Financial Leasing versus a Bank Loan

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When investing, a Bank Loan and a Financial Lease are among the most important financial credit methods used by companies, especially industrial and construction firms. What are the main differences between these two financing methods (financial lease and bank loan)?

1. CONTRACT'S SUBJECT:
   • The subject of a BANK LOAN is usually money, but sometimes the borrower does not use the money for the purpose for which the bank lent it for.
   • The subject of a FINANCIAL LEASE could be movable or immovable assets, but it cannot be cash money. So the lessee is obligated to use the asset according to the purpose in which it is allocated and maintain it, especially since she/he does not own the asset yet.
2. OWNERSHIP:
   • Ownership of the money in a BANK LOAN is transferred to the borrower as soon as the contract is signed.
   • In a FINANCIAL LEASE, ownership of the asset is typically not transferred to t (...) Read more? Sign up for free
     

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		Anonymous
	Financial Leasing and Bank Loan Comparison Dear Mohammad, thanks for your excellent explanati (...)