Financial leasing as a source of finance in the Maltese corporate sector : an evaluation

Abstract

"Financial Leasing is a transaction in which, plant, capital goods or other equipment are acquired by a prospective lessor, on specifications provided by the prospective lessee and on terms approved by that party in so far as they concern its interests, from a supplier and leased to that lessee by the lessor in return for the payment of rentals" A Finance Lease is a lease which requires the lessee (user) to remit payment of the rentals which total the cost of the asset plus the lessor's (the owner of the asset) required profit. It: • is non-cancellable • requires the lessee to pay all taxes and other assessments • requires the lessee to provide insurance and maintain the asset according to manufacturer's guidelines. • is anticipated that the lessee will acquire title to the asset at the conclusion of the lease term. As leasing is now gaining ground in a wide area of Europe it's important role in promoting capital is being realised. Leasing companies have provided inestimable relief to the manufacturing industry at a time of economic stress.