ADMINISTRATION

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Browsing ADMINISTRATION by Author "ABBA, SANI YAKUBU"

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    EQUIPMENT LEASE FINANCING NIGERIAN: A COMPARATIVE ANALYSIS OF SELECTED MERCHANT BANKS
    (2014-03-13) ABBA, SANI YAKUBU
    Business not only require resourees (Debt and equity) but the right type of funds to acquire asset- current and fixed, for its day to day operations. Current assets or business asset that have useful value of less than one accounting period, usually one year, are funded with short- term funds- trade credits, current line facilities and overdrafts. Whereas fixed asset arc founded with long term loans. Thus, a mismatch has to be avoided here in funding the assets for effective and efficient management of resources. I Iowever, the high cost of plants, equipment and machineries has denied most economic sectors and companies the traditional form of financing for acquisition of fixed asset. In Nigeria, this sector is affected by the unprecedented depreciation the naira as acquisition of llxed asset become too expensive to finances. To overcome the problem of funding and shortage of capital, firms have resorted to EQUIPMENTS LEASING, Which was in the past associated with Real estate- Land and property. Nowadays, Lease financing encompasses virtually all kinds of fixed assets such as Gcncrat5orcs, aircraft's, ships, Computers, Trawlers, Specialized Equipment and furniture. Leasing therefore provides a methods for financing new investment without the necessity for an immediate large capital outlay. In this respect, it is superior to other forms of international credit. At the expiration of the lease period, the asset so financed under the lease agreement will not pass on to the lessee, but to the lessor who may now exercise discretion whether to further lease it out or dispose it off completely. Lease functions are carried out especially by Merchant Banks, Specialized Institutions and manufacturing companies Leasing therefore is without doubt the creative financing alternative. In the light of the above, this paper will attempt to look at Equipment lease Financing in Nigeria, making a comparative analysis of some selected Merchant Banks