Best Asset Finance Companies in Uganda

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Which are the best Asset Finance Companies in Uganda?

Here we list the best asset finance companies in Uganda, which finance leasing of heavy commercial vehicles, earth movers, offer car loans, finance limited and partnership businesses.

Here are the best banks in Uganda that offer asset financing.

  1. BANK OF BARODA

Bank of Baroda is one of the most reputable companies that finance institutions and individuals that wish to own assets. Features of the bank’s loans are:

BARODA Asset Financing (BAF)

 
 
Type of Facility: Term Loan
Eligibility:
  • Private and Public Limited company, Individual Business men, Sole Proprietorship concern, partnership firms
  • Prior account relationship not essential. However details of the applicant’s present account (either with our Bank or with other Bank) for last six months should be studied to satisfy that the conduct of the account is satisfactory.
  • A/c should be Standard with other Bank in case of take over.
  • Minimum period of established business / employment – 5 years.
  • The business should be profit making
Purpose:
  • For purchase of any Trucks, Tractors / Heavy vehicles, Moveable Asset (Machinery) and Car for business purposes.
Amount of Loan:
  • New Asset / Vehicle: Maximum Ugx. 250 million per Asset
    Old Vehicle            : Maximum Ugx. 100 million per vehicle
Margin:
  • 25 % on cost of new vehicle / Asset including registration charges & one time insurance premium of the vehicle.
  • 40% on cost of old vehicle including registration charges & one time insurance premium of the vehicle..

INSURANCE: Cost of insurance will be financed by the Bank under the above scheme, however Insurance of the Vehicle will be under one time Insurance Policy up to the tenure of the Loan.

Interest:*
  • PLR  + 2% with monthly rest.
Repayment:
  • New Vehicle: Maximum in 60 months in Equal Monthly Installments.
    Old Vehicle : Maximum in 48 months in Equal Monthly Installments.
    Pre payment of loan permitted subject to 2% service charges of outstanding loan amount.
Other Conditions:**
  • The borrower should have adequate repayment capacity to service the Vehicle Loan and other existing Loans of the business. Borrower shall have to provide Income proof supported by Income Tax / Sales Tax / Audited financial Statement.
  • In case of finance of Old Vehicle: It should not be older than 10 years.
  • Garage Certificate of reputed Garage in respect of the residual useful life of the vehicle.
  • Two Installments as per EMI of respective loan account to be paid in advance.
  1. EQUITY BANK

Asset Finance Loans

Helps to ensure that customers are able to acquire assets to improve on their welfare or business logistics.

Features

  • It is a bank undertaking hence must be secured
  • Usually advanced for 36 months and on exceptional cases for 24-48-60 months.
  • Customer/bank contribution is usually 30/70.
  • The bank earns interest income on it.

Benefits

  • Lasts longer, simple requirements
  • Client obtains credit  hence easing increase in liquidity and non-current assets

Requirements

  1. There must be an existing legal business with an operative bank account
  2. Application for the facility with  a clear purpose supported by documentation such as invoices, order, etc
  3. Financial  information
  4. Collateral/security
  1. STANBIC BANK UGANDA

Vehicle and Asset Finance (VAF)

Vehicle and Asset finance is a unique solution that will help you solve all your vehicle and equipment financing requirements. It’s asset-based and will help you to purchase acceptable, identifiable, durable, moveable and insurable assets. Our dedicated and professional team will assist you to make the right decision for business or personal financing. We have numerous accredited vehicle and equipment suppliers with whom we have maintained good working relationships. By choosing to purchase your asset from any of these suppliers/dealers, you stand to enjoy many benefits that you would otherwise not receive when you deal with a non-accredited dealer. We finance moveable assets that are clearly identifiable, movable, durable and insurable e.g. • Vehicles – passenger and commercial • Plant and machinery – manufacturing, processing plants, etc. • Equipment – printing machines, factory plants, office equipment, professional equipment etc.

What does it offer me?

  • Alternative source of finance-utilize collateral for other borrowings or working capital
  • No or minimal collateral required-deposit and repay­ment period will be determined by the type and age of the asset.
  • Lower cost structure
  • Minimum capital outlay required
  • Matched maturity where terms = asset life
  • Flexibility and shorter processing time
  • Access to equipment and production assets
  • Increased flexibility and investment in equipment
  • Lower maintenance and upfront cost
  • Easy cash flow budgeting
  • Rentals can be tailored to meet the lessee’s cash flow pattern

What are our product offerings?

Vehicle loan:
If you need a vehicle for your private or professional use, we can help you make owning a vehicle less complicated. We now offer a simple vehicle specific product that is easy to manage, with more cost effective repayment terms.

Leasing:
Leasing is a contractual agreement that allows you (the lessee) to use an asset owned by a leasing company such as Stanbic Bank Uganda (the lessor) in exchange for specified periodic payments.

Insurance requirements:
All risk is for the client as user who has an obligation to insure the assets. The assets must be comprehensively insured for the period of the contract. Stanbic Bank interest must be noted in the policy, Stanbic Bank is prepared to finance Insurance premiums on an annual basis.

What do I need to apply?

