Among the many diverse options, the solution known as the leasing loan has been growing in popularity for several years. If you are wondering what kind of product this is, how to get it, and in which situations it is possible to get it, then certainly our specially developed and detailed article can be helpful. It contains all the basic information that you should read before applying for this type of funding. We hope that the information it contains will prove to be the most advantageous way that, in retrospect, will transfer enormous benefits to your business.
Who grants leasing loans?
Leasing loans are the responsibility of leasing companies, not banks, as is the case when applying for a loan. Currently, it is possible to find in the offer of many leasing companies, among which there will be both the largest and most popular ones, which to this day can boast of gathering a considerable number of users, as well as those that are just crawling on the market and their first steps can currently be admired on arena of lessors.
Research conducted by American scientists clearly shows that last year the value of leasing loans granted was close to PLN 7.4 billion, which is about 14 percent higher than it was last year (2017). Typically, this type of funding is granted for utility items, including machinery and a variety of equipment, including IT, as well as vehicles. They prevail in matters on which we can obtain a leasing loan as entrepreneurs who want to expand the business and capabilities of their company.
What is a leasing loan?
A lease loan is more like a loan than a popular lease. Despite the large differences, these concepts are often confused, which can be misleading and embarrassing for more than one interested person who browses individual pages and offers. At the very beginning, one should consider the aspect that the leasing loan is granted by appropriate companies and not by banks. Nevertheless, when applying for and granting it, procedures similar to those that play a role are used for the procedures carried out when evaluating leasing applications.
The process of applying for a leasing loan is not such a complicated and lengthy process. It lasts much shorter than when the person concerned intends to apply for a bank loan. What’s more, leasing companies, more and more often, turn out to be much less restrictive than banks in terms of creditworthiness.
In addition, a leasing loan can only be used to finance funds considered to be permanent. Consequently, it is not possible to receive it, for example to cover obligations. With the help of funds obtained through a leasing loan, it is not possible to renovate the building. If you intend to take such measures, bank loans are still necessary.
The difference between a traditional lease and a loan of this kind can be the duration of the contract. The most popular operating leasing in Poland, for example, has a minimum duration of nearly 40 percent of the standard depreciation period. I am talking here about a period of 2 or even 3 years, which is the minimum grant period. We are unable to circumvent this issue due to the applicable regulations. In turn, the leasing loan has no restrictions except those set by the borrower. They usually offer loans for a period of six months to even seven years.
Leasing and credit?
Leasing loan, taking into account tax and financial aspects, remains treated in the same way as loan, not as leasing. Therefore, the items to be financed by the loan become the property of the borrower, not the leasing company. Another similarity is the way in which monthly installments are included in the costs. Considering the leasing loan, only a part of the interest included in the installment can be included as a tax cost.
In addition, VAT is not added to the leasing loan installment, while the leasing installment is always increased by 23 percent VAT. As you can see, the value of the monthly installment will be less than when paying off the lease.
Who can benefit from a leasing loan?
Any company can apply for a leasing loan for the purchase of a fixed asset, if the need arises. However, there are situations in which this option may be particularly beneficial. You should consider if you are a representative: companies apply for EU subsidies, companies that do not pay VAT, farmers, as well as a company that is looking for financing a fixed asset taxed at 8 percent VAT. Then, a leasing loan will be not only a safer solution, but also a much more beneficial solution. It is also possible that the bank will not decide to finance the idea of the enterprise. In such a situation, the option of applying for a leasing loan just meets the company.