Lease Financing

What is Leasing?

Leasing is an innovative way of acquiring vehicles, equipment, machinery or other assets without having to pay the full amount upfront. The basic concept is that the profits are earned through the use and not ownership of the equipment. Leasing is defined as a written contract entered into between a leasing company (called "the Lessor") on the one part and the User of the equipment (called "the Lessee") on the other part whereby the Lessee agrees to pay the Lessor a specified sum of rentals over an obligatory period of time in consideration for the use of capital equipment owned by the Lessor without the Lessee having to purchase or own the equipment.

Why Leasing?

1. Leasing is the quickest mean of obtaining equipment finance without lengthy     and time consuming procedures.
2. Leasing allows conservation of working capital that can be utilized for other     productive business purposes.
3. Fixed and variable rental payments assist in budgeting and ease cash flow.
4. Hedges against inflation as rental payments are made out of future earnings.
5. Lease rentals paid are allowed to be charged as a tax deductible expense in     the profit and loss statement of the lessee.
6. Leasing is acceptable within the Islamic modes of financing as rental     payments are made and interest is not involved.
7. Simplified documentation and personalized service.
8. Lease period can be tailored to match the practical useful life of the     equipment.
9. Up to 90% financing for qualified applicants.

Who Can Lease?

1. Agro Trusts
2. Agricultural Associations
3. Sole proprietorship concerns
4. Partnership firms
5. Private Limited Companies
6. Listed and unlisted local and multinational joint stock companies.
7. Liaison offices of multinationals
8. Foreign mission-resident of Afghanistan.

Which industries/business sectors use leasing?

1. Farmers
2. Growers
3. Agro-Allied Processors
4. Agro-based Manufacturing Industries
5. Consumer Item Manufacturing concerns
6. Services
7. Construction industry
8. Distributors/Traders
9. Self employed professionals
10. Transport
11. Printing and packaging
12. Information Technology

What equipment can be leased?

1. Agricultural equipments including tractors, threshers, trailers and rice husking     machines etc.
2. Plant and machinery
3. Construction and heavy equipment
4. Medical equipment
5. Computers and IT related equipment
6. Office equipment
7. Commercial and private vehicles


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