Today leasing is one of the most effective ways to invest in equipment and production development and assets acquired under leasing contract - more profitable investment form in comparison with direct purchase and purchase or loan. Leasing allows you to save up to 15 %.
Leasing combines loan and rent. It assists to save working capital as no lump- sum required for the equipment purchase. Unlike tough lending conditions, leasing agreement gives greater flexibility when working with the Client. Lease operations do not affect financial performance and liquidity ratio of the enterprise and are not reflected in the statement of financial position.
| Asset | Cost Incl. VAT, Thousand RUB |
Cost Excl. VAT, Thousand RUB |
Acceleration Depreciation Factor |
|---|---|---|---|
| Vessels/Equipment | 100 000 | 84 746 | 3 |
| Term | Value | Unit |
|---|---|---|
| Advance payment | 20 | % |
| 20 000 | Thousand RUB | |
| Loan rate | 14 | % |
| Raised Funds | 80 000 | Thousand RUB |
| Lease/Loan Period | 5 | Years |
| Name | Lease | Loan |
|---|---|---|
| Payments to Supplier (Advance Payment) | 20 000 | 20 000 |
| Lease Payments | 119 620 | – |
| Property Tax | – | 7 768 |
| Loan Amortization | – | 80 000 |
| Interest Payments | – | 28 918 |
| VAT Refund | - 21 298 | - 15 254 |
| Income Tax Reduction | - 23 665 | - 12 987 |
| TOTAL COSTS, Thousand RUB | 94 660 | 108 445 |
The final values reflect lessor’s cash flow balance for lease / loan agreement (60 months) period according to the above mentioned items. As for direct purchase, expenses are full value payment of an asset and property tax. As company’s net profit is used for the purchase, previously paid income tax will significantly increase direct purchase cost.
According to calculations 60 months period costs for leasing is significantly lower than loan costs