Who is leasing for?
It can be seen that more and more private individuals are being attracted to leasing. This can be seen very well in the area of smartphones, for example. The best model is available for less than 20 euros a month. Leasing is also becoming increasingly popular in the field of vehicles, because the leasing rates are often less than 100 euros . This offer is used very often. You seldom do the calculations and therefore in many cases you don’t notice that such a leasing offer is actually more expensive than a loan from the bank. In the private sector you can now rent almost everything. From exercise bikes to laptops and furniture. Most often, however, private individuals still use car leasingUse. As a rule, terms of between two and four years are agreed. Then you return the vehicle or you can buy it in full against payment of the remaining value. However, it is often overlooked that you cannot claim the vehicle for tax purposes against your activity as an entrepreneur. Car leasing only makes sense for private individuals from the following points of view.
- You need a new car every two to four years
- Before a vehicle has to constantly go to the workshop, it is returned
- You use your car very often
- You do not have enough equity to buy a new car and you only want to buy the car after the contract has expired.
Leasing is different for you as an entrepreneur. As an entrepreneur or self-employed person, you naturally always strive to keep your tax burden as low as possible. Leasing offers you some very interesting options for this. If you acquire property completely, for example through purchase, then this also has a direct impact on your balance sheet. A leasing object, on the other hand, is to be seen as balance sheet-neutral by the legislator . That means it doesn’t count towards your company’s assets. And so it doesn’t appear on your balance sheet either.
Tip!
Another important aspect is that you can also claim the leasing installments as operating costs against the tax. Another great way for you to cut your tax burden a lot.
Another important aspect for you as an entrepreneur is that you can also claim the leasing installments as operating costs from tax. Another great way for you to cut your tax burden a lot.
What projects is leasing suitable for?
Leasing is particularly suitable for you as an entrepreneur in some points and areas.
| Leasing project | description |
| Equipment leasing | This form of leasing is a project for mobile capital goods or investments in equipment. These can be machine tools, for example, but also production systems, IT systems, commercial vehicles, etc. Basically everything that can be leased. |
| Full amortization contract | This is recommended if the leased object quickly loses value. With this contract, you cover all acquisition and production costs that the lessor incurs during the rental period. However, this also means that your monthly leasing costs are higher than is the case with the partial amortization contract . |
| Partial amortization contract | Full amortization cannot be achieved during the basic rental period. Once the contract has ended, a calculated residual value is usually left open. A lessor can secure this residual value from the lessee. |
| Real estate leasing | If you need commercially used rooms, administrative buildings or halls, etc., you can also conclude contracts for real estate leasing . For a lessor, however, these contracts represent a greater risk in most cases. Therefore, contracts between you as the lessee and the lessor are usually agreed on specific individual circumstances. |
What are the advantages and disadvantages of leasing?
Above all, leasing has the advantage and reason that you can conserve your resources in terms of equity . Take the acquisition of production equipment as an example. For them you have to put down an amount that is in the millions. A big advantage for you. Nevertheless, there are also disadvantages to consider, which you should not neglect.
| Advantages of leasing |
| You will always find the latest model in your vehicle fleet or machine park |
| Leasing is off-balance sheet and saves your equity |
| You can combine many leasing contracts with inexpensive service contracts |
| In many cases, the leasing installments can be deducted from tax |
| You can design the leasing contracts individually according to your needs |
| With leasing you get a very good calculability |
| There is no need to dispose of old objects such as machines |
| If the leasing period expires, you can convert the leasing contract into a sales contract |
Then the disadvantages:
| Disadvantages of leasing |
| With leasing, you are never the owner of an object |
| In certain circumstances, leasing can be more expensive for you than a loan |
| If you do not pay your leasing installments on time, this can lead to the termination of the contract or other sanctions |
| Guarantee or warranty problems are not always easy to solve |
| In many cases, leasing contracts are tied to other services that you don’t even need. |
Who offers leasing?
When it comes to leasing, there can be several providers. The manufacturers, for example of vehicles, furniture, machines, computers, etc., are very often the providers themselves. In recent years, manufacturers have built up a further sales branch with leasing offers .
Subsidiaries of banks and leasing companies are also very active in the field of leasing providers . They buy the leased object from the provider and then offer it to you for leasing. In this case, indirect leasing is also used.
Where does leasing appear on the balance sheet?
As already mentioned several times, for you as an entrepreneur, the leased property does not appear on your balance sheet. This is because you are only a user, not an owner. By “not showing up” on the balance sheet, you improve your equity ratio . This may be fine with you the next time you apply for a loan or when looking for investors.
Conclusion
Leasing is a very interesting option, especially for you as an entrepreneur. This saves you equity and allows you to act quickly and overcome bottlenecks in production, sales, etc. However, it is important that you check a leasing offer very carefully. A leasing contract with a low leasing rate and a long contract term does not always have to be the best offer. You should pay close attention to the framework conditions. This also applies to a possible premature termination of the leasing contract, the services provided by the lessor and the notice periods. Leasing is not always ideal for private individuals. As a rule, a comparison shows that leasing is in most cases more expensive than taking out a loan.
