Lease Financing from banks is basically a facility provided by banks to the customer for purchasing Capital Machinery, Medical Equipment/Instruments, Heavy Construction Equipment, General Equipment, AC, Lift, Generator, Vehicle, Car, Covered Van etc. with a fixed Down payment for specific periods of time minimum 03 years to maximum 07 Years. Lease finance facility from banks are provided both for individual and for organization who has the capacity to repay the loan. Lease Finance has become a popular scheme for businessman and induvial for purchasing Car or personal vehicles. Today I’m going to tell you about the details of the Lease Financing Scheme Provided by Banks.
Key Products for Lease Finance from Banks:
- Capital Machinery for Industrial Units.
- Capital machinery for BMRE (Balancing, Modernization, Rehabilitation and Expansion) of the existing projects.
- Medical Equipment/Instruments.
- Heavy Construction equipment.
- General Equipment, AC, Lift, Generator, Car, Covered Van etc.
- Vehicles like Car, Bus, Mini Bus, Microbus, Truck, Covered Van, Cargo Vessel (Inland/Ocean going), Dredger, CNG driven Three Wheelers auto rickshaw, Motor Bike, Road Roller, Excavator, Forklift, Oil Tanker(lorry/Vessel) ETC.
- Other as per banks discretion.
Read Also: How to get Car Loan in Bangladesh?
Who Can Apply for a Lease Financing from Banks?
Any Bangladeshi citizen or organization who are able to pay back the bank loan can apply for this facility. Precisely, salaried executives, Government officials, Executives working in reputed NGOs (Non-Government Organizations), international aid agencies & UN bodies, any businessmen or employed/self-employed individual government taxpayers who have a reliable income source. Other eligibilities are;
For Businessman,
- Having ongoing business concerns.
- At least 02 years of flawless business history. (May vary from bank to bank)
- Must have an Account in the Business name.
- Age 21-60. (May vary from bank to bank)
Salaried Executives,
- Must be a confirmed employee having service length of 02(Two)years.
- Must have an account with the bank.
- Age 21-60. (May vary from bank to bank)
Down payment Percentage: (May vary from bank to bank)
Banks are allowing minimum of 30% book value of the desired product in case of organization and 20-25% for the individual.
Securities:
- Registered mortgage of Land & Building.
- Personal Guarantee of the borrower, one guarantor and spouse.
- FDR and Pledge can be treated as security.
- Bank/Insurance guarantee.
- Every Director/Owner guarantee for Company.
- In case of Group of Company Corporate Guarantee is necessary.
- Other securities acceptable to the Bank.
- Fully prepared cheque equal to loan period.
Tenure of Lease Financing Scheme from Banks:
| Sl. No | Lease Items | Tenure (Excluding Grace Period) |
|---|---|---|
| 01. | Capital Machinery(imported/local), Digital Color Lab, CNG refueling Machinery etc. | Maximum 05 Years |
| 02. | Medical Equipment/Instruments for Hospital/Doctor’s Chamber/Clinic etc. | Maximum 07 Years |
| 03. | Air Conditioner, Lift, Standby Generator, Gas Generator etc. | Maximum 05 Years |
| 04. | Telecommunication Equipment/Machinery, VOIP Equipment/Machinery etc. | Maximum 07 Years |
| 05. | Vehicles like Car, Bus, Mini Bus, Microbus, Truck, Covered Van, Cargo Vessel(inland/oceangoing), Dredger, CNG driven three wheelers autorickshaw, Motorbike, Road Roller, Excavator, Forklift, Oil Tanker(lorry/vessel) etc. | Maximum 05 Years |
| 06. | Elevator/Escalator, Central Air-Conditioning System, Office Equipment, Computer (in large scale), Solar Panel (for user level), Wheel Loader, Pay Loader, Trailer/Semi Trailer, Crane, Bulldozer, Scrapper, Soil Stabilizer, Mixer Lorry, Stone-Crusher etc. and other eligible such items can be considered if the bank management deems them fit. | Maximum 05 Years |
Repayment Method:
Monthly repayment started from the next month of Loan Disbursement. Your account will be automatically debited by the bank by using your deposited cheque as security. You have to deposit the rental amount to your maintained account with the bank. Monthly rental is decided by the respective bank.
Bank Interest:
The present rate of Interest for all loans is 09.00%. Penal interest may charge @ 2% over the fixed rate on the defaulted installments.
Disbursement Mode:
Loan disbursement may be made by the bank as Pay Order of the sanctioned amount and paid to the vendor.
Fees and Charges:
Fees and Charges applied by the Bank in the form of;1) CIB Inquiry fee.
2) Loan Application Fee.
3) Loan Processing Fee.
4) Risk fund
5) Supervision fee
6) Project examination fee
7) Transfer fee
8) Contact Point Verification fee.
9) Charges Document Fee.
10) Legal Opinion Fee.
11) Other as banks discretion.
Basic Documents Requirement(s) for getting Lease Financing from Banks:
1. National ID Card/ Passport/Driving license of applicant, Guarantor and Spouse Guarantor. (Passport is not allowed for CIB)
2. Recent color photograph of applicant, Guarantor and Spouse Guarantor.
3. Quotation of the product. Quotation price should be competitive and satisfactory to the Bank.
- In case of Brand new/Reconditioned machinery/equipment are (if Used, to be mentioned whether used in Bangladesh or in abroad) along with related Documents.
· Whether Reconditioned/Used machinery, Economic life certificate to be obtained from the Supplier/Inventor (if it is not mentioned in import documents)/Reputed Inspection Company.
4. Business card or
In case of salaried executives;
- Letter of appointment.
- Letter of joining.
- Letter of Confirmation/Permanency. (If any)
- Salary Certificate. (Recent)
- Employee ID.
5. Copy of TIN related documents.
6. Trade license for the last Three years/MOA for Businessmen.
7. Drug license for Medicine business.
8. Bank Statement for last 6 months. (If owner in his/her own name or name of the firm availed loan from other bank loan statements from the beginning to up to date along with loan sanction advice.)
9. Copy of house ownership and in case of rent house, rent agreement from landlord.
10. Utility bill copy for the proof of address.
11. For mortgaging property, have to submit all land related documents to the Bank.
12. BSTI Certificate for the food production industry.
13. Approval of DC office for Diesel, Acid business.
14. Certificate from Petro Bangla for Diesel, Octane Business.
15. VAT certificate. (If applicable)
16. Employee details.
17. Stock List.
18. Payable and Receivable list.
19. Balance for the last three years.
20. IRC & IRE certificate for Export-Import Business.
21. Net worth Details.
22. Profit Loss Statement of last three years.
23. Partnership deeds registered from Joint Stock Company and Notary Public for Partnership Business along with a resolution from partners.
24. For Limited Company Certificate of Incorporation and Articles of Association, Memorandum of Association & Board Resolution, List of Directors with Particulars, Form X & Form XII (if any change in Directorship).
After scrutinizing the related documents, the bank sanctioned the proposal for lease finance. Then a lease agreement is executed between the customer and the bank. At that point the bank will purchase the particular item for the customer and payment is also made by the bank to the vendor. The customer will be under obligation to accept the appliances for the specified lease period accepted by the customer and the bank. It is to be mentioned that till the end of the loan period the purchased product owner is the respective bank. After successful completion of the Loan ownership is transferred to the name of the borrower.