Pros and cons of leasing when purchasing property by legal entities and individuals

The accounting of leasing transactions for the organization that is its recipient (the property is contained on its balance sheet) does not have any special differences. The main regulatory documents regulating the relationship between the lessor (leasing company) and the lessee, as well as their accounting:

1. Law of the Russian Federation No. 164-FZ of October 29, 1998 (hereinafter referred to as the Law on Leasing);
2. instructions on displaying leasing transactions in accounting, approved by Order of the Ministry of Finance of the Russian Federation No. 15 dated February 17, 1997 (hereinafter referred to as the Instructions);
3. current PBU (orders of the Ministry of Finance).

In accordance with the leasing agreement, the lessor is obligated to acquire ownership of specific property from a specific seller and, for a fee, transfer it to the leasing recipient for a specified time (Law on Leasing - Article 2, paragraph 4 of Article 15).

The leasing agreement establishes the amount, method of implementation and frequency of payments (Leasing Law - clause 2, article 28).

If we talk about the leased asset transferred to its recipient, then by mutual agreement it can be taken into account in the balance sheet of any party (Order of the Ministry of Finance No. 15 of December 17, 1997 - clause 2), and its price is formed either taking into account or excluding the redemption value (Law on Leasing - clause 1, article 28).

What is leasing

Leasing for individual entrepreneurs is a type of financial service that finances the purchase of a car, equipment, real estate or equipment.

This is done by a leasing company, which purchases funds from the seller and transfers them for use to a third party; the seller is chosen by the end user of the service.

The main feature of leasing is the ability to reduce the final price, which is facilitated by depreciation - a certain amount is reduced every year. Leasing provides accelerated depreciation, which eliminates additional payments at the end of the transaction.

Movable and immovable property is subject to leasing: cars, equipment, apartments, enterprises. Leasing does not apply to land and natural objects.

Types of leasing

1. Financial - relationships between partners who have entered into material agreements. After the expiration of the contract, you can purchase the object.
2. Operational - lease relationship without the right to purchase. The duration of the relationship is from a month to 3 years.
3. Returnable - a transaction for the sale of goods between the seller and the buyer is carried out subject to further rental of the goods by the buyer to the seller.

Stages of a leasing transaction

1. Choosing a leasing company.
2. Study of the lessor's conditions.
3. Signing the contract.
4. Payment of the first installment is 5-20% of the amount.
5. Receipt of property for use according to the agreement.

Note!

During the leasing period, insurance and maintenance payments must be made every month.

What is more profitable: loan or leasing?

• A loan is issued for any purpose, and leasing is issued for business development.
• With a loan, the bank controls expenses; with leasing, there is no control, since the property belongs to the lessor.
• When taking out a loan, the bank requires a guarantor or collateral; leasing takes the purchase itself as collateral.
• Property purchased on credit immediately goes on the balance sheet of the object, and during leasing it can be on the balance sheet of the lessor or recipient.
• The loan affects the borrower’s banking history, limiting the possibility of taking out another loan. Leasing is arranged through a company, allowing you to take out a loan.
• Loan debt can lead to bankruptcy. Under the terms of the lease, the leased property, and not other assets of the company, will be seized as debt repayment.

What is the difference between leasing and rent and credit?

So why is it needed, leasing? It may be worth taking out a regular loan and buying, or taking out and taking a long-term lease.

Let's look at the advantages of the lysine agreement:

1. Availability. As a rule, leasing terms are more democratic than credit terms. In addition, they can always be improved by purchasing the leased asset.
2. Interest rates . Their values ​​are lower than similar indicators of interest rates on loans. This is due to the specific terms of the contract.
3. Reducing financial costs. There are no obligatory financial payments associated with the ownership of property, provided that it is the subject of a leasing agreement.
4. Tax reduction. Enshrined in legislation, a reduction in taxation rates for enterprises that are parties to a leasing agreement.
5. Flexible contract format . The absence of a rigid contractual framework allows you to create unique contract configurations that meet the requirements of each of the parties to the transaction.
6. Ownership . Needless to say, the ownership rights belonging to the party providing leasing services are of great importance.

Legal regulation of leasing in the Russian Federation

To regulate the terms of the contract in the Russian Federation, there are several legal norms:

• Civil Code of the Russian Federation - part 2, chapter 34;
• Federal Law No. 164 “On financial lease (leasing)”;
• Tax Code of the Russian Federation Chapter 25 “Organizational profit tax.”

Real estimate of calculation of leasing payments

To calculate the lease payment, you must use the following formula:

AI + KR + N + DU + VAT, where:

• AI - depreciation of property;
• KR - payment for credit resources that the lessor took for use from the bank;
• N - rewarding the lessor for providing the service;
• DU - additional services that are defined in the contract;
• VAT - value added tax. As of 2020 - 20%.

