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Financial leasing or credit: what is more profitable?

More and more domestic entrepreneurs use financial leasing in the development of their business. Whether buying real estate, transport or equipment, companies are trying to implement it at the lowest cost to gain a competitive advantage in the market. That is why international financial leasing has gained such popularity, because often it is much more profitable than most credit schemes. More about the advantages and disadvantages, as well as the trends in the market of leasing services, you will learn from today's article.

Financial leasing is, in fact, the lease of assets with the right to repurchase them at the end of the term. The possibility of acquiring ownership of the object is precisely its difference from operational leasing. For a client, financial leasing seems much more profitable, which is mainly due to the simplified procedure for its execution. In addition, in this case, no bail is required, because the property is already owned by the leasing company. Financial leasing of cars has one more advantage: the client can pay insurance payments and make deductions to the Pension Fund in installments, which is especially important for newly created companies that have not yet managed to get on their feet.

But most of all in this form of financing of domestic and foreign customers attracts all the same the opportunity to transfer to them the right of ownership at the end of the contract. It should be noted that financial leasing involves the transfer of the object of leasing to the client for a period for which more than 75% of its initial value is depreciated. Upon termination of the contract, the enterprise pays the remaining 25% and receives the fixed assets in its ownership.

Thus, financial leasing has the following advantages over the loan:

1) leasing payments reduce the amount of income tax;

2) amortizing the subject of leasing, the lessee reduces its tax base;

3) interest and commission on the lease agreement do not need to pay VAT;

4) assets received in leasing can not be alienated by tax authorities;

5) there is no need to register a security;

6) transfer of a part of the risk to the lessor;

7) the ability to pay leasing payments at the expense of income that will be received from the operation of the leased asset.

To modern forms of financial leasing also include return and credit leasing. The first form is usually used by enterprises lacking financial means. They sell their own property to the leasing company, and then they can lease it. Thus, these enterprises receive the necessary money, for example, to replenish working capital. At the end of the contract, they can repurchase this property and use it further. As for credit leasing (leverage), it is usually used for expensive projects. In this case, the lessor uses borrowed funds when buying equipment , so the main risk is not he, but insurance companies, banks, investment and other financial institutions.

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