Leasing - what is it? The concept of "leasing" comes from the English "rent." In Russia, this term is understood as the type of investment activity related to the acquisition of property and its further transfer to individuals or legal entities on the basis of an agreement for a certain period of time for a certain fee and on the conditions stipulated by the agreement, with the possibility of redemption by the lessee of this property. In other words, leasing is a type of entrepreneurial activity that is aimed at investing finance in the purchase of property and the transfer of purchased property for rent.
There are different types of leasing. By the terms of use of the property and depreciation terms, such types as leasing with full or incomplete payback are distinguished.
Also, this concept is divided into types depending on the duration and form of organization of transactions, features of the objects of the contract, the amount of obligations of the parties, types of payments, market sectors and so on.
Financial leasing includes operations for the special purchase of property and the subsequent transfer of this property for use and temporary ownership for a period that is closer in duration to the life of the equipment. During the term of the contract, the value of the property is returned to the lessor. In addition, he makes a profit from the transaction through lease payments. The lessor buys the property specifically for the purpose of transfer, and not for its use, and the lessee has the right to choose.
There are various types of leasing of this type. Classical financial leasing is characterized by the tripartite nature of the relationship, as well as a full refund of the value of the property.
Return leasing is a two-way transaction. Its peculiarity lies in the fact that the lessee is at the same time a seller of equipment, that is, the owner sells the property of the company, but at the same time enters into a leasing agreement for this property.
Leverage or leasing involving additional fundraising is more complex. It involves multichannel financing and, as a rule, is used to implement projects that require very large funds. A distinctive feature of this type is that when buying equipment, the lessor pays only part of the cost from its own funds. He takes the missing part from the creditors. However, the lessor enjoys tax benefits calculated according to the full cost of the equipment. Another feature is that the lessor receives a loan on certain conditions, which is not very characteristic of Russian financial and credit relations.
Also, types of leasing include such a thing as sub-leasing. Often, leasing is carried out through an intermediary, and not directly. That is, there is a main lessor leasing equipment through an intermediary. In the event of bankruptcy or insolvency of an intermediary, payments will be received directly to the main lessor.
There are other types of leasing. Operational leasing is used for short-term equipment rental, when the life cycle of the manufactured product significantly exceeds the lease term. As a rule, the duration of transactions for this type of transaction is less than three years.
The growing popularity of operating leases is due to the fact that landlords are interested in using new opportunities in the field of off-balance sheet financing and reducing risks associated with reduced payments and residual value.
In Russia, this market has not developed too well, and the cost of leasing is quite high. In addition, there are almost no good companies in the country that can provide quality service to rental facilities. The most common is net leasing, when the lessee is responsible for all the services.