Glossary

«Sale and lease back» ― a leasing operation wherein the User is also the supplier of the financed good, the Locator acquiring from the same the good for an agreed value.
Through such an operation, the financing of the User is achieved, by taking out of the accounting balance sheet of a good under property and this good will be reacquired at the end of the leasing contract.
It is obviously that the assessment of the good object of the contract is conclusive and belongs exclusively to the Locator.

Cross-Border Leasing (abroad / external) ― a leasing operation, either financial or operational, effected between
a non-resident Financier and a resident User.
Leasing operations made between two residents are called internal leasing.

Advanced Amount ― amount paid by the User when signing the leasing contract, covering the value of the acquisition in
a negotiated proportion.

Buy-back ― convention between the Financier and the supplier of the financed good, for its redeeming at the end or during the leasing contract, if the good would be returned to the Financier.

Administration Commission (Management Fee) ― amount paid by the User when signing the leasing contract, covering the expenses for initiation, analysis and preparation of the leasing contract.

Economical Life Length (of the good) ― the estimated remained period, when the good may be economically used by one or more Users, under normal operation and repairs conditions, with the purpose mentioned at the signing of the leasing contract.

Leasing Length ― period of time when the leasing contract produces effect on the parties.

Fidejusor / Guarantor ― a company or a natural person, different from the User, who assumes to undertake its financial obligations if the first one refuses to or is unable to guarantee such payments.

Financier / Locator ― a party of the leasing transaction, the owner of the financed good who makes available to a third party the good aimed to be operated, in exchange of periodical payments.

Supplier ― a party of the leasing transaction who supplies (sells) the good to the Financier.

Novation ― the leasing contract transfer to a new User who, undertakes, in this manner, the rights and obligations of the initial user.

Leasing Instalment ― the amount paid by the User, periodically, in exchange of the using right on the financed good.

Anticipated Termination Penalty (Anticipated Termination Fee) ― the amount contractually claimed by the Financier to the User, under the conditions of anticipated termination of the leasing contract.

Technical Risk ― it refers to the Financier’s risk of generating financial losses if, by selling financed goods returned (re-possessed from) by the User, the credit balance will not be recovered. It is due to the more rapid decrease of the market value of the financed goods, compared to the credit redemption.

Sub-lease ― a transaction where the good is sub-leased by the User to a third party, and the initial leasing contract remains in force.

Financed Amount ― a value equal to the cost of acquisition out of which the value of the advanced amount paid by the User is reduced.

Premature Termination ― the possibility granted to the User to terminate anticipatedly the leasing contract, in which case penalties of anticipated termination are possible.

User ― a party in the leasing transaction, who receives the right to use the good in exchange of making periodical payments to the Financier / Locator.

Residual Value ― amount paid by the User at the end of the contract, usually in the same time with the last leasing instalment, if the User exercises its option to purchase the good.

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