Dear professionals, you know better than anyone: investing in quality equipment is essential to remain competitive. But have you thought about leasing? This little-known financing solution offers many advantages for companies, craftsmen and retailers. Let's find out why leasing could well become your best ally!
What exactly is leasing?
Leasing, also known as financial leasing or rental with purchase option (LOA), is a contract for the rental of an item of equipment, with an option to purchase it at a later date. In concrete terms, you rent equipment for a fixed period, in return for monthly payments. At the end of the contract, you can decide to buy the equipment, return it, or renew the lease.
Leasing covers a wide range of professional equipment:
- Utility and company vehicles
- Computer and office equipment
- Industrial machinery and tools
- Medical equipment
- Security and video surveillance systems
There are different types of leasing contracts to suit your needs and situation:
Financial leasing
Also known as financial leasing, this is the most common form of business leasing. It is aimed at companies wishing to finance capital goods over a long period (usually 3 to 7 years). At the end of the contract, you can exercise the purchase option for an amount fixed in advance, generally between 1 and 5% of the initial value of the asset.
Operational leasing
This formula is particularly suitable for fast-obsolescing assets, such as IT equipment or vehicles. The term of the contract is shorter (1 to 5 years), and rents often include additional services such as maintenance or insurance. At the end of the contract, you can return the asset or renew it, but there is no purchase option.
Leasing with purchase option (LOA)
Very popular for business vehicles, the LOA is similar to a conventional loan, but with greater flexibility at the end of the contract. You can choose to acquire the vehicle for its residual value (fixed at the time of signature), return it, or renew the contract to start again with a new vehicle. Ideal for companies who want to control their car budget over the long term.
Why are more and more companies choosing leasing?
Leasing is all the rage because it offers a number of advantages over buying. Judge for yourself:
Preserve your cash flow
By opting for leasing, you avoid tying up a large sum of money in the purchase of expensive equipment. Your rental payments are smoothed out over time, allowing you to manage your budget with greater peace of mind. Ideal for companies starting up or going through a difficult period!
Access to the latest technologies
Leasing puts an end to obsolete equipment that puts a strain on your productivity. You can renew your equipment on a regular basis to stay at the cutting edge of innovation. This is a major advantage in sectors such as IT and security, where technology is evolving at breakneck speed.
Video surveillance cameras
The latest generation of IP cameras offer advanced features such as behavioral recognition, motion detection and people counting. By renting them, you can benefit from these cutting-edge technologies without breaking the bank, while keeping up to date with the latest security standards.
Simplify your equipment management
With a leasing contract, the lessor takes care of maintenance and repairs. No need to run to the breakdown service or deal with unexpected breakdowns. You can concentrate on your core business with complete peace of mind.
Tax benefits of leasing for professionals
In addition to its practical advantages, leasing offers significant tax benefits for companies:
Rent deductibility
Lease payments are considered as operating expenses, deductible from taxable income. In practical terms, this means you can reduce your profit, and therefore your corporation tax.
The tax deductibility of lease payments is capped at €18,300 per vehicle per year, or €9,900 if the vehicle has CO2 emissions in excess of 200g/km.
A positive impact on the balance sheet
By opting to lease rather than buy, you preserve your equity capital and your debt capacity. In fact, the assets financed by leasing do not appear on your balance sheet as assets, unlike those acquired with conventional credit. This gives your company a healthier financial structure, which can make it easier to obtain loans or convince potential investors.
Be careful, however, not to over-indebt yourself: even if rents do not appear as debts on your balance sheet, they do represent a long-term financial commitment. So it's a good idea to assess your repayment capacity before taking the plunge.
Welcome accounting flexibility
With a leasing contract, you can adapt the amount and duration of your rental payments to your financial situation and needs. For example, you can opt for progressive rents if your business is growing, or on the contrary, degressive rents if you anticipate a drop in income. Similarly, you can align the term of the contract with the asset's accounting or tax depreciation period, to optimize your balance sheet.
Finally, leasing allows you to smooth out the cost of acquiring an asset over several accounting periods, rather than incurring a large one-off expense. A valuable asset for managing your cash flow and stabilizing your results.
VAT deferral
Another tax advantage of leasing: you can reclaim the VAT on your rental payments over the duration of the contract. This is a great advantage for your cash flow, especially if you are subject to VAT on debits.
TVS exemption for certain vehicles
Good news if you lease business vehicles: some are exempt from company vehicle tax (TVS). This applies to commercial vehicles and vehicles with more than 9 seats, as well as those that run on E85 super-ethanol, LPG or electricity.
For non-polluting vehicles, the TVS exemption only applies for 2 years.
What equipment should I rent rather than buy?
While leasing can be applied to a wide range of equipment, some are particularly well suited to it. Here's a quick roundup of the essentials:
Computing and office automation
Computers, printers, servers... IT equipment is the big winner of leasing. By leasing, you can renew your equipment regularly without breaking the bank, and benefit from an included maintenance service. You'll save yourself a lot of hassle every day!
Commercial and company vehicles
Car leasing is very popular with companies, and for good reason: in addition to the tax advantages, it allows you to drive around in recent, well-equipped vehicles, without worrying about resale. Ideal for sales people or craftsmen who need a reliable utility vehicle.
Safety equipment
Cameras, anti-theft gates, alarm systems... Security equipment is constantly evolving. By renting them, you can benefit from the latest cutting-edge technology, while spreading the cost over time. A must for securing your premises without breaking the bank.
Industrial and construction equipment
Backhoes, loaders, cranes, compressors... Construction equipment represents a colossal investment for construction companies. By leasing them, you can benefit from the latest high-performance equipment without tying up your cash. Contracts generally include servicing and maintenance, to avoid the costs associated with breakdowns and wear and tear.
Medical equipment
MRI, CT scanners, mammography machines... Medical equipment costs a fortune and is evolving fast. To stay on the cutting edge without breaking the bank, many healthcare professionals opt for leasing. This enables them to renew their equipment regularly to keep pace with technological advances, while spreading out the expense. Lease payments often include a maintenance contract, for total peace of mind.
Agricultural machinery
Tractors, combine harvesters, forage harvesters... Farmers need reliable, high-performance equipment that costs a lot to buy. Leasing gives them access to the latest technology without depriving them of their assets, and with the possibility of renewing their fleet on a regular basis. In the event of a change in their activity or UAA, they can also adapt their contract to meet their new needs.
How can Finalease Group Security help you?
Are you attracted by the advantages of leasing, but don't know where to start? At Finalease Group Security, we're here to help.
Drawing on our 30 years of experience in the security of goods and people, we offer solutions tailored to your business and your needs. Our offer includes
- A free audit to assess your security equipment needs
- Flexible leases, with an average term of 5 years
- Top-of-the-range equipment: IP cameras, access control, anti-theft gates...
- Maintenance and support included
- Remote installation and management via a mobile application
With Finalease Group Security, you can secure your premises and businesses with complete peace of mind, without tying up your cash. Our experts are at your disposal to study your project and propose the most appropriate solution.
So, are you ready to take the leasing plunge? Contact us to take advantage of our current offers!
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