Questions and Answers
What is the interest rate and how do you calculate it?
The interest rate is calculated depending on the particular lease product and pricing terms. We offer payment schedules with floating interest rates quoted as spread over 3month EURIBOR depending on the project and customer risk. The interest is accrued on the amount of outstanding principal balance.
What is 3month EURIBOR?
EURIBOR is the interest rate offered by the first-rate banks on London interbank market for deposits in Euro. The payment schedules offered by UBB Interlease are updated every 90 days according to the active 3m EURIBOR.
What is the currency of lease financing?
The financial leasing contracts of UBB Interlease are denominated in Euro and payable in Euro. In certain cases we could finance deals in USD as well.
Is it compulsory the currency of the deal to be the same as the currency of the payment to the vendor?
No, it is possible that approved financing is in Euro and the payments to the vendors are in other currencies (e.g. USD, GBP, SEK, etc.).
What is the downpayment and what is its purpose?
The downpayment is in the range of 15% to 50% of the value to lease depending on the lease products offered by UBB Interlease. The downpayment serves as client's personal commitment to the deal. Interest rate is not accrued on the downpayment. It is payable upon signing of the lease contract as the payment is a condition for the contract start-up.
If the lessee pays 20%-30% in advance to the vendor of equipment, is this payment considered a downpayment?
The downpayment is payable to the bank account of UBB Interlease and we cannot accept the advanced payment to the vendor as downpayment. The procedure we apply in such cases is reimbursement of the advanced payment by the vendor and payment of the downpayment by the lessee.
Do you require additional collateral?
We consider the downpayment sufficient commitment on client's part. Usually we do not require additional collateral, with the exception to cases when we require pledge of parts of the production lines owned by the lessee which are technologically linked to the leased equipment and are supplementary to the equipment, therefore allowing possible re-marketing of the whole line. (examples: system for automatic control of a production line and the production line itself, instrumental equipment and the line on which it is mounted).
What is the maximum term of the lease contracts?
The maximum term of lease contracts for equipment and machinery, transportation vehicles, cars and office equipment is 4 years, with possiblity for lease term up to 5 years.
Do you require financial commitment by the owners of the lessee?
Generally we require the owners of the lessee to sign the lease contract as co-lessees that will be joint and several responsible for the payments under the lease contract.
What is the typical method of lease?
The payment is in monthly installments consisting of equal principal amortization and monthly interest on the outstanding principal balance. We also offer payment schedules based on annuity installments (increasing payments of the principal) as an option for leasing of cars and transportation vehicles.
Do clients pay commission fee on the lease deal and how much is it?
Clients of UBB Interlease pay Front- End fee of 1.5% flat of the value to lease depending on the amount of the deal and the lease product. Unlike the standard procedures in Bulgarian bank investment loans, this commission fee is one-time charge entirely payable upon the signing of the lease contract.
Why UBB Interlease does not finance start-up projects without substantial financial support?
The research performed by our team shows that in cases of lack of background in certain business activity if a start-up project is not supported by reliable shareholders with steady business, the default probability exceeds 75%. By disapproving of high-risk deals in most cases we help the potential lessees as we keep them from serious financial and life distress.
Who does the VAT financing at the purchase of the equipment?
UBB Interlease pays the VAT at the purchase of the equipment. Client pays VAT at the payment of lease installments.
Who pays the insurance and what does it cover?
The insurance process is handled by UBB Interlease AD and the payment is done by the lessee. We require property insurance of the equipment (CASCO for the vehicles) including coverage on industrial fire and natural calamities as well as robbery.
Why the insurance process is organized by UBB Interlease AD?
We would like to make sure that the insurance will be duly done at insurance company approved by UBB Interlease and the risks required by us will be covered.
Do you insure the financial risk?
No, we only require property insurance of the equipment (CASCO for the vehicles), which makes our lease terms more favorable for the clients.
What is the UBB Interlease policy in case of continuous overdue payments?
UBB Interlease does not tolerate continuous defaults. The most severe procedure we can apply includes: blocking/repossessing of equipment, cancellation of lease contract and collection of overdue payments through court procedures.
Is the client allowed to prepay the lease?
Yes, UBB Interlease gives clients the opportunity to prepay. We require a one month written notice for the prepayment. The lessee shall pay the full amount of the principal outstanding according to the payment schedule and a penalty specified in the General terms of UBB Interlease as a percentage of the principal outstanding to be prepaid.
What is the term of delivery of the car after signing the lease contract?
UBB Interlease Auto signs a purchase contract with the vendor of the car chosen by the lessee and makes a payment not later than 1 working day upon receipt of the downpayment and front-end fee due under the lease contract. UBB Interlease Auto require submission of all the documentation necessary for car registration (invoice, customs clearance declaration). Upon receipt of all documents the relevant taxes and fees shall be paid and the car shall be registered. The car is delivered to the lessee after the installation of positioning and marking system (in case the lessee has required such security system). The term of delivery from the receipt of the complete set of documents from the vendor until the car is delivered to the lessee is not longer than 5 working days.
Has UBB Interlease Auto established regional branches in the country?
UBB Interlease Auto has established regional branches covering all areas of Bulgaria. The regional branches of the company are specialized in leasing of cars and commercial vehicles.
What are the advantages of leasing of a car through a branch of UBB Interlease Auto?
In our regional branches the potential customer shall be given detailed information on our lease products. We believe that the availability of a regional branch of UBB Interlease Auto near to our lessees shall facilitate the potential customers upon their application for lease financing and acceptance of the leased vehicle which is registered at the regional offices of the Road Police.
What should you do to apply for lease financing at UBB Interlease?
The application procedure at UBB Interlease is simple and flexible. You have to know exactly the kind of assets you need and to prepare main documents required for application.