What is a leasing guarantee?

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What is a leasing guarantee?

Guarantee scheme of the Agricultural Credit Guarantee Fund is regulated by the Resolution No. 192  "Regarding Rural Credit Guarantee Fund" of 22 August 1997 of the Government of the Republic of Lithuania.

The Company provides guarantees to financial lease (leasing) companies the payment of up to 60 per cent of the unpaid portion of the price of the new (unused) production equipment and/or new (unused) machinery, manufactured no later than 2 years before the conclusion of a financial lease (leasing) contract,  established in the financial lease (leasing) agreement.

Guarantee obligations to financial lease (leasing) companies are fulfilled after the financial lease (leasing) comapany terminates financial lease (leasing) agreement and realizes the object of the financial lease (leasing) for the unpaid portion of the price under procedure established by the laws, and other terms and conditions provided for in the Guarantee Issuance Agreement have been fulfilled. The Fund pays the difference between the unpaid portion of the price and the income received by the financial lease (leasing) company from the realisation of production equipment and/or machinery.