How does a leasing work?

Leasing a form in which a financial entity acquires an asset in its own name and assigns its use and use for a fixed period of time, either in the medium or long term. The customer pays a periodic fee composed of capital and interest for the use of the asset and at the end of the term can exercise the call option.

The financial entities will be the LESSOR and the clients, whether natural or legal persons, would be the LESSEE.

At the end of the lease contract, the user decides whether to purchase the property, renew the contract or return it to the financial entity. The most important types of leasing are:

• Financial Leasing: It is a lease with option of acquisition to a certain term.

• Operational Leasing: It is a lease without option of acquisition.

Advantages of leasing

• You can finance 100% of the value of assets.

• You can get important tax advantages.

• Speed in the technological renewal of assets.

• Investments in assets that can be devalued rapidly and are difficult to sell, such as computers, are avoided.

• No down payment required.

Considerations

• During the time of the contract the entity that provides the leasing service (lessor) is the owner of the property, but not responsible for any kind of damage, deterioration or loss of the property.

• Inspections on the property may be required.

• The agreed fee to be paid includes interest and commissions.

• The tenant is responsible for the maintenance of the leased property.

Some examples of goods that can be financed through leasing:

· Real estate: Offices, premises, warehouses, industrial plants, among others.

· Technology: Tablets, printing equipment, hardware and software.

· Vehicles: for transport of cargo and passengers, private.

· Productive equipment: such as industrial machinery or specialized equipment.

· Housing: Allows to acquire new housing, used or on plans.

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Key words:

Leasing, Financial Figure, Bank, Tool, Relocation, LARM.

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