Dedicated to serving the finance and operating equipment leasing market in the GCC region is Bahrain-based First Leasing Bank.

An affiliate of Ithmaar Bank, First Leasing offers leases for most types of equipment including manufacturing, industrial, technology, printing, construction, and transportation.
One of the features of First Leasing Bank is that it offers a pay for use equipment lease.
 Many businesses are familiar with the better known “normal” finance lease whereby the user buys the asset over a given number of years. The pay for use operating lease, however, offers significant savings for high-value, long-life assets that are only used for, say, one to five years.
A 50-tonne Rough Terrain Crane with a retail price of $1,000,000 provides a good example, an FLB spokesman said. These cranes have an economic life of about 15 years. Many times, the user only needs a rough terrain crane for the life of a project or two—say four years. Traditionally, the user would buy the crane via a finance lease or a bank loan. The payment for a $1,000,000 crane over four years is about $25,000 per month.
“With the pay for use operating lease, the user would have the right to use the crane for four years and then return the equipment at the end of the term,” he said. “The operating lease payment would drop to $18,000 per month, thus saving $7,000 per month. Should the customer invest the monthly savings in his business or other better yielding assets, the $336,000 savings could easily grow another $100,000 to a total of roughly $440,000. And, the user does not have to worry about getting the best price and arranging all the logistics of selling the crane in the second hand market.”
The operating lease has benefits beyond the cost savings, the spokesman explained. No matter what accounting convention is used, the above transaction qualifies for “off balance sheet” treatment. If the user were buying the crane, even with a loan or finance lease, the asset would go on the balance sheet and be depreciated. With the pay for use operating lease, the $18,000 per month payment is considered an operating expense and is not a balance sheet item. The positive accounting impact of the operating lease improves several financial ratios, especially the leverage or debt ratio which should entitle the user to a lower cost of debt or even to borrow additional funds.
Under the First Leasing Bank plan, the user still works directly with the manufacturer or the dealer-distributor and chooses the specific crane he prefers. The user negotiates the best price possible (thus lowering the monthly lease cost) as well as the maintenance package. At that point, First Leasing Bank steps in with full payment to the manufacturer or dealer and, in turn, leases the equipment to the user.
In short, the user has all the choices he would have with “normal ownership” but at a lower cost and without tying up extra cash or the worry of disposing the asset. In other words, the pay for use operating lease is focused on who has the right to use—not on who has the right to own.