Business Management

Financing Asset Acquisition

Financing Asset Acquisition

Acquiring assets in this part of the world has remained an issue over the years. In the past, the assumption was that people had to save up to the actual cost of an asset before thinking of owning such an asset.

However, the prevailing trend in developed economies is that people do not have to wait until they are able to generate the total cost of assets they want to purchase.

It is either a bank picks up the responsibility to finance the transaction or a finance/lease company does so. Unfortunately, some Nigerians still believe that they have to wholly finance every deal that will make them owners of one property or the other.

The Finance/ Administrative Director of Chasemol & Associates an IT and Leasing firm in Lagos, Mr. Basil Ataname, says Nigerians have been reluctant to subscribe to the concept of leasing due to ignorance and rigidity of the mind, among other factors.

He maintains that a large number of Nigerians are yet to embrace leasing.

He stresses the need to qualify the activities of players in this line of business in terms of the roles they could play in assisting people get items of their dream effortlessly.

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Any one wishing to acquire an asset via financing has just a little challenge compared to the challenge that characterises the accumulation of the entire fund for the same purpose.

Experts say that the challenge is in making the right choice as to what is to be acquired. Once the idea is initiated, it can be actualised since the financer has what it takes to materialise the conception in terms of the wherewithal.

Ataname adds that deals of this nature put into consideration the welfare of the client while the financer remains exposed to the major risk imminent. Citing instances from his company`s experiences, he says, Many people who ordinarily cannot afford to buy a laptop, can get aid from the company in that regard. What is required of them is to pay the initial instalment of less than 50 per cent and spread the balance to between six months and one year, depending on what the client cherishes.

According to him, after the first instalment, the client is allowed to go home with his laptop.

He, however, stresses that the asset does not fully belong to the beneificiary at that point, saying anything could still happen.

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He may decide not to pay again, or can even travel abroad. If he was hitherto employed, such employment cannot be guaranteed because he may decide to leave the job or get relieved of the job by his employer.

In worst cases, such persons could even die during the period of the transaction.

Due to these unforeseen exigencies, the major risk tend to rest with the company giving out the finance facility. In most cases, the company continues to spend additional money despite the fact that it is being owed the balance on the asset(s) given out. This means a zero risk condition for the asset acquirer.

The Marketing Manager, Finance Trust Limited, Mr. Sylvester Ani, said banks intervention in issues relating to financing assets ownership, is a big relief for beneficiaries. Banks have the funds in large quantum, and can afford to spread payments for the client more than ordinary finance companies. This situation, he says, portrays a bright future for the business, he says.

To a large extent, people are encouraged to utilise this opportunity and own assets of their choice. The fact that some banks have taken to this line of business makes some people to get suspicious, saying that the conditions of these transactions will in no way be different from the conditions attached to loan facilities granted by banks, which in most cases are seen as exploitative.

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On the other hand, if people do not deem it fit working with banks to acquire assets, they can do same with good and registered finance and leasing companies spread all over the country.

With 40 per cent upfront payment, one can own an asset of his choice, and spread payment for the balance within six months to one year, or even over. This eases stress for the asset owner, and facilitates planning for him.

The conditions to be met here are basic. A regular source of income is in most cases what is required coupled with agreeable contract in that regard. The whole idea behind this is to make living easier and stress-free. It is a welcome development, and should be embraced by Nigerians.


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