BLM71420 - ’Income-into-capital’ schemes and back loaded leases: 'Income-into-capital' schemes: Purchase options: options for borrower to get asset back

In an income-into-capital scheme an option is granted by the Bank to the Borrower. It may be granted by:

• the Bank’s subsidiary which leases the asset to the Borrower group; or
• a company connected with that lessor company; or
• conceivably an unconnected third party who is used as a conduit; for example, an unconnected third party who has an option to acquire the asset from the Bank group while the Borrower group has another option to acquire the asset (or a similar asset) from the third party.