duly avalised/guaranteed by a local bank acceptable on the forfaiting market while in an ECA-backed financing you have to produce a lot of documentation and lose a lot of your time. Cross-border leasing There is a leasing solution that sometimes buyers located in certain countries would like to have ie importing the machinery on a leasing basis rather than buying it under a sales contract. In many countries the importer of leased equipment obtains various benefits such as delayed and/or reduced custom duties on the equipment imported or accelerated terms for the fiscal depreciation of the machine waving any import licence since no licence is usually required on an equipment imported on a temporary basis. It is however rather difficult for sellers to meet leasing requests from customers as in general leasing companies are unwilling to lease equipment on a cross-border basis due to the political and commercial risks. To solve this problem we have found a way that removes entirely such difficulties allowing the importer to meet their goal ie to get the machine leased and the supplier to collect their price cash upon delivery. What we use in this case is the 'purchase-leasing instrument'. How we do it is quite simple. First of all we arrange that for each rental the lessee issues a promissory note duly avalised/guaranteed by his banker and then once the leased equipment is delivered and installed at the buyer's factory all the promissory notes covering the whole lease period will be discounted on the forfaiting market and the relevant net proceeds paid to the in our case Italian supplier in one lump sum. Copyright ©2011 Wilmington Publishing & Information Ltd 2010, a division of the Wilmington Group PLC. Wilmington Publishing & Information Ltd is a company registered in England & Wales with company number 03368442 GB. Registered office: 19 - 21 Christopher Street, London EC2A 2BS. VAT NO.GB 899 3725 51
duly avalised/guaranteed by a local bank acceptable on the forfaiting market while in an ECA-backed financing you have to produce a lot of documentation and lose a lot of your time. Cross-border leasing There is a leasing solution that sometimes buyers located in certain countries would like to have ie importing the machinery on a leasing basis rather than buying it under a sales contract. In many countries the importer of leased equipment obtains various benefits such as delayed and/or reduced custom duties on the equipment imported or accelerated terms for the fiscal depreciation of the machine waving any import licence since no licence is usually required on an equipment imported on a temporary basis. It is however rather difficult for sellers to meet leasing requests from customers as in general leasing companies are unwilling to lease equipment on a cross-border basis due to the political and commercial risks. To solve this problem we have found a way that removes entirely such difficulties allowing the importer to meet their goal ie to get the machine leased and the supplier to collect their price cash upon delivery. What we use in this case is the 'purchase-leasing instrument'. How we do it is quite simple. First of all we arrange that for each rental the lessee issues a promissory note duly avalised/guaranteed by his banker and then once the leased equipment is delivered and installed at the buyer's factory all the promissory notes covering the whole lease period will be discounted on the forfaiting market and the relevant net proceeds paid to the in our case Italian supplier in one lump sum. Copyright ©2011 Wilmington Publishing & Information Ltd 2010, a division of the Wilmington Group PLC. Wilmington Publishing & Information Ltd is a company registered in England & Wales with company number 03368442 GB. Registered office: 19 - 21 Christopher Street, London EC2A 2BS. VAT NO.GB 899 3725 51
TF_ECA-Finance-v-Forfaiting.docx