For the Personal Vehicle and Asset Finance Account:
•    Appointment letter from employer
•    Duration of the employment contract
•    Proforma Invoice for the vehicle to be acquired
•    Employer recommendation letter
•    Asset not older than 10 years from date of manufacture
•    Financial card

For the Business Vehicle and Asset Finance Account:
•    Proforma Invoice of the asset
•    Registration details of the business
•    3 years audited financials
•    Brief background of the business
•    Financial card
•    Asset not older than 10 years from date of manufacture

  1. BANK OF AFRICA

Motor Vehicle Financing Loan

An asset financing product with the asset financed serving as security for the borrowing.

This is an asset financing product with the asset financed serving as security for the borrowing. The desired target market is individuals or organizations with existing income inflows or employees backed by regular salary payment.

This loan can be for personal and commercial use and can be used for purchasing a motor vehicle or financing of an asset.

Features of the Motor Vehicle Financing Loan

  • Loan limit is up to UGX 100,000,000
  • Loan repayment periods from 12 to 48 Months
  • Age of vehicle: New vehicles and used Vehicles (Imported used vehicles) manufactured after 1994
  • Service Ratio: 35% of an individual’s net pay for salary earners
  • Collateral: Undertaking from employer, for salary earners, Logbook (simple deposit). Comprehensive insurance cover for all motor vehicles financed
  • Process: Applicants to deposit of 35% of the total cost of the motor vehicle and Bank of Africa Uganda will fund only up to 65% of the value of the motor vehicle.
  • For commercial vehicles, the customer should have the extra cover for additional works on the motor vehicle body needed before the vehicle can be put on the road.
  • All vehicles for financing should be independently assessed to establish road worthiness.
  • A report of the inspectorate of vehicles or similar authority will be required.

Requirements for the Motor Vehicle Financing Loan

Requirements Salaried employee

  • Completion of Loan Application form – Instant cash form
  • Undertaking from the employer
  • Copy of identity card
  • Latest Pay slip
  • Proof of residence (Local Council letter/Utility bill)
  • Proof of nationality (Passport/Birth certificate) if a foreigner
  • Appointment/contract letter
  • Proforma Invoice from vendor

Non-salaried applicant:

  • SME/ corporate application requirements including account statements for six months.
  • SME application forms
  1. UGANDA DEVELOPMENT BANK

Asset Financing

This is a mode of financing where UDBL acquires and provides productive assets for use by the borrower/customer for an agreed period of time in return for a periodic repayment over a specified period. This requires a contract between the Bank and the customer.

Legal and economic ownerships of the asset are passed on to the customer, unlike in case of a lease financing where the two are separate.

Purpose:
For financing start-ups and SMEs that in most cases do not have a track record or significant asset base for collaterals. The lack of separate collateral apart from the asset being financed offers an important opportunity for businesses.

Qualifying Assets/businesses:
Asset finance shall be for assets that are used to generate income stream/cash flows that ensure timely servicing/repayment of loan obligation. The assets to be financed should facilitate production in key growth sectors of the economy. Productive assets may include: Farm machinery & irrigation equipment, Agro-processing machinery & Dairy equipment, Industrial & Manufacturing equipment, Construction & Heavy equipment, Commercial trucks, Refrigerated trucks & Fork Lift, Cold stores, Cranes, Chemical equipment amongst others.

The asset must be identifiable and non-consumable.

Tenure:
The duration for Asset Finance loans will be determined by the useful economic life of the asset adjusted to 80%.

Grace Period:
The grace period for Asset Finance loans ranges from 1 month to 6 months, depending on the nature of the business asset and expected cash flow generating capacity of the asset financed.

Interest rate:
The Bank’s reference (prime) interest rate for Asset Finance loans per annum is 13% plus the risk premium determined by the Bank’s interest rate model. The USD funded assets shall be financed at 6.0% plus a risk premium per annum

Appraisal Fees:
Appraisal fee for Asset Finance loans is 2% of the value of the loan with a maximum capped at 100m.

Restructuring Fees:
Restructuring Asset Finance loans shall carry a fee of 2% of the amount of the loans restructured and payable upfront.

Collateral/ Security:
Asset Finance loans will be fully secured preferably by asset in question and/ or acquired personal or business assets owned by the customer or third party. In addition, Corporate and personal guarantees of the business owner(s) will be required. Upfront cash payment of 20% of the purchase price of the asset will be required.

  1. UNITED BANK FOR AFRICA

Asset Finance

This is a loan designed to enable you realize your dream of owning that asset that you have desired all your life, but lost hope each time you have looked at the cost. Let it be a brand new car or fairly used car, we shall make it possible for you. It can also be that household item you admired in the showroom.

Eligibility

  • Confirmed employees whose salaries have been paid through UBA for at least 3 months.
  • Length of employment with the current employer must be at least 12 months.
  • Application form endorsed as required by applicant’s employer.
  • Applicant must have been resident in the current address for at least 6 months as evidenced by utility bills.

Features and Benefits

  • Bank avails you up to 70% financing of asset value
  • Very flexible repayment period- 24 months for household assets and motorcycles, 36 months for fairly used vehicles and 48 months for brand new vehicles.
  • Your salary or ISPO or asset is your collateral
  • You need only a little amount of your savings to own your dream asset. No need to save for long periods.
  • Competitive interest rates

Enrolment Process

  • Complete a UBA Consumer Loan Application form
  • Obtain a pro-forma invoice from any of the UBA authorised vendors (list will be provided to you)
  • Asset being financed must be on the approved list and comply with specifications, in respect of fairly used vehicles (guidance will be offered).
  • Submit filled application to your relationship manager
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