As one of methods of increase of efficiency of the investment process may consider the use of the mechanism of leasing operations.
Financial sources of investment for manufacturing enterprises are own funds (retained earnings and equity) or borrowed funds (mainly in the form of credit).
Since the establishment of legally determined and legally enforceable conditions, leasing can be considered as an alternative the possibility of establishing (purchase) of property (fixed assets) of the company against the scheme of direct lending.
From an organizational point of view, the formation of leasing relations is the emergence of an intermediary between creditor and consumer investment.
The lessee may receive a significant benefit. This contributes to the fact that
1. Leasing provides 100% credit and does not require immediate payments. When leasing, the contract is for the full value of the property. Lease payments usually begin after delivery of the property to the lessee, or later.
contracts on leasing to get much easier than a loan, especially for small companies, as leasing companies do not require from the tenant additional guarantees (in the case of default by tenant of the terms of the contract, the leasing company takes the property). As additional income is considered, and the reduction of the tax burden. In taxation system rent (leasing) payments are treated as operating (current) expenses and included in cost of goods (services), thereby reducing the tax base of the lessee. The amount of savings on tax payments (tax shield) is the difference of the sums of paid taxes arising in view of the differences in taxable bases at the same tax rate. The tenant receives a tax shield of lease payments. The risk of physical and moral aging of the equipment rests with the lessor. Leasing helps to maintain the turnover of the enterprise, the optimal ratio of own and borrowed capital is not a "heavier" assets. The tenant can use far more production capacity than purchasing their own equipment. Temporarily released funds can be used for other purposes. Lease agreement is more flexible. The tenant can expect receipt of their income and work out with the landlord proper, convenient financing scheme. The rate may be fixed or floating.
As leasing has long served as a vehicle for the implementation of product and production development, state policies tend to be aimed at the promotion and expansion of leasing operations.
Disadvantages of leasing:
1) If the equipment is taken in financial leasing and it is over time become obsolete before the expiration of the lease contract, the lessee continues to pay the lease payments until the end of the contract.
2) When operational leasing risk of obsolete equipment lies with the landlord, who is forced to take major payment from the lessee.
3) Another disadvantage of financial leasing is that in the event of equipment failure, payments shall be made in a timely manner, regardless of the condition of the equipment.
4) If the object of the leasing contract is an important and unique facility, in connection with a wide variety of conditions of rental transactions preparation of contracts on their lease requires significant time and money.
Leasing relations can be divided into the following characteristic features:
1. According to the degree of a recoupment of property: define a financial lease, when the lease coincides with the term of depreciation of property and operating lease when the term of the contract is less than the life time of the equipment and the tenant pays only part of its value.
2. On structure of participants distinguish between direct and indirect leasing. In the case of direct leasing interact two participants - the owner of the property (in its role often by the manufacturer) and the lessee. In the case of property of the lessor leased through additional mediators, there is a indirect leasing.
3. The type of the subject of lease transaction: leasing of real estate, leasing of movable and leasing of the assets used.
4. The volume of rendered services: net lease (maintenance of equipment rests with the lessee), leasing with a complete range of services (maintenance of the leased equipment rests with the lessor), the lease with partial services or combined form (different functions for maintenance of equipment are allocated on a contractual basis between lessor and lessee)
5. The form of payment for the services provided you can specify the lease with cash payments (all payments are made in cash), leasing with compensatory payment (all payments under the leasing agreement shall be in the form of supplies of goods produced on the leased equipment) and a mixed form of lease (partial combination of both the monetary and compensatory payments).