According to the leasing agreement

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Another significant difference between leasing and a loan for business is the absence of tax preferences for the latter loan format. For example, an entrepreneur who has leased any object can return 20% of VAT. And taking into account savings on income tax and property tax (until the full redemption, the leased item is not listed on the malta whatsapp number data balance sheet of the lessee), all 40%. Therefore, for SMEs, a leasing agreement is more profitable than a loan.

How does leasing differ from a loan in simple terms? Leasing is a target product. That is, specific goods are purchased under financial lease: vehicles, special equipment, equipment, commercial space (retail space, warehouses). A loan, in turn, is a more general product that a business can take, including to replenish working capital or pay off other loans. Unless we are talking about purchasing a car on credit.

A car loan for the borrower differs from a leasing transaction in that it is more complex to formalize. Because in the case of a loan, almost all risks fall on the bank, and when buying a car, the financial institution leaves it as collateral. And in the process of its registration, the presence and participation of a bailiff will be required. Moreover, it is almost impossible to recover collateral in the event of bad faith fulfillment of loan obligations by the borrower in some cases. For example, in case of default .
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If you are late with your monthly loan payments, even for one day, fines and penalties will be charged. But if you do not make payments for more than a month, the bank may transfer the responsibility for debt collection to collectors.

The maximum risk of the lessee is to lose the property that was put into operation immediately after the financial lease transaction was executed. In rare cases, the lessor can receive financial compensation for late payments. And this is also a beneficial difference between leasing and credit.