Leasing loan – is it worth using this option?

What is a leasing loan?

What is a leasing loan?

The use of leasing services is for Polish companies one of the most important ways to obtain funds for investments in machinery and equipment necessary to conduct business. Recently, companies providing such services have offered, apart from standard leasing, a completely different solution, i.e. a leasing loan.

The product name perfectly reflects its character, because it combines the features of credit and leasing. In fact, it is a special-purpose loan for companies for the purchase of fixed assets, which is called ‘leasing’ because of the purpose (leasing also allows financing fixed assets).

The above product was created because traditional operating or financial leasing did not meet the needs of all enterprises. The loan turns out to be a better solution when obtaining EU subsidies, as well as for companies that are not VAT payers.

We will explain these issues in the following paragraphs, in which we will also explain in more detail what a leasing loan is and what its advantages and disadvantages are.

Leasing loan and leasing – what are the differences?

Leasing loan and leasing - what are the differences?

Despite the similar purpose of both products (purchase of fixed assets), leasing and leasing loan are in fact completely different solutions, which in addition have different tax and accounting consequences.

1. The issue of ownership of a fixed asset

The main difference in the subject of leasing loan and leasing is the ownership right to the fixed asset purchased with their help. In the case of classic operating leasing, the car, device or machine remains the property of the leasing company throughout the duration of the contract.

The enterprise using the service has the right only to use the fixed asset. In turn, after taking out a loan, the entrepreneur immediately becomes the owner of the fixed asset.

2. Depreciation

The consequence of the difference regarding ownership of a fixed asset is also the right to make depreciation charges. The lessor has operating leases, while the enterprise has a loan which has bought a machine or device thanks to financing.

3. VAT

For non-VAT payers, one of the biggest benefits of a leasing loan is that VAT is not added to your monthly loan installments. In operational leasing, the entrepreneur has to pay monthly leasing installments plus VAT.

4. Leasing loan and leasing – formal issues

The method of obtaining financing and the formalities related to it are quite a significant difference. First of all, leasing requires a certain amount of own contribution, while loans allow you to finance up to 100% of your investment. When considering what is better, leasing or leasing loan, it is also worth paying attention to the duration of the contract.

In the case of leasing, it cannot be arbitrary, because the restrictions on this are imposed by the Accounting Act. In practice, it is a minimum of 2-3 years. The loan agreement can be concluded for any period – usually from several months to 7-8 years.

It is worth remembering that with a leasing loan, security is often used, such as: registered pledge, promissory note, assignment from insurance, and transfer of receivables from an EU subsidy.

Is a car leasing loan a good solution?

Is a car leasing loan a good solution?

One of the most frequently purchased fixed assets by companies is a car (passenger or delivery vehicle), which is often also the subject of leasing contracts. It is therefore worth considering whether a car leasing loan is a good idea. The use of this solution is supported by:

  • simpler procedures related to applying for a loan than for a bank loan,
  • lower requirements for creditworthiness than for loans (e.g. for freelancers loans without income certificates are available),
  • purchase of a car, not taking it into use as if leasing,
  • the option of buying both a new and used car,
  • no own contribution, which is obligatory for leasing,
  • the possibility of flexible adjustment of the loan repayment period, and thus also the amount of the monthly installment to the financial capabilities of the enterprise.

The leasing loan can be used to finance not only passenger cars and trucks, but also other fixed assets such as:

  • semitrailers, trailers, specialized vehicles,
  • machines and devices (e.g. production, construction),
  • specialized medical devices,
  • agricultural machinery and vehicles,
  • IT equipment
  • property.

Who is the leasing loan for?

Who is the leasing loan for?

Due to the purpose associated with the purchase of a fixed asset, a lease loan can be used by all enterprises. However, considering the specific features of this product, it is suitable in particular for the following entities:

  • companies that are not VAT payers,
  • members of the professions, especially doctors, who often buy equipment with an 8% VAT rate,
  • farmers, also not conducting business activity,
  • companies applying for subsidies from the EU.

