What Are Leasing Agreements?
Leasing agreements allow investors to purchase assets and lease them to businesses in exchange for regular rental payments. This includes equipment, vehicles, machinery, and real estate. Investors earn income while businesses access needed assets without large capital outlays.
In Ghana, leasing is a growing financing alternative that supports business expansion while providing stable returns to investors.
Types of Leasing Arrangements
Operating Lease
Short-term rentals with maintenance included. Asset returned at lease end.
Finance Lease
Long-term agreements where lessee effectively owns asset by lease end.
How You Earn Returns
Monthly Rentals
Regular lease payments providing stable cash flow.
Asset Appreciation
Potential increase in asset value over time.
Example Return Calculation
Invest GHS 100,000 in construction equipment leased to a contractor for 3 years at GHS 4,000 monthly. Total rental income: GHS 144,000. After maintenance costs, net return of GHS 30,000 (30%) plus residual equipment value.
Key Benefits
Collateral Security
Physical assets serve as collateral for the investment
Inflation Hedge
Lease rates can be adjusted for inflation
Tax Benefits
Depreciation and expense deductions available
Residual Value
Asset can be sold or re-leased after initial term
Risks to Consider
Lessee Default
Tenant may fail to make lease payments.
Asset Depreciation
Equipment may lose value faster than anticipated.
Maintenance Costs
Unexpected repair and maintenance expenses.