Regional leasing firm, Vehicle and Equipment Leasing Limited (VAELL), has launched Zero Early Return Cost lease program dubbed ‘Time Share’ to help businesses and individuals withstand fluctuating business environment. The lessor becomes the first firm to implement lease break program for SME’s and the broader market in the region and is expected to bring new development to the ordinary lease. The existing lease locks clients throughout the lease period without an exit plan. Many people feel the lease is cost-demanding because you have to pay for the asset even when not using it. The idle equipment turns to be a liability rather than an asset, lowering profit margins. In finance lease you cannot take a break while servicing a loan. When loanee fails to pay the banks the agreed amount they face the risk of their assets being repossessed.
Individuals and institutions which only require assets services during peak seasons fear incurring losses while paying for the asset once the demand goes down. Hence, the new lease will give them an opportunity to lease the asset at a time of demand and return to the lessor after the use. This comes as a sigh of relief to businesses that are seasonal as the product allows clients to return assets until such a time a contract is renewed.
Bertha Mvati, lessor’s MD for Kenya said, “This will provide break options for our clients and follows the new IFRS rules. We have not attached legal demands when a client decides to take a break before the lease maturity. If your business is seasonal, why should we lock you in?”
“This lease program is very flexible and allows clients to end their leases early without penalties. This offer may create substantial equity for our customers,” said Bertha Mvati.
Time Share is designed for companies and individuals to free their leases from financial commitment should their personal circumstances change unexpectedly, for instance if their contract or tender is cancelled suddenly. It enables the lessee to hand the asset back, without the worry of funding the difference between the market value of the vehicle and the outstanding finance settlement amount. Life is full of changes. The chances are that some unforeseen event and challenges resulting in a change to financial situations may happen at some stage during the term of a lease agreement.
“We understand fluctuating business environment and we would like to help our clients. With Time Share, customers get to match their machinery requirement with not only their long term needs but also their short term needs and pay absolutely zero rest lease fees,” she added.
The company is placing vehicles worth more than Kes. 300 million into the program. This program will benefit lessor’s clients in various African countries including Kenya, Uganda, Tanzania, Rwanda and Southern Africa Market.