Instrument leasing is an intermediate form between financial and operational leasing, and its use allows companies to manage rapidly and flexibly the changed conditions or production requirements.
Leasing, halfway between finance and operating leases
Instrumental leasing is a type of financing that involves three parties (such as finance leases but differs from operating leases involving only two parties), the entrepreneur who wants to purchase a new type of asset necessary to carry out his business, the company that produces the asset, and the financial institution that will have to grant the financing in the form of leasing. The entrepreneur will have to obtain a cost estimate to be delivered to the leasing company that buys the asset and makes it available to the customer who benefits from it by paying the agreed periodic leasing instalments (and in the contract the duration of the lease and the redemption price to be paid at maturity to become owner of the asset must be defined). The cost of financing in the form of leasing is always higher than normal financing, but the tax treatment, as well as the ease with which to deduct the costs of rent from the budget, make it a convenient form for companies. In addition, instrumental leasing also has other advantages.
The advantages of instrumental leasing
The instrumental leasing allows the company to respond quickly and flexibly to changes, sometimes sudden, related to the productive sphere, being able to have at its disposal the' necessary tools' (for example to be able to respond to an increase in demand with consequent increase in production needs), without having to incur high disbursements. The payment of the periodic fee not only does not affect the capital, but can also be covered by the higher income from increased production. Moreover, it should be underlined that the rent is' periodic' and the frequency (which in leasing forms is generally monthly) can be freely chosen by the entrepreneur, as well as the possibility of orienting oneself towards a fixed or variable rate. The lease term can range from a minimum of 48 months to 60 months. Nor should it be underestimated that the choice of leasing allows the company not to burden itself with excessive depreciation costs, which is very important, especially in the early stages or for small businesses. Many banks (Unicredit, Intesa, Bnl, Banca Sella) envisage the possibility of obtaining online quotations on leasing transactions.