Leasing

What is Leasing?

Leasing is a method of finance that grants the tenant the right to use an investment asset owned by the leasing firm in return for rent payments. Ownership is then transferred to the tenant at the end of the contract.

Leasing must be based on a financial leasing contract. In financial leasing, the right to ownership of the asset subject to financial leasing belongs to the lessor (Kuveyt Türk) and the right to use it belongs to the lessee; and the right to ownership is transferred to the lessee at the end of the contract with a transfer fee.

The asset subject to leasing can be procured by a third party in accordance with the request and choice of the lessee. Apart from the procurement of the asset from a third party, the lessor first sells its asset to Kuveyt Türk and then Kuveyt Türk leases the same asset to the lessee (sale and lease back model).

LLeasing plays an important role in increasing productivity and profitability by enabling firms to invest their operating capital in other needs, through the use of leased goods instead of direct purchases.

Why Leasing?

• Thanks to leasing, enterprises can benefit from a longer-term alternative financing method that enables cash flow.
• For all fixed assets made with leasing, the depreciation is set aside by the firm and can be revalued.
• The profit share portion of the paid rent is registered, by the lessee, as an expenditure for the periods which they refer to.
• The cost of the fund may be more attractive than the costs of other financing methods depending on the firm's tax status (if there is a VAT balance to be paid).

Advantages

• The enterprise can benefit from the incentives.
• With the Sale and Lease Back model, the company can make alternative investments with the fund source formed by selling the asset to the lessor (Kuveyt Türk), or it can use that asset with lease back, and can resume ownership at the end of the contract.
• Leasing agreements are exempt from all kinds of fees, duties and taxes.
• At the end of the leasing contract, the lessee is granted ownership rights to the property he rents with a token transfer fee.

Leasing Process

Normal Leasing Process

• Choose the asset you want to rent for investment purposes, and contact our bank.
• Kuveyt Türk will provide you with a payment plan that is suitable for your cash flow.
• If you accept the proposal, you will be asked to submit the proforma invoice, application form and required documents.
• Your leasing application is then evaluated and you receive the evaluation results.
• The leasing contract is signed, and the operation begins.
• The seller delivers the assets to you, and Kuveyt Türk pays the seller.
• You pay your rent during the leasing period, at the end of which you take over the property, if you so wish.

Sell and Lease Back Process

• Choose the asset you desire for the Sell and Lease Back transaction.
• Kuveyt Türk submits a proposal to you to buy and lease back your asset.
• If you accept the proposal, you submit the proforma invoice and required documents.
• Your leasing application is evaluated and you receive the evaluation results.
• The leasing contract is signed, and the operation begins.
• Kuveyt Türk purchases the asset and then leases it back to you.
• You pay your rent during the leasing period, at the end of which you take over the property, if you so wish.

Products Subject to Leasing

According to Financial Leasing Law, movables and real estates can be leased. In general, any property that retains its inherent features, regardless of supporting parts or subsequent add-ons/extensions, may be the subject of a lease contract alone. Apart from these, except for reproduced copies of computer software, intellectual and industrial rights such as patents cannot be subject to financial leasing contracts. You can access many of the products that can be subject to Leasing.