El Sewedy Group started Easy Lease with the aim of providing easy and innovative financial solutions that could reinforce clients’ operational and financial performance. The company’s main path and commitment towards the Egyptian economy and the lending industry is “innovation,” matching global trends, which should facilitate the business needs of all Easy Lease clients. Easy Lease was inaugurated in June 2021 under Law 176/2018 with an authorized capital of EGP 500 million and a paid-in capital of EGP 200 million, knowing that shareholders, across the past short period since inception, have been highly committed to supporting the business through several paid-in capital increases.
Easy Lease offers financial leasing services in two types: direct and sale-leaseback. The company’s strategy is to target the Egyptian market from different angles. Accordingly, Easy Lease is keen to diversify its portfolio to include an acceptable chunk of small and medium-sized enterprises (SMEs), along with assorted corporate clients. Easy Lease offers its clients complementary services that should ease and expedite the transaction process according to their needs. It is imperative to mention that the company has tailored business programs toward different types of clients according to their requirements, expectations, budget needs, and constraints, all in line with the company’s risk appetite. We are happy to announce that we have already obtained the factoring license and are currently preparing the setup to launch the service within less than a month, accompanied by its customized programs. We are pretty sure that adding the factoring services will not only empower Easy Lease’s position but also complement our clients’ needs and expectations.
Direct lease is a simple form of a lease agreement that involves the purchase of the asset in favor of the client from the supplier, landlord, or property owner, while the sale and leaseback services enable clients to unlock the capital held in their assets to finance a business that is aiming for expansion and immediate liquidity. The lessor purchases the asset at an agreed value and finances it back to the client over a fixed repayment period.
Easy Lease also has a strong positioning in the market through its syndications and club deals with other lending institutions, including banks and leasing companies, in which the company can transact a security agent deal and/or risk share.
Easy Lease offers its clients different ticket sizes according to their needs, capacities, and cash flows that can absorb this; however, the company may offer from EGP 1 million up to EGP 1 billion, whether directly or through club deals or security agent transactions.
Easy Lease, through its expert team members, offers benefits over traditional bank loans, including tailored financial leasing services that meet the specific needs of the companies, such as seasonal and budget constraints. Nevertheless, Easy Lease is keen to expedite the process to fit the clients’ needs within acceptable timeframes that do not affect the smoothness of the business. Banks are essential in the entire process and will remain vital for clients; however, banks usually use several fees to boost their rates of return and sometimes prolong the process for different reasons. On the other side, Easy Lease offers a high quality of service and involves innovative solutions for its clients to compete with banks’ rates as much as possible, parallel to tailored lease repayment structures that match the clients’ budget constraints through affordable tenors.
In a nutshell, Easy Lease provides more flexibility and convenience for businesses.
Factoring is a mean to obtain a short-term fund in order to increase the cash flow cycle while promoting the liquidity in addition to profitability through lease agreement to be concluded between the factor and seller, by which the factor purchases the current and future financial rights arising from goods selling and services provision.
The factor is the licensed entity from the FRA and the client who is responsible o debt recourse in the factory transaction.
Factoring Vs. Loans
| Factoring | Loans |
| Non-banking activity subject to the control by the Authority | Banking activity subject to the control by the Central Bank |
| Mainly concerns with the purchaser’s debt | Mainly concerns with the credit eligibility of the customer |
| Contains three parties | Contains two parties only |
| Is not reflected in the balance sheet, which mitigates the financial burdens | Loan transactions reflected in the balance sheet |
Factoring Vs. Bank Finance
|
Factoring |
Loans |
|
Provides finance to workers post selling and shipping the goods and issuance of the final invoice |
Grants bank credit to the customer before and after goods shipping |
|
Focuses on analysis of the ability and regularity of the debtors (purchaser of the goods) in payment of its obligations in addition to its credit eligibility |
Largely focuses on the credit eligibility of the borrower |
|
Provides immediate finance; therefore, it is reflected in the cash flow in the balance sheet of the customer as a debt transferred to the factoring company (in case of factoring without the right to recourse) |
The bank loans are listed in the liabilities in the balance sheet |
|
Deals with all types of customers in all sectors |
Depends on the financial position of the customers |
|
Finance with or without the right to recourse |
Often requires the right to recourse against the customer |
|
Factoring services includes: Covering risks, collection services, and management of debtors along with finance granting |
The bank finance grants finance only |
The Finance Lease Agreement arises between the Lessor and Lessee, by which the Lessor transfers the leased asset that is owned to it or acquired from the supplier to the possession of the Lessee for utilization in exercising income-generating activities for limited time and determined rent.
It is one of the untraditional sources of medium and long-term investment finance, by which the right of utilization of certain asset owned by the Lessor is transferred to the user (Lessee) under a contractual agreement to be concluded between the parties in return of regular payments for specific period of time. At the end of the period, the Lessee may purchase the leased asset.
On the other hand, the lease contract is a short-term contract that covers a period of time that is less than the expected productivity cycle of the leased equipment. It is different from the operational lease that it often covers a period of time that is less than one year, and the Lessor shall provide some services such as maintenance. In addition, the Lessor shall bear the obsolescence risks and insurance on the asset. In addition, the Lessee does not have the right to purchase the asset.
It is an agreement that contains three parties (Lessor, Lessee and Bank), as the Bank is the Lender of the company for the purpose of financing the Lessee, provided that the role of the company is limited to collection of the rent from the Lessee, and acting as the security agent on behalf of the Bank. The final obligator towards the Bank is the Lessee without the right to recourse against the company.
The Finance Lease often covers all types of assets that are used for exercising productivity activities, whether industrial, commercial, services, agricultural, or others, including the following:
When the lease company receive a request from any customer, the company requests the following from the customer:
The lease company shall evaluate the credit of the customer in order to define the range of credit risk, and suitability of finance lease to Lessee conditions and requirements.
After evaluating the customer by the company, the company submits its proposal to the Lessee, and the main requirements of the agreement shall be determined including the rent and the right of the Lessee to purchase the asset.
After studying the proposal by the Lessee and comparing it with the proposals from other companies, the Lessee shall enter into negotiations with the company to negotiate about the lease conditions.
The information about activity and profitability of the Lessee shall be reviewed and a decision shall be made in this regard taking into consideration that the agreement value shall align with the credit limits determined by the lease company for each customer.
The agreement is signed and procedures of receiving the leased assets are arranged.