Leasing for individual entrepreneurs

Leasing for an individual entrepreneur is a quick way to provide a business with the necessary property with a minimal investment of funds. To do this, you need to have a profitable enterprise, the profit from which will be enough to repay the lease payment.

One of the main advantages of leasing is the absence of taxes on leased property, which allows you to scale your business in a short time without increasing the cost of maintenance.

The lessee is not the owner of the property until its full redemption, if this is provided for in the concluded agreement.

Note!

If regular payments are missed, the lessor has the right to confiscate the property without refund. If the lessee has paid more than 50% of the cost described in the contract without taking into account the commission, then he receives compensation: the difference between the balance of the debt and the market price of the property.

If the leased property is damaged, the responsibility for restoring it rests with the lessee. Regular payments are mandatory, even in the event of liquidation of the individual entrepreneur.

Design features

The main difference between leasing is depreciation. The company leasing the property can buy it after a few years at a low real cost, taking into account wear and tear.

Upon payment of the amount specified in the contract, the property becomes the property of the lessee. The deal is concluded between three parties:

1. The seller is the original owner of the goods.
2. The lessee is the final owner of the product.
3. The lessor is an intermediary in the transaction. Takes credit resources from the bank, purchases goods and transfers them to the customer in exchange for regular payments and commissions.

Leasing conditions for individual entrepreneurs

To enter into an agreement with the lessor, the lessee must:

• reach the age of 21;
• have a registered individual entrepreneur;
• engage in production activities for at least six months;
• make a profit from the enterprise for at least the last 3 months;
• the profit received must cover the lease payment.

Car leasing for individual entrepreneurs

An individual entrepreneur has the right to lease a car by following these steps:

1. Determining the required model that will meet the needs of the enterprise.
2. Review of current offers from leasing companies. Each organization provides different conditions with different commissions, amortization payments, etc.
3. Collection of documents for execution of the contract.
4. Submitting reports to the selected company to assess solvency.
5. Waiting for the lessor to purchase goods from the seller.
6. Receiving property.

Differences between car leasing and car loan

The key difference between leasing and a loan is the right to own property. In the case of a car loan, the lender does not own the goods. Its function is to provide resources based on collateral. If the customer defaults on regular payments, the lender can only repossess the property if legal standards are met.

Note!

In the case of leasing, the owner of the goods is the lessor, which makes it possible to effectively collect funds from the lessee, guaranteeing the preservation of assets.

Companies ask the Central Bank for relief

Following almost all sectors of the economy, lessors started talking about state support. They ask to give banks the opportunity not to create reserves for the debt of leasing companies that have undergone restructuring. Thus, credit institutions will not shift their losses onto their shoulders. The Central Bank has so far only mentioned support for lessees, without paying attention to the companies themselves.

Leasing companies (LC) are asking the government to help the leasing industry in the context of the spread of coronavirus infection and to include a package of measures to support it in the government’s anti-crisis package. This follows from a letter from the Leasing Union NP addressed to First Deputy Prime Minister Andrei Belousov, as well as a letter from the United Leasing Association addressed to Mikhail Mishustin (Kommersant has reviewed the documents).

In relation to lessees, companies are asked to provide targeted subsidies to compensate for leasing payments in industries most affected by the economic impact due to the spread of coronavirus infection, increasing the budget of existing preferential leasing programs, as well as adding new transport directions to these programs.

Leasing companies should be supported through measures that can offset possible temporary refusals of lessees to fulfill their obligations.

In addition, the companies propose that the Central Bank soften the requirements for banks to create reserves for possible loan losses in the event that they apply to restructure a previously issued loan. “Due to the inability of a number of lessees from industries affected by the coronavirus to make payments under leasing agreements... the lessor may find itself in a cash gap situation,” says Dmitry Ivanter, CEO of VTB Leasing Group. Since the restructuring is obviously forced, the credit institution must create reserves for possible loan losses in the amount of up to 100% of the loan. “Through a rate increase, restructuring fees, fines and other instruments, the bank will be forced to shift losses to the LC itself,” notes the top manager.

Automakers ask authorities to support demand for cars with car loans

Earlier, Central Bank Chairman Elvira Nabiullina spoke about possible support for lessees. “We would propose to extend this program (credit holidays. - Kommersant"

) and for leasing transactions,” she noted. Because, according to her, “many small and medium-sized businesses use equipment purchased on lease.” However, there was no talk of supporting lessors. The Central Bank did not respond to Kommersant’s request.

“We are observing a decrease in demand, a deterioration in payment discipline,” notes Rustem Mukhamedov, general director of Region Leasing.

