Finance Leases

About Finance Leases

When customers introduce machinery and equipment from manufacturers or dealers handling these items, SMFL purchases these items on behalf of the customers and then leases these to the customer. Lease rents paid during the term of the lease agreement are generally the sum of the purchase cost of the item, payments for interest incurred during the term of the lease, fixed asset taxes on the item, and the insurance premiun on the items.

Comparison of Lease, Rental, and Installment sales Arrangements

The following table presents a comparison by principal characteristics of lease, rental, and installment sales.

  Leases Rental Installment sales
Applicable items All types of machinery and equipment Specific types of general-purpose machinery (such as PCs, measuring equipment, and construction machinery) All types of machinery and equipment as well as real estate
Method of choosing the items Customers are free to choose the items they want. Chosen from the inventory of the rental company Customers are free to choose the items they want.
Term Relatively long term (usually three to seven years) Short term (by the hour, day, or month but usually up to one year) Usually up to five years
Ownership of the item Leasing company Rental company Customer (However, ownership remains with the seller until all payments are completed.)
Depreciation Leasing company Rental company Customers
Treatment of expenses or losses In principle, the leasing company pays Full amount of the rental fees Depreciation and interest are deductible by the customer
Inventories None are held Always have some level of inventories None are held
Responsibility for the maintenance Customer (in the case of maintenance leases, the leasing company) Rental company Customer
Cancellations prior to expiration of the contract Not allowed Allowed Not allowed
Rents In general, less than for rentals. After completion of the basic lease period, fees are reduced substantially. Higher than for leasing The total amount of the cost of the item and interest divided by the number of months
Treatment of the item after completion of the arrangement Returned to the leasing company or continued usage under a re-leasing agreement Returned to the rental company Ownership transfers to the customer

Outline of the Transactions

Principal Leased Items

SMFL provides leases for all types of machinery and equipment necessary for the customers.

Information and telecommunications equipment and office equipment

  • Personal computer/Server
  • Copy machine
  • Network equipment
  • Facsimile
  • Telephone equipment
  • Office equipment

Industrial machinery

  • Semiconductor manufacturing equipment
  • Metal working machinery
  • Printing machine
  • Metallic mold
  • Industrial robot
  • Agricultural machinery

Machine tools

  • Lathe
  • Grinding machine
  • Milling machine
  • Machining center
  • Electric discharge machine

Construction machinery

  • Excavator
  • Crane
  • Wheel loader
  • Bulldozer
  • Road construction machine

Transportation equipment

  • Aircraft
  • Ship
  • Truck and bus
  • Forklift

Medical equipment

  • MRI
  • Radiotherapy machine
  • CT scanner
  • Medical electric machine
  • Ultrasonic diagnostic equipment
  • Endoscope
  • Machine for rehabilitation

Commercial equipment

  • Store fixture
  • Frozen and Refrigeration showcase
  • Vending machine
  • Car washing machine
  • Kitchen instruments
  • POS system
  • Hotel equipment

Equipment for environment and energy

  • Solar power generation equipment
  • Wind power generation equipment
  • Energy-saving equipment

Others

  • Sailboat/Boat
  • Golf course equipment
  • Multi-level car parking tower equipment
  • Others
Services & Solutions
  • Information for Manufacturers and Dealers

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