The term “lease” is an English word denoting charter or rent. Leasing is an alternative finance model in which use, and not ownership, of the property is crucial: the philosophy of lease originates from an idea of using an investment in a profitable manner and with a flexible payment plan.
There are two basic models of lease: finance and operating lease (Longterm lease in Montenegro). Both of these models have certain features specific to them and together they satisfy all the lessee's needs.
The longterm lease concept enables property to be used and replaced with the new one upon expiration of the lease agreement. The lessor is the legal and economic owner of the property .
Finance lease enables you to become the legal owner of the property upon expiration of the lease agreement. The lessor is the legal owner of the property, while the economic owner of the property is the lessee
In this form of finance the lessee sells a long-term asset owned by him to the leasing company, whereas, immediately thereafter, the leasing company (the lessor) and the lessee enter into an agreement for lease of the property so sold.
The most frequent properties financed under sale and lease back agreements include real estate, machinery and equipment.
Sale and lease back agreements enable transformation of long-term assets into the cash in the account of the lessee.
Not familiar with the lease so far? We encourage you to read the FAQs and the replies thereto: some of your concerns may be resolved. Should you need additional, more in-depth information, do not hesitate to contact the professionals working in an S-Leasing or Erste Bank branch office nearest to you.
The guarantee deposit as such (its name being self-explanatory) constitutes a money deposit which serves as a security for the due and punctual payment of all monetary obligations of the lessee and of the return of the leasing object in ordinary/good shape. The advance payment is therefore not a down payment for the delivery of the goods or services (as treated under the V.A.T. Act); instead, it will be returned to the lessee upon expiration/return of the lease agreement. The lessee accounts for the guarantee deposit as a long-term asset.
The advance payment is such part of the aggregate compensation to be paid under a lease agreement, which is paid in advance. The compensation is divided during the finance period into proportional amounts and entered as a cost in the lessee's books at the maturity of each rent payment.
Under the General Terms and Conditions Applying to Operating/Finance Lease Agreements, lease installments/rent payments fall due on the first business day in each month. Payments of lease installments/rent shall be considered validly and timely made if made by the 08th (eightth) day in the current month. No default will be charged in this period.