LEASING WITHIN THE FRAMEWORK OF THE PROGRAM OF STATE SUPPORT OF LEASING OF AGRICULTURAL MACHINERY
Description of leasing objects and purchase price
“Spetsmash” LLC /http://specmash.am/. You can find the description and price of the agricultural machinery here
“Hrashk aygi” LLC /www.hrashkaygi.am/ You can find the description and price of the agricultural machinery here
Leasing is provided to commercial entities (including local authorities), entrepreneurs, farmers, as well as to individuals with a permanent source of income that are residents of RA.
Leasing is provided
* For combines up to 10 years of maturity.
* For tractors up to 6 years of maturity.
* For square balers and seeders-3-6 years of maturity.
* For other farm machinery up to 3 years of maturity.
Moreover, the period of leasing of tractors and other farm machineries to the same beneficiary can be set to a maximum of 6 years.
The currency of the leasing
20% of the purchase price of the leasing object
Nominal interest rate
9% annualy, of which 7% is subsidized, as a result the lessee pays 2% for credits in AMD currency.
• ATTENTION: THE INTEREST RATES OF LEASING ARE CALCULATED BASED ON THE NOMINAL INTEREST RATE. AND ANNUAL PERCENTAGE RATE SHOWS COST OF LEASING WHEN INTEREST PAYMENTS AND OTHER CHARGES ARE PAID IN STATED TIME AND IN STATED AMOUNTS. CALCULATION OF ANNUAL PERCENTAGE RATE YOU CAN FIND IN THE FOLLOWING LINK
The subsidization of the leasing is stopped, if:
a. there are overdue liabilities to the lessor for more than 60 days cumulatively in one year period (last12 months) or, because of overdue liabilities to the lessor, leasing is not classified in standard class according to “Resolution 63 on Approval of Procedure on Classification of Loans and Receivables and Creation of Possible Loss Reserves for Banks Operating in the Territory of the Republic of Armenia” approved by the Central bank of Armenia on 23.04.1999 and confirmed by the Ministry of Finance and the Ministry of Economy on 04.06.1999.
b. the monitoring done by “The Fund for Rural Economic Development in Armenia” or Development and Investments Corporation of Armenia finds that the object of the leasing is not kept in required conditions.
Lease Payment Procedure
Rent payments are usually carried out in equal monthly annuity by the leaseholder. In some circumstances, considering the activity characteristics, seasonality and other conditions, Development and Investments Corporation of Armenia may define break periods (grace period) in which annuity accrued interest amounts are to be paid in the future by adding them to the fees. Besides drawing up the schedule of fees it is set that after the provision of leasing fees are paid each year at least by 6 equal portions. Break periods are defined starting from the fourth month of the provision of leasing. Leasing interest calculation example is presented here:LEASING
Security of leasing
Guarantees from individuals and legal entities can act as enforcement to the full implementation of the leasing contract, particularly in the case of individual beneficiaries the guarantee should be given by at least two persons.
The transfer of ownership of the leasing object
Leasing contract provides that the right of property of the leasing subject will be transferred from credit institution to the lessee in the following cases and in order:
* after the end of the lease term set by the leasing contract, if the lessee fulfill all the obligations stipulated in the lease contract, has paid all the bills that had to, as well as has paid the fee of the transfer of ownership,
* until the end of the lease term set by the leasing contract, when the lessee has fully paid the outstanding balance of the capital, the calculated and non-calculated /that will later be added to the amounts payable/ interest payments of the maturity date established by the schedule of interest payments, fee of the transfer of ownership as well as the planned charge in case of early repayment.
Transfer Fee of Property Right:
* for tractors and combines- 5,000 (five thousand) AMD;
* for attached equipments – 3000 (three thousand) AMD.
Amounts payable to Development and Investments Corporation of Armenia for leasing
* For a leasing object of up to 2 million AMD (including) acquisition cost – 15,000 (fifteen thousand) AMD,
* If the acquisition cost exceeds 2 million for leasing the subject, 20,000 (twenty thousand),
* There is no service fee for combines.
(Moreover, the service charge may change depending on costs that the company makes on the examination of the loan application).
Insurance terms of the leasing object
Leasing object is insured for injury and loss risks for the entire period of the leasing contract. Insurance is carried by the expense of Credit organization.
* If the payment is not paid in schedule, a penalty is set on the expired part of the payment of up to 0.125% for each calendar day till repayment obligation,
* “WARNING: IN CASE OF NOT FULFILLING YOUR OBLIGATION OR IF THEY ARE FULFILLED
IMPROPERLY, THE INFORMATION ABOUT YOUR DEBT WILL BE SENT TO CREDIT REGISTRY AND CREDIT
BUREAU (ACRA CREDIT REPORTING). ATTENTION: HAVING A BAD CREDIT HISTORY CAN LATER HINDER
Periods of decision-making for Lease Application
After the proper submission of required lease documents within three days an analysis is made and if the results of the analysis meet the internal leasing regulations, the case is submitted to the competent authority for consideration. When the decision about the leasing application is made by the authority, it is immediately submitted to the customer.
Criteria for a positive decision on leasing
Leasing factors include: the reasoning of the acquisition of the leasing object, the client’s financial situation, sufficient long-term liquidity, capability of liability coverage, personal factors such as the client’s reliability and assertion of willingness to fulfill the obligations in time, abilities, experience, etc. The factors to refuse the provision of leasing are: The insufficient level of the above mentioned indicators, as well as false documents, inaccuracy of the documents, failure to submit the required documents, the negative information from credit register and / or from ACRA credit bureau, and other reasons.