It is worth mentioning that the discussed financial solution is particularly popular among enterprises using EU funds. It is for them that some leasing companies have special leasing loans for subsidies. Purchase of a fixed asset on the basis of a loan immediately gives the ownership right to it, which is necessary to obtain funding.

What are the costs of a leasing loan?

What are the costs of a leasing loan?

For companies that are interested in leasing loans, costs and interest are usually of great importance. Although each leasing company offers slightly different conditions in this respect, it can generally be considered that they are similar to the conditions of traditional investment company loans, which are proposed in banks.

Among the available offers you can find very interesting suggestions. An example is the possibility of financing the purchase of a vehicle or other fixed asset in a net or gross amount (i.e. including VAT).

You can also find solutions taken from car loans, i.e. 50/50 loans, where the repayment is divided into two installments, regulated every 12 months, at an attractive interest rate.

When it comes to the cost of the leasing loan, it is worth paying attention to the method of its settlement, which affects the profitability of this solution. The entrepreneur may include in the tax deductible costs the interest part of each installment and make depreciation charges every month.

However, the total cost of the loan may be increased by additional fees, e.g. related to establishing a registered pledge.

Where can you find a leasing loan?

If you want to use this form of financing, you should look for offers in leasing companies, including those operating at banks.

The leasing loan is available, among others, at the following institutions:

  • PKO Leasing,
  • Alior Leasing,
  • BNP Paribas Leasing Services,
  • European Leasing Fund,
  • Idea Getin Leasing,
  • SGB ‚Äč‚ÄčLeasing.

If you buy a car, leasing loans are often available directly from dealerships.

What are the pros and cons of a leasing loan?

What are the pros and cons of a leasing loan?

Before making a decision on a leasing loan, it is worth getting to know this financial product closer. This type of offer is favorable from a tax point of view. Jenak is a great solution for people who are not VAT payers. However, like any product, a leasing loan also has its drawbacks.

Simple formalities, quick decision It is possible to finance only the purchase of a fixed asset (this is not a loan for any purpose)
Possibility of using without own contribution (it depends on the amount of financing) It is not possible to replace a fixed asset, e.g. a car, with a new one after the end of the contract, as is the case with leasing
No minimum funding period Additional costs associated with establishing collateral
Possible long financing period, and therefore low monthly installments Difficulties in obtaining financing for unusual machines and devices
Ownership of the asset after purchase The loan agreement goes to BIK, which then translates into the company’s creditworthiness
Possibility of making depreciation charges No tax benefits for companies that are VAT payers
Less burden for the company due to the lack of VAT added to the loan installments Inability to include the entire installment in operating costs (interest can only be included)

Loans without commission – check where to look!

What is the loan commission?

What is the loan commission?

One of the most important criteria for choosing a cash loan is its cost. It depends on him how much we pay the lender for the service. So it is obvious that the lower it is, the cheaper it will be, and therefore more profitable.

The cost of a loan or credit consists of many elements – these are primarily interest, but also various additional fees, which constitute an additional profit for the lender. For non-bank products, the non- interest cost is usually the commission for granting the loan, and in some cases also the preparation fee.

According to the general definition, commission on a loan is a form of remuneration for the lender for providing a service related to its provision. Its amount is most often calculated as a percentage of the value of the borrowed amount.

Regardless of whether you are applying for a small online payday loan or a larger installment loan, before entering into a contract the lender should provide you with a detailed list of all costs associated with incurring a commitment. They are usually presented in so-called Information Form – you will find in it, among others total repayment amount, APRC and the amount of interest and commission expressed in amounts.

No commission loan – what offer is this?

No commission loan - what offer is this?

Knowing the cost of loans, it’s easy to guess what a loan with no commission means. This is an offer in which the lender does not charge a commission for providing the service. Therefore, interest and other charges, e.g. preparation fees, are added to the amount of the liability.

Despite this, the lack of commission alone reduces the cost of borrowing. In the case of non-bank products, the difference can be significant, depending on the amount of the commitment made, thanks to this promotion, you can save from tens to even several thousand USD.

