When using leasing to finance modernization, the company receives a number of advantages that do not arise with other forms of financing.
In practice, leasing is often the only available tool for financing when there are insufficient funds for the purchase of equipment, it provides a number of "free" benefits for the benefit of all leasing participants, which makes it more attractive and affordable.
The main advantages of financial leasing for the lessee are the following:
- 1. Accessibility of leasing, simplified procedure and fast consideration time of the leasing application.
- 2. Savings of free cash. The use of leasing allows the lessee not to "take out" significant funds from the turnover in one moment (unlike direct purchase).
- 3. A leasing transaction requires fewer guarantees than a bank loan, because the title to the equipment remains with the lessor. As a rule, no additional collateral is required.
- 4. The decision to engage in a leasing transaction is based more on the lessee's ability to generate sufficient funds to make lease payments, and is less dependent on the credit history of the company.
- 5. Payment for the cost of the equipment is tied to the funds generated by its operation.
- 6. The equipment acquired through leasing is put on the balance sheet of the company and depreciation is accrued on it, and its amount is included in the gross expenditures of the lessee.
- 7. The lessee receives a tax credit for the entire value of the leasing equipment at once.
- 8. The total amount, as well as the uniformity of lease payments, is set on a contractual basis, and they may have a non-periodic nature. Lease payments are maximally adapted to the interests of the lessee and the payback period of the investment.
- 9. Given that leasing payments are made on a fixed schedule, the lessee has more opportunities to coordinate the costs of financing capital expenditures and proceeds from the sale of products, providing greater stability of financial plans (than with dire
- 10. The company - lessee separates business and property, because the equipment purchased in leasing, can not be arrested, confiscated or be the subject of claims on the debts of the lessee under current Russian law.