SOURCES OF BUSINESS FINANCING

CHAPTER ONEINTRODUCTION

1.1 BACKGROUND OF THE STUDYFinance ahs been described as the bold of any business organization and its vital need is double realized where it is Ladcing Lease financing is becoming one of most important sources of finance for a firm.

According to J.Iloh (2002) leasing is sources of long term financing involving a contractual agreement between two parties the lessor who owns the assets and the leases who is utilizing the asset in consideration of a periodic payment called lease rental payment. The lessee in able to use the assets with a limited outlay of his own find.

Lease companies represent a kind of specialized financial institution that provides customers with access to productions assets such as automobiles airplanes and equipment through the writing of lessee.

According to a assets (1997) lessee allow business to use asset some time at a lower cost than borrowing or owning the same asset stream of lease benefits form depreciating the leased asset the study would be taken this.

1.2 STATEMENT OF THE PROBLEM

There are so many ways and method by which companies in Nigeria set aside their Limited finance resources to ensure that the obsolete of their asset are change as and when due. But in Enugu many companies leasing in financing their business.

1.3 OBJECTIVE OF THE STUDY

1. To find out why lease is preferable to other sources of business financing.

2. To find out the impact of leasing on business formation

3. To recommend what can be done to maintain and enhance the success to leasing in sourcing business not only in Enugu but in Nigeria as a whole.

1.4 SIGNIFICANCE OF THE STUDY

The study is very timely especially today that all hands are on deck to enhance the development and growth of Nigeria industries.

Also it will be a guide to the organized private sector in meeting their short term need without significance capital investment. In addition the study will also be a guide to individual who need an equipment (Car) but event to avoid the responsibilities of owning such equipment as they might consider leasing. Finally it would be a coverage to research scholars on finance with other recorded discipline.

1.5 DEFINITION OF TERMS

Finance: Finance simple means money to finance means to provide or raise the money needed to carry out an activity

Lease: A lease is contractual arrangement between two person whereby the lessor lent his property to the lease in certain period either install-mentally or in bulk.