A commission-free loan is a promotional offer that is most often targeted at new clients. This means that you can only count on the discount when you make a commitment for the first time in a given company offering such a promotion.

Many non-bank companies also offer other interesting promotions that allow you to save on costs related to incurring liabilities. The most popular ones are payday loans for free, for which no money borrowing fees are charged. By using such a product, you do not have to pay not only commission, but also interest and any other fees. In a word, you give back exactly the same amount that was loaned to you.

How to get the first loan without a commission?

How to get the first loan without a commission?

You can take advantage of the promotion to reduce your liability costs at many non-bank companies, as well as at some banks. How to find such an offer, we will tell you in the following paragraphs. It is worth mentioning, however, that it can be searched on the Internet, and it is proposed by institutions specializing primarily in providing instant payday loans.

In most cases, as part of this promotion, the first loan is offered without commission, i.e. for new customers of a given company who want to take advantage of its offer for the first time.

To enlist it, it’s usually enough to complete some simple formalities, such as:

  • Submission of a loan application.

To do this, you must complete the form, providing personal and address details, as well as information on income, bank account and financial situation. When submitting an online application, an essential element of this stage is also confirming your identity – for example, a verification transfer.

  • Choice of the amount of the liability and its repayment period.

In the case of a quick payday loan, the maximum refund period is 30 days. In turn, repayment of an installment loan can usually be spread over a period of 3 to 48 months.

  • Familiarization with the terms of the contract and the cost of crediting – in the field regarding commission should be entered the value of 0 USD.
  • Expressing the necessary consents to the processing of personal data.
  • Receipt of a credit decision – companies operating via the Internet usually forward it via SMS or email.

Who is the loan with no commission for?

Who is the loan with no commission for?

As we have already mentioned, only new clients of an institution can benefit from the promotion of a commission-free loan. This is not a big limitation, because such offers quite often appear at different lenders. All you have to do is choose a company where you haven’t incurred a commitment before.

Remember, however, that each institution grants loans only to people who meet certain conditions. So you have a chance for a loan without a commission if:

  • you are the right age – depending on the company, the minimum age may be 18 or more,
  • you have a valid ID card,
  • you have your own bank account,
  • you can indicate a permanent home address in Poland,
  • you regularly receive income enabling repayment of liabilities, e.g. under an employment contract, retirement pension, disability pension, etc.,
  • you are reliable in terms of timely settlement of obligations – the lender can (but does not have to) check it in the Credit Information Bureau and BIG debtors’ registers.

In the case of online application, it is also necessary to have a mobile phone, e-mail address and a device with Internet access. Although most lenders require information on the amount and source of income, it is very rare to provide documents that confirm it.

Loan offers without commission – where to look for them?

Loan offers without commission - where to look for them?

If you want to borrow money without paying a commission, you can easily find promotional loan offers both in banks and non-bank companies. However, loan institutions have the advantage over banks that they provide services without using complicated formalities and complicated procedures.

In case you are interested in a quick, commission-free loan that can be obtained without filling out a stack of forms and providing multiple documents, look through the offers of loan institutions. You can do it online, e.g. using the free payday rankings. You can also go to a broker who will help you find the best offer tailored to your needs.

Loans with no commission online – is it possible?

Loans with no commission online - is it possible?

Non-bank companies and banks are trying to go with the times and maximally facilitate their clients using financial services. That is why a loan without a commission via the Internet is available today in many institutions. It consists in the fact that you can take it online without leaving your home – all you need is a computer, tablet or smartphone with internet access.

The advantage of this product are simple formalities, as well as a very short waiting time for funds – usually you can have borrowed money on your bank account within an hour of submitting the application. A convenient online loan to your account allows you to quickly obtain additional funds, and thanks to the promotional terms you can save on the costs of contracting.

Remember, however, that the total cost of the loan consists of several additional elements. Before using the promotion, compare as many offers as possible, paying attention to interest rates and additional fees. This will guarantee that you will borrow funds on really favorable terms.