According to him, leasing is, first of all, “a tool for financing the renewal of fixed assets of enterprises,” and in difficult periods, companies reduce investment programs. “For a number of leasing companies, this situation can lead to serious problems, including the inability to continue business,” notes Mr. Ivanter.

The Ministry of Finance believes that the regulator of the leasing industry should be the Central Bank

“Mitigating funding” by banks is a common regulatory measure that does not require taxpayers’ money, notes Alexander Mikhailov, CEO of Europlan LC. “With the introduction of the proposed relaxations on the part of the regulator, banks will take a more loyal approach to restructuring; it may be possible to avoid a situation where the bank is forced to refuse due to regulatory requirements, pressure on capital, which ultimately can lead to a chain of defaults of both LCs and and lessees,” says Mr. Mukhamedov.

According to bankers, the issue of restructuring is still premature, since leasing companies are now analyzing portfolios to determine the lessee’s ability to fulfill its obligations under the influence of the current situation. According to Olga Chebaevskaya, director of the sales department for corporate clients of PSB, “based on the results of this assessment and depending on government support measures, a discussion about the need for any action is already possible.” However, she notes that changes “in reserve requirements will have a positive impact on the terms of the restructuring.”

Ilya Usov

Advantages and disadvantages of car leasing for individual entrepreneurs

Advantages:

• no hidden fees;
• delegation of advocacy to the insurance company;
• the initial payment for leasing for individual entrepreneurs and legal entities is smaller compared to a loan;
• All maintenance of the car is undertaken by the lessor.

Flaws:

• higher interest rate for individuals;
• limited maximum leasing period;
• high one-time fee.

Terms of car leasing for individual entrepreneurs

To receive a car, an individual entrepreneur must be registered no earlier than a year ago, and also have a positive growth trend in the profitability of the enterprise over at least the last 3 months.

Package of necessary documents

• application for leasing;
• financial statements;
• reporting monthly earnings;
• business plan for individual entrepreneurs;
• passport;
• document on state registration of the enterprise for individual entrepreneurs;
• TIN;
• reporting from the Unified State Register of Individual Entrepreneurs.

Car loan

This is a popular type of consumer lending. Peculiarities:

• This is a targeted loan: the money can only be spent on buying a car.
• This is a secured loan: the car remains pledged to the bank until the loan is repaid.

Legal regulation of car lending is carried out by the Civil Code (Chapter 42), the Law “On Banks and Banking Activities” (dated December 2, 1990), the Law “On Consumer Credit (Loan)” (dated December 21, 2013) and other regulations.

There are various loan programs for buying a car:

1. “Classics” (More details below);
2. Express loan: simplified application procedure, but high interest rates;
3. Loan with buyback (BuyBack): part of the loan is “frozen” and paid at the end of the contract either by the borrower himself or by the car dealer, subject to the proceeds being credited to the purchase of a new car;
4. Trade-in: exchange of an old car for a new one with an additional payment. The cost of a used car is offset by the cost of a new one;
5. Factoring (interest-free loan): 50% of the cost of the car is paid, the rest is paid in installments;
6. Loan without a down payment: When lending from a car dealer, the lack of a down payment can be a bonus.

In addition, we can talk about loans for used cars and loans without insurance as separate areas.

Most often they resort to classic car loans. Let's look at its diagram.

You want to buy a car. There is no money for a new “iron friend”. You contact a bank or a credit broker.

Car dealers can also act as lenders. They provide loans from their own funds or cooperate with banks.

You choose a bank (or car dealer), study the lending conditions. Having decided, fill out the form and collect documents. The bank must make sure that you can repay the loan (solvency) and that you have no other debts (credit history). For several days, the bank thinks about whether to issue a loan or not.

If the decision is positive, the bank and the borrower (now you) enter into an agreement. It specifies the term, interest, down payment, rights, obligations and responsibilities of the parties.

You are buying a car. Sometimes banks recommend a specific car dealer, sometimes they build cooperation with a dealership chosen by the client.

All the hassle of car registration falls on your shoulders. Also, most often, the loan agreement provides for insurance at the expense of the borrower. And not only OSAGO, but also CASCO.

You are a happy car enthusiast! The main thing is to carefully repay the debt and not to forget that although you are the owner, the car is pledged to the bank. You have no right to sell, give or exchange it. And if difficult times come and there is nothing to pay on the loan, the bank (car dealer) will take your “swallow”.

A car loan as a financial instrument has its advantages and disadvantages.

Pros:

• You can have a car without having capital. Few people can buy a car for cash, but saving for a long time does not always work out.
• Big choice. You can buy what you like, and not what you have enough money for.
• A variety of lending programs: you can choose the most profitable one for yourself (with a minimum term or, for example, without long registration).

