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ENFR

Financial leasing

The general characteristics of financial leasing contracts:

  • Tripartite operations whereby

    • The lessee:

      • chooses the material and the supplier, and negotiates the purchase conditions
      • undertakes to rent the material (number, amount and duration are fixed in the contract)
      • checks the conformity of the goods (record of receipt), the starting date of the rental agreement and the terms of payment of the supplier by the lessor.

    • The lessor:

      • purchases the material in order to lease it
      • takes responsibility for the administrative management of the transaction

    • The supplier:

      • delivers the material chosen by the lessee
      • is paid in full by the lessor, who then becomes the owner of the material

  • At the end of the lease, the lessee has 2 options:

    • either extend the lease
    • Or return the asset to the lessor

  • The lessee’s cash position remains intact: comprehensive financing, no VAT advance.

  • From an accounting perspective, the rents are seen as operating expenses and are tax deductible in most cases.

The lessee’s aim is to seek to optimise the costs and conditions of use while having no intention of owning the material.