Commercial Lease Bonds

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	Do you rent a commercial or industrial property and have money tied up in a rental bond?
	Would you like to have that money back in your pocket for use as working capital etc?
	Would you like for us to arrange a refund of these funds and replace the landlord’s security requirements from as little as 3.5% per year without tying up property or term deposits etc?
	To find out how we can help you, please complete the following enquiry form. We will then contact you with an obligation free quote within 48 hours.

The Purpose

Lease bonds secure rental streams in properties similar to bank guarantees, but unlike bank guarantees, they offer landlords the opportunity to improve occupancy rates or rental security periods and penetration.

BENEFITS TO TENANTS

Lease bonds free up working capitol without the need for property or term deposits being tied up as security.

Lease bonds are extremely cost effective, tax deductable and can be organised within 48 hours.

The lease bonds are guaranteed by underwriters that are approved by APRA and hold Australian Financial Services
licenses. Make a quality decision and explore the benefi ts of Insurance Services new innovations.

BENEFITS TO LANDLORDS

Enhanced revenue security – Being an off balance sheet transaction means that in the event of a tenant going bankrupt, the landlord gets paid direct, rather than sharing whatever is left of the receivers pool of funds.

Longer rental periods secured – due to cost effi ciencies for tenants.

Facilitate difficult lease negotiations – by allowing tenants to re-deploy working capital currently tied up on balance sheets securing bank guarantees.

Speed – bonds will be cashed within 24 hours of demand and presentation of the bond.

Lease bonds provide lessor’s the same legal rights as a conventional bank guarantee by allowing them the same legal rights to “cash in” the security.

What are Commercial Lease Bonds?


Businesses that enter into a tenancy agreement are typically required to lodge some form of security with the landlord to cover the value that usually represents a period of rental outgoings. To protect the landlord in the event that the tenant defaults on their tenancy agreement.

The security sought by the landlord is typically provided to the tenant by financial institutions (mainly banks) on a secured basis i.e. For smaller enterprises, a bank guarantee secured by working capital held in a term deposit account. For larger enterprises & corporations, a bank guarantee from established lines of credit secured by
company assets.

This secured approach by financial institutions means that: cash or part of established lines of credit is denied to the business as working capital. Accounting treatment means that this secured approach impacts the businesses financials i.e. the transaction is said to be on balance sheet. Being on balance sheet means that the businesses ability to further borrow is reduced. Despite the banks having security, they still charge annual fees for the guarantee.

The Commercial Lease Bond was developed so that a Lessee did not have to use their own funds or arrange a bank guarantee. The bond purchased from Lescorp would act as the security until the lease is terminated.

Under the Commercial Lease Bond arrangements:

At the establishment of a commercial/retail lease, the real estate agent may inform the lessee of the features and benefits of the Commercial Lease Bond, inviting the lessee to complete an application for a Commercial Lease Bond; Lesina Corporation Pty Ltd (ACN 114 039 324) trading as Lescorp (ABN 25 114 039 324) (Lescorp is acting as agent for the issuer of the Lease Bond; Lescorp will then assess the lessee's application in accordance with its underwriting requirements.

Upon Lescorp accepting a lessee's application for an Commercial Lease Bond and the lessee paying the required amount to Lescorp, The Insurer will issue a lease bond to the landlord in respect of the lessee's obligation to provide a rental bond under the lease.

Who can apply for a Commercial Lease Bond?

Any tenant of a property including:

Existing tenants who wish to free locked up capital, and replace their current cash bond.
Business owners who wish to expand their business, and lease bigger or more appropriate premises
 

Please Click here to see Minimum Requirements