7
whichever is the earlier. Termination payments due under
the contract are covered.
B
FINANCIAL SUPPORT
i
Lessors are eligible for ECGD's bank guarantee facilities. Under such facilities ECGD guarantees to a bank that bills of exchange (or promissory notes) drawn by the lessee to cover rent due will be met on due date and on the basis of this guarantee the bank will advance to the lessor funds at a preferential
rate of interest. In the case of leases of over 2 years
duration, ECGD would normally be prepared to pay the bank the difference between the appropriate internationally agreed fixed rate of export finance and the floating agreed rate of return
to the financing bank.
3
OPERATIONAL LEASES
A
COVER
i Under such leases rental payments reflect income to the
lessor from his investment in the goods leased. The total
earnings from a single lease may not be sufficient to cover
the cost of the goods and the lessor would aim to lease the
goods more than once, possibly to differing lessees.
* Pandit këshin ja di
CANA, PÈRE DONE
ii
Cover is available under ECGD's Specific Services Guarantee
or in the case of leases in the short term field under the
Comprehensive Services Guarantee. Both provide normal credit
insurance cover for sums, due under hiring contracts.
4
SECURITY
For leasing contracts with China involving a contract price of £1m
or more a guarantee of payment from the Bank of China is a fundamental
requirement of ECGD cover.
2