LBP Leasing and Finance Corporation (LLFC) was created in line with Section 21-A of Republic Act 337 or the General Banking Act that allows Banks like Land Bank of the Philippines (LANDBANK) to invest in established companies with allied undertakings such as leasing and financing activities.
The Corporation was created by LANDBANK to provide support to the Bank and its clients in the form of financial and operating leases. Its primary purpose is “to engage in leasing of all kinds of equipment, extend credit to industrial, commercial, agricultural and other enterprise and engage in financing of merchandise in all their various forms”. LBP Leasing and Finance Corporation makes available various leasing and financial facilities that support priority sectors in the acquisition of equipment and other capital assets as well as in providing working capital to expand, upgrade or modernize their operations.
LLFC was registered with the Securities and Exchange Commission (SEC) on March 17, 1983 as a fully-owned subsidiary of LANDBANK with an initial paid-up capital of Two Million Nine Hundred Pesos (P2,000,900.00) and was granted the authority to operate as Finance Company on March 18, 1983.
A. LEASING FACILITIES
Finance Lease is a credit facility where LLFC (lessor) acquires fixed assets based on the requirements/needs of the client (lessee) which are then leased by the client (Lessee) from LLFC (Lessor) through payment of periodic lease amortization. The benefits and risks of ownership of the assets are transferred to the lessee at the end of the term. This facility allows enterprises to acquire equipment, motor vehicle, lot and building and other equipment, to expand, upgrade or modernize their operations. It also enables enterprises to match financing terms with the earning potential of the capital asset, preserve working capital and credit lines and address existing or current budget limitation.
2. Operating Leases
Operating Lease is a credit facility where the client (lessee) makes rental payments to LLFC (lessor) for the use of an asset over a fixed period (normally, more than a year). Under the facility, LLFC retains the benefits and risk of ownership of the leased asset. At the end of the lease term, the lessee may opt to renew the lease, purchase the asset at its fair market value or return the asset to LLFC.
B. FINANCING FACILITIES
This facility provides medium or long-term financing to clients and may be granted to provide funding for the acquisition of equipment or other capital assets to be secured by the object to be financed and or for the improvement of client's equipment/asset that may contribute to the expansion and improvement of their business which will be secured by chattel mortgages.2.
2. Purchase Orders/Receivables Financing Line
This facility provides clients with a source of funds through financing of Receivables or Purchase Orders/Contracts. It is secured by assignment of outstanding receivables that are duly acknowledged/confirmed for products and services that had been delivered and accepted or confirmed or Purchase/Job Orders from established corporate or institutional customers to purchase materials and pay for other expenses needed to deliver the goods and services that are the subject of the purchase orders/contracts.
3. Short-Term Credit Line
This facility provides clients with a source of funds to finance short-term working capital requirements. This facility is provided to existing clients with good track record.
C. SPECIAL FINANCING PROGRAMS