Finance Leases and Installment Sales
When its customers seek to acquire machinery and equipment from manufacturers and dealers, SMFL Leasing (Malaysia) Sdn.Bhd. (SMFLM) purchases the equipment instead and leases it to the customer. This is the most-common leasing transaction. SMFLM deals with a wide array of property including information equipment, industrial machinery and equipment, construction machinery, transportation equipment, commercial facilities, and medical equipment. We provide leasing strategies tailored to the needs of our customers, taking into account for example, how long they plan to use the equipment. For customers that wish to own the property, we offer installment sales.
Operating Leases are a scheme where the customer's lease payment is based on the value of the property less its residual value, the amount it is worth at the end of the lease term. In principle, SMFLM assumes the risk related to the future value of the property. Accordingly, operating leases have the advantage of lower lease payments compared to finance leases. Structuring operating leases in accordance with accounting and tax regulations offers customers effective financial strategies by moving these capital investments off the balance sheet. SMFLM offers operating leases in various fields ranging from semiconductor production equipment to machine tools and medical equipment.
Leasebacks are contracts that entail SMFLM purchasing machinery and equipment currently owned by a customer and leasing the same asset back to the customer. The customer continues to utilize the asset it sold and is able to procure funds from the sale of the asset.
SMFLM purchases the notes and accounts receivable from customers on a nonrecourse basis. In the event receivables cannot be collected due to cases such as bankruptcy of the original debtor, our customer is not obligated to buy back the receivable, contrary to bill discounting. Factoring allows our customers to hedge credit risk of the original debtor, streamline their balance sheets, improve cash flow, and diversify fund procurement.
For manufacturers and dealers, we offer leasing and deferred payment services that address customer needs for sales promotions. Through our marketing networks inside and outside Japan, we support the marketing activities of our customers throughout Japan and overseas.