Leasing and renting

From A Technological Wiki
Revision as of 20:43, 18 January 2026 by Root (talk | contribs) (Created page with "= Leasing = Leasing is a special mercantile lease for productive assets (movable or immovable) or durable consumer goods. == Characteristics == * '''Parties:''' A leasing company (or bank) and the user/professional. * '''Duration:''' Minimum 2 years for movable assets (equipment) and 10 years for immovable property (buildings). * '''End of Term:''' At the end, the user can cancel, renew, or exercise a '''purchase option''' (residual value). == Advantages == * Finance...")
(diff) ← Older revision | Latest revision (diff) | Newer revision → (diff)
Jump to navigation Jump to search

Leasing

Leasing is a special mercantile lease for productive assets (movable or immovable) or durable consumer goods.

Characteristics

  • Parties: A leasing company (or bank) and the user/professional.
  • Duration: Minimum 2 years for movable assets (equipment) and 10 years for immovable property (buildings).
  • End of Term: At the end, the user can cancel, renew, or exercise a purchase option (residual value).

Advantages

  • Finances 100% of the equipment price (standard loans often limit to 80%).
  • Payments are flexible and can be linked to the resource generation of the asset.
  • Tax-deductible rental installments.

Renting

Renting is a lease linked to assets that require maintenance or suffer rapid depreciation (e.g., vehicles, IT equipment).

Characteristics

  • Includes maintenance, insurance, and technical reviews in a single fixed monthly fee.
  • Assets can be substituted or expanded during the contract period.
  • No purchase option typically exists; it is purely a service.

Comparative summary

Aspect Leasing Renting
Balance sheet Recorded in the user's assets Not recorded in assets
Maintenance User's responsibility Company's responsibility
Purchase option Yes, explicitly in contract No residual value/option
Duration Minimum terms required (2/10 yrs) No fixed minimum term
Deductibility Installments are a business expense 100% tax-deductible installments