How to automatically improve your cash flow

Leasing

Leasing your capital assets means maintaining your liquidity. And that is essential to keep investing and growing. Leasing is possible up to 100% of the purchase value. Your repayment obligations run directly proportional to your cash flow. Moreover, it can give you tax benefits.

What is leasing?

What is leasing? The meaning of leasing is as follows: financing capital goods. It is a form of credit. You lease a capital asset from the leasing company for a predetermined fee per month and for a predetermined period of time. You become the immediate owner of the capital asset or have the option to purchase the asset at the end of the contract.

In the Netherlands, leasing as a form of financing ranks second in business in terms of volume. No less than three quarters of all leasing is done by SMEs. With good reason, leasing is a form of financing you cannot ignore.

What can you lease?

Business-wise, you can lease a multitude of capital goods these days. These include:

Forms of leasing

The two main forms of leasing are:

Financial lease
Financial lease is a form of credit. The leasing company buys the asset. You lease the asset from the leasing company and pay a fixed monthly amount for a predetermined period. You are the direct owner of the asset and thus also bear the economic risk, as well as possible tax benefits such as investment deductions.
Operational lease
Operational leasing is a form of renting. The leasing company owns the asset (both legally and economically). You have the right to use it. You can also include maintenance, repairs and insurance in the contract. You pay extra for these. At the end of the term, the asset basically goes back to the leasing company. You can also buy it at the then current market value or at a pre-agreed price.

What does leasing cost?

Financial lease is cheaper than operational lease. The latter is more expensive because the leasing company runs more risk. Operational lease is therefore also more expensive than a traditional loan from the bank. However, you get something in return: convenience and less risk.

What can you lease?

Object funding to 100%.
You pay a fixed amount per month.
Your working capital remains intact.
Direct revenues after contract commences.
No unnecessarily heavy repayment obligations through an acceptable term, related to the earning power of the means of production.
Convenience. The leasing company is responsible in case of necessary repairs or wear and tear.
You stay competitive. In the case of capital goods that develop quickly technologically, you can keep up quickly and easily.
Increase your independence from your existing bank or lender.

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