The prospect client selects the asset and finds the supplier and negotiates the price because the lessee has superior understanding of the technical requirements of the asset and his business.
The client could identify existing assets owned by himself, which have already been purchased with own resources for sale and leaseback. A sale and leaseback transaction means that Gulf Lifting buys the assets from the client and leases it back to the lessee.
The lease terms and conditions are negotiated and Gulf Lifting issues a lease proposal specifying the terms and conditions of the offer.
The lessee accepts the proposal, the lessee makes an application to Gulf Lifting for lease facility giving details of the business, its nature and range of products, legal status and ownership profile along with the following documents.
Last three year's financial statements profit and loss account, balance sheets and notes (audited) along with latest management accounts.
Latest six months’ bank statements.
Commercial registration and Articles of Associations or Partnership deed.
Id copies for the owners, partners and authorized signatory.
Gulf Lifting processes the lease transaction, obtains internal credit approval and releases lease documentation, generally consisting of the following documents:
a) Lease agreement b) Draft resolution c) Undertakings
The lessee completes the lease documentation and depending on the terms arranges insurance.
In case the leased asset is being imported, Gulf Lifting may, subject to the terms and conditions agreed assist the lessee in opening letters of credit.
In case of sale and leaseback transaction the agreed sales price is paid to the lessee on successful completion of the documentation.
What is the time frame for a Lease transaction? Gulf Lifting committed itself on customer focus and speed of response. The time required to successfully consummate a lease transaction could range from a few days to a few weeks depending on the complexity, capability, size of the transaction and documentation.
What happens at the end of the Lease term? At the expiry of a lease, several options are normally available to the lessee depending on the nature of lease agreement:
The equipment can be returned to Gulf Lifting.
The lease can be renewed on a yearly basis at a substantially reduced annual cost.
The lessee may purchase the leased asset (at times) at a predetermined price.