Leasing is a type of financial services that is a popular alternative to loans. Most often, property acquired on lease is used for business purposes.
Differences between leasing and credit
At its core, leasing is a long-term financial lease, which implies the right to purchase property. Whereas a loan is a loan that is provided by a bank with the terms of payment by the borrower of the full cost of the loan and interest.
It is easier to acquire property on lease than on credit. The minimum package of documents is required, the deposit is optional, the application is considered within 5 days.
Leasing differs from credit in that during the term of the lease agreement, the owner of the equipment is the lessor. In the future, the equipment can be transferred to the ownership of the lessee, or returned to the leasing company (the first option is more common). This should be spelled out in the contract and depends on the type of leasing - operational or financial. The subject of leasing can be buildings, equipment, vehicles and other property.
It should be noted that if the lessee subsequently redeems the property, then by this time it may already be fully depreciated. The fact is that in relation to leasing, an accelerated depreciation rate is used. Thus, the company will not have a property tax base.
Since the owner of the property is the leasing company, the lessee can only use the property. But he is responsible for his death or damage.
When acquiring property on credit, the company immediately becomes its owner, but it is pledged by the bank. However, the possibility of free use of property (for example, its sale or lease) is largely limited by the loan agreement. The obligation to insure property also remains. Ownership of property entails the need to pay transport or property tax.
As in the case of a loan, with a lease agreement, the lessee pays monthly payments under the agreement. They consist not only of the value of the property itself, but also the profit of the leasing company, the amount of insurance and property taxes.
Leasing advantages
Leasing schemes are increasingly used by Russian companies. What are the main advantages of leasing over loans?
Firstly, leasing allows you to optimize tax payments. The lessee does not pay property taxes and transport tax, he can attribute all lease payments to costs and reduce the tax base and income tax. Since the payments include VAT, the company can deduct it from the budget in full.
The advance deposit under the lease agreement is 20-30%, which corresponds to the initial payment on the loan. But when issuing a loan, the bank studies the history of the organization, reporting, the availability of collateral and collateral.
Secondly, accelerated depreciation coefficients 3 are applied to property acquired on lease, while
in the case of a purchase on credit, the company calculates the usual depreciation.
Finally, leasing allows you not to distract from the turnover of large sums necessary for the purchase of equipment or transport. Upon agreement with the lessor, it is possible to develop a flexible payment schedule, as well as obtain an extended lease agreement for a period of up to 6 years for equipment with a long payback period.