Minuses:

• Complicated registration procedure. Strict requirements for the borrower.
• Rising car prices. You will have to pay interest and compulsory insurance.
• Car deposit.

The loan agreement implies repayment of the loan amount along with interest. The vehicle becomes the property of the borrower after the loan is fully repaid.

A lease involves making payments while the lease agreement is in effect. After the end of the contract, the transport will be returned to the lessor.

Financial use combines the functions of these two agreements. In addition, the participant is an organization that supplies transport.

Real estate leasing for individual entrepreneurs

Leasing opens up the opportunity for enterprises to purchase commercial real estate and large workshops for a minimal overpayment.

Conditions for purchasing premises on lease

In case of purchasing real estate on lease, the business must be registered for at least a year before the conclusion of the contract. A deal can be concluded only in the case of positive profit dynamics, the size of which is at least 10% higher than the planned regular payment.

How to buy real estate on lease

Action algorithm:

1. Decide with the lessor.
2. Select a developer, house, apartment.
3. Report the selected premises to the leasing company for solvency and real estate assessment.
4. Making the first payment, approximately 10%.
5. The lessor buys an apartment from the developer.
6. Signing the contract and receiving the property at your disposal.

Requirements and documents for applying

To enter into an agreement with a leasing company, the following requirements must be met:

• age 21-65 years;
• search for a guarantor in case of an initial payment of 0%;
• package of documents: passport;
• a copy of the marriage certificate;
• a copy of the child's birth certificate;
• income certificates to confirm solvency;
• certificate of family composition;
• certificate of persons living with the lessee.

What kind of real estate can be registered

Lessors offer to rent townhouses, cottages, apartments, and for individual entrepreneurs you can lease a garage, office, warehouse.

Transaction participants

The agreement is a complex transaction and involves several parties.

3 main participants in the transaction

1. The role of lessors is played by credit institutions. While the agreement is in effect, the bank remains the owner of the property. The bank is an intermediary between the buyer and seller of the car. Organizations carry out leasing activities as a leading line of business. As a rule, the company makes a choice in favor of one property for rent. Clients receive a full range of services for the service.
2. Leasing recipients are companies that want to buy a car. Companies pay to operate the car. At the end of the agreement, there is a low cost to pay.
3. The seller is the owner of the vehicle. He enters into an agreement to purchase a car with a leasing company.

In addition to the main characters of the agreement, there are additional participants. These include lenders, guarantors, and contractors. Companies that service equipment also take part.

Scheme of the agreement

With the help of a financial lease agreement, you can buy transport, as well as expensive equipment.

Thus, a financial lease agreement allows the company to solve problems with the acquisition of equipment and transport.

Leasing of equipment for business

Leasing allows you to take the necessary equipment for the premises and operation of a business without investing a lot of money.

Conditions for purchasing equipment on lease

Before concluding an agreement, a legal entity or individual entrepreneur must submit documents confirming the solvency of the enterprise. The service will not be approved if the organization has shown a loss over the last three months, or if the business was registered less than six months before the transaction was executed.

How to buy equipment on lease

To complete the transaction, you need to select the necessary equipment and choose a suitable offer from the lessor. The latter buys the goods from the seller and provides them to the lessee on the basis of regular payments and a one-time advance payment, the amount of which can reach 30%.

An entrepreneur can purchase refrigerators, devices for baking bread, making confectionery products, sewing machines, and medical equipment on leasing terms.

Leasing for legal entities: pros and cons

Advantages of leasing for a legal entity

1. The main advantage of leasing for legal entities is the acquisition of property for a fee. After the end of the loan agreement, you have the right to buy the property for a fee.
2. The next advantage is minimizing the number of documents and simplified lending.
3. Small payment. A fixed payment is established when signing a loan agreement and allows you not to invest your own savings in the cost of the car.
4. The variety of types allows each legal entity to choose what it needs. With leaseback, the organization receives funds equal to the value of the car on the market.

Leasing for legal entities: pros and cons.
Among the general advantages that also apply to legal entities, the following are distinguished:

1. Each lessee has the right to choose a car independently.
2. Everyone becomes a participant in affiliate programs and receives a subsidy.
3. Registration is done by the lessor.
4. The fixed payment includes the cost of insurance and tax.
5. The lessor provides technical support services.
6. Replacement of the car if necessary by the lessee.

Disadvantages of leasing legal entities

1. The disadvantage is the overpayment for purchasing a car.
2. Deterioration of the properties of the machine during its operation.
3. Registration of a CASCO insurance policy.
4. Decrease in the market value of the car by the end of the contract.
5. A car is not the property of an enterprise, and it cannot fully dispose of it.