Financing the company
Being an entrepreneur, we often look for additional resources to finance the enterprise’s needs. Sometimes the savings we have are not enough to cover our needs. Such problems are mainly faced by companies operating in seasonal activities. Then, discrepancies in costs between individual months are the most noticeable and significantly different. Depending on what expenses we need, we can choose between such sources of additional financing as credit or leasing.
Through a loan agreement, the bank undertakes to provide the borrower with a specific cash pool for the purpose specified in the contract. The borrower undertakes to use the funds transferred for the purpose resulting from the loan agreement, repay the loan installments on time with interest due and cover the additional costs of the loan.
Through a leasing contract, the lessor undertakes to transfer to the lessee the right to use the item. The owner of the item, which is put into use, is the lessor, that is the financing entity. The lessee pays leasing fees for sharing the things he can use. In addition, after the termination of the lease agreement, he gets the option of finally buying out things and only then becomes the owner.
It is better to choose a loan or a lease
The basic difference between a bank loan and a leasing contract concerns the repayment of installments. The amount of individual loan installments depends on the amount of loan capital and the loan period. We can not adjust loan installments to suit your needs. However, it is different in the case of a leasing contract. On the amount of leasing installments, apart from the value of the leased asset and the leasing period, the final price of the item also influences their value. Thanks to this, we can adjust the leasing installments to your current financial capabilities, which we can not afford in the loan agreement. This works in the way that the greater the amount of the final payment for the item, the lower the monthly installments. And vice versa. If we pay higher installments, the final purchase price of the item can cost us virtually nothing, because in fact, we have already paid for it in installments.
The loan interest rate depends also on the amount of own contribution. The less funds we have, the higher the installments. The amount of the initial payment in the case of a leasing contract affects only the amount of monthly fees, without affecting the financing costs of the lease.