what is the difference between purchase and leasing of the bank instrument?
2006-06-09 21:32:30 · 3 answers · asked by Tee W 2 in Business & Finance ➔ Other - Business & Finance
Bank Guarantee ( Also known as a Stand by Letter of Credit): in essence it guarantees the seller a certain amount of money in case transaction is not completed. This is usually only a small percentage of the value of the transaction.
The logic behind it, is that the seller invests time and resources, and other potential sales, when reserving product for his customer(buyer), if the buyer doesn't end up taking the product, he wants some form of compensation. A bank guarantee is basically that guarantee of compensation, if the transaction is not completed. If the transaction is completed then that bank guarantee cannot be cashed(also applies for service provision as opposed to just sale of product).
The opposite is known as a performance bond(guarantee for the buyer that the seller will perfrom/complete the transaction).
Difference between purchase and lease:
Purchase: You are owner of it from the beggining
Lease: You are not the owner of it, you are ownly using it!!!
2006-06-09 21:42:30 · answer #1 · answered by Prez 2 · 0⤊ 0⤋
To take all risk off the bank and heap all the risk on you. This is the advantage of Islamic bank over conventional bank. You need support and understanding and this is too much for your conventional bank to offer.
Islamic bank will grant you the loan and go it all the way with you. Aid you with managerial and other support. If despite it all, the result is failure, you need no stroke, the islamic bank will bear the loss with you.
2006-06-23 05:45:01 · answer #2 · answered by mikail 3 · 0⤊ 0⤋
just something in writting to make you feel good
2006-06-21 08:01:22 · answer #3 · answered by oneofthebless 3 · 0⤊ 0⤋