposits. Companies offer higher rates of interest offered on public deposits are usually than that offered on bank deposits. Any person who prefers depositing money in an organization does so by filling up a prescribed form. The organization in return issues a deposit receipt as an acknowledgement of the debt. Public deposits take care of both medium and short-term financial requirements of a business.
As the depositors receive higher interest rate than that offered by banks, the cost of deposits to the company is less than the cost of borrowings from banks. The deposits are profitable to both the depositor as well as to the organization. Companies generally invite public deposits for a period up to three years. The acceptance of public deposits is regulated by the Reserve Bank of India.
Q: Under the lease agreement, the lessee gets the right to
(a) Share profits earned
(b) Participate in the by the lessor management of the organisation
(c) Use the asset for a specific time
(d) Sell the assets specified period
Q: Discuss the limitations of public deposits.
Answer:Newborn companies find it difficult to obtain funds through public deposits. Also, it is an untimely source of finance as the public may not respond when the company needs money. Collection of public deposits may prove difficult, particularly when the size of deposits required is large.
