CHAPTER ONE
INTRODUCTION
1.1
Background of the study
A lease is a legally enforceable
contract which defines the relationship between an owner, the lessor, and a
renter, the lessee. A typical lease spells out all of the terms involved in a
land or merchandise rental agreement, including the length of time a lessee may
use it and what condition it must be in upon return to the lessor. The amount
of payments and any financial penalties for late payments may also be included
in a contract. Most consumers encounter a lease when renting housing or leasing
a car. It can be very short-term (a few weeks or months), or it can be extended
for a number of years. Many small businesses and retail stores have agreements
for 10 years or more, and renewal may just be a formality. Apartment renters,
however, rarely sign a contract extending past one year of occupancy. Those who
lease vehicles usually sign two-year agreements as opposed to five-year
financing plans for buyers. An agreement
protects both the lessor and the lessee. The lessor knows that a legally
binding contract obligates the renter to make regular payments throughout the
life of the lease. The lessee knows that he or she has full rights to the
property without fear of sudden seizure or eviction. A lease also guarantees
that the original rental terms will not change until the contract has expired.
A lease arrangement does not always
guarantee smooth sailing between landlord and tenant, however. Unlike a
mortgage between a bank and homeowner, the contract between landlord and tenant
can contain a number of restrictions. Renters and leasers are not owners,
therefore the property is always subject to scrutiny by the landlord and/or
titled owner. If certain conditions are violated, such as an unauthorized pet
or a sanitation problem, the lessor can decide to terminate the agreement.
Another consideration is the length of
the lease itself. Some renters sign longer leases in order to reduce monthly
payments, only to encounter a more appealing situation long before the end of
the agreement. A lease may allow lessees to legally break the terms if a new
job is located 50 miles away or more, but in general the renter may have to
honor the entire term. Some lessees may find someone willing to continue the
rental obligation without a lease — a practice called subletting. Some
landlords allow tenants to sublet, but it's not always a viable option. The
important thing to understand about a lease is that it is a binding legal
agreement and you should be aware of all the conditions before signing.
A finance lease is a lease that
transfers substantially all the risks and rewards incidental to ownership of an
asset. Title may or may not eventually be transferred. An operating lease is a
lease other than a finance lease. A lease is classified as a finance
lease if it transfers substantially all the risks and rewards incidental to
ownership. A lease is classified as an operating lease if it does not transfer
substantially all the risks and rewards incidental to ownership.
Whether a lease is a finance lease or an operating
lease depends on the substance of the transaction rather than the form of the
contract. The legal form of a finance lease is that the lessor is the legal
owner of the leased asset. The economic substance of a finance lease is that
the lessee has all the benefits and costs associated with ownership of the
asset. The finance lessee is in the same position as it would have been if it
had borrowed money to buy the asset itself. That is why such leases are called
finance leases; they provide finance for the use of an asset. If the lessor includes this term in the lease the lessor
knows that when the asset is given back to it at the end of the lease, the
asset will only have a small value.
Therefore the lessor knows that it needs to make sure to recover the
cost of the asset together with any related interest during the lease term. The
rentals are set at a level which allows it to do this. The lessee will pay the
full cash price of the asset together with related finance expense over the
lease term. The lessee would only do this if it had access to the risks and
benefits of ownership. In substance, this is just like borrowing the cash and
buying the asset. Therefore, the lease is a finance lease.
1.2 Statement
of the problem
Contrary to what obtains in many development nations,
leasing is relatively a new financing option in Nigeria. If we look at the
exiting financing device or option open to small-scale enterprises shows that
small-scale enterprise experience a chronic storage of institutional credit
which ordinarily should form the bulk of their finance. This situation calls
for remedy, and the researcher believes that leasing could be encouraged and
promoted to satisfy to a great extent, the financing needs of small
enterprises.
For
instance in Cross River State, the government has evolved measured to alleviate
poverty through various agricultural projects, upgrading the status of some
markets, providing and developing tourism capacity building, skills acquisition
and empowerment of people. On observation of the entire state, it is discovered
that small businesses are on the increase, ranging from G.S.M operators,
barbing and hairdressing salons, to mention but few. But it is shocking that
their gain are not easily recognized or felt in the economic advancement of the
state.
This can be
attributed to some bottleneck, such as difficulty in accessing micro finances,
inadequate management, lack of experience and skill personnel especially in
compiling a convincing feasibility study and work plan, market competition,
inadequate capital and many other problems (Akakaye, 199:112).
Considerable researches has been conducted
on small-scale industries, but non has been direct at empirically evaluating
their influence in Cross River State, hence their study is undertaken with the
aim of using some of the industries indicators to assess the presence of
small-scale industries in the state and their financing to the small-scale
industries in the state.
THE COMPLETE PROJECT IS CHAPTER 1-5
#4000 ONLY
PAYMENT
PROCEDURE;
BANK: FIRST
BANK
ACCOUNT NAME:
EGBE JOHN EDOGI
ACT NO: 3034851408
GTBANK
ACCOUNT
NAME:
EGBE
JOHN EDOGI
ACT NO: 0122005571
Please after payment send the teller
number and your name the way it appear in the teller to any of the following
phone number:
08037940241
08183133884
egbe4u@gmail.com
You will receive your
material in your email box within 24 hours after payment. Thanks for
doing business with us.
No comments:
Post a Comment