Tripartite Lease

Such a lease involves three different panics in the lease agreement: (i) the equipment supplier, (ii) the lessor and (iii) the lessee. An innovative variant of the tripartite lease is the sales aid lease under which the equipment supplier arranges for lease finance in various forms by:

Providing reference about the customer to the leasing company.

Negotiating the terms of the lease with the customer and completing all the formalities on behalf of the leasing company.

Writing the lease on his own account and discounting the lease receivables with the designated leasing company. The effect is that the leasing company owns the equipment and obtains an assignment of the lease.

The sales aid lease is usually with recourse to the supplier in the event of default by the lessee either in the form of an offer from the supplier to buy back the equipment from the lessor or a guarantee on its half of the lessee.

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