Leasing allows a financial institution (financial lessor) to buy movable property (equipment, vehicles, etc.) or real estate (offices, commercial premises, business premises, retail, etc.) and to rent them to a company (credit -lessee) for a time specified in the rental agreement.
Generally, the duration of rental contracts corresponds to the duration of the tax depreciation of the property.
The rental contracts are:
with purchase option : the transfer price of the equipment at the end of the contract is then indicated in the document,
without a purchase option, at the end of the contract, the company returns the equipment it has rented and can rent it again if it wishes.
However, not all financial institutions are authorized to carry out real estate leasing. Only financial companies and subsidiaries of specialized banks can set up this type of operation. You can find all the approved financial companies on the website of the French Association of Financial Companies (ASF) .
How do I know if my business can benefit from it?
All companies regardless of their legal status after acceptance of their application file by the financial lessor can benefit
from it The financial leasing company examines the nature of the property financed, the financial situation of your company and its repayment capacity and gives then its agreement on the financed good.
If your company is subject to corporation tax (IS), industrial and commercial profits (BIC) or non-commercial, then you are concerned!
As explained above, real estate leasing can only relate to premises for professional use (offices, business premises, shops). Different assemblies are possible:
The building is already built: It is you, the entrepreneur, who will carry out the search for the property (according to your needs), visits, negotiation with the seller. The financial lessor buys the building and rents it to your company with a promise of sale at the end of the lease.
The building does not exist : The financial lessor acquires the land and finances the construction work. The project management is entrusted to you.
The tenant has land that he sells to a company to build the building.
The building belongs to the tenant who sells it to a company, which in turn rents it to him with a promise of sale at the end of the lease (cession-leaseback).
What must the conditions of the contract between the financial lessor and you, the tenant, contain?
You have occupied the building for several years, the end of your rental contract is approaching, several choices are available to you. You can decide:
Exercise of the purchase option in execution of the unilateral promise to sell provided for in the contract, at a price set by the contract and taking into account the rents paid This action will give rise to the transfer of ownership of the building. You will therefore have to pay the amount that was initially fixed, which is either symbolic (1€) or between 5 and 15% of the purchase price of the property.
Direct or indirect acquisition of the property rights of the land on which the building was built
If you decide for any reason to assign your contract to a third party, any profit you will derive from it will be considered as a professional capital gain (taxable on the basis of the difference between the sale price and the total of the quotas- rental shares not deducted).
Within the framework of a civil real estate company, in the event of restitution of the building, the tenant must transfer his shares to the lessor.
The financial institution will be required to continue financing the lease. In the event of a takeover of the company, it is the new lessee who will take over the payment of the rents without being obliged to pay the previous sums.
For companies, and for those in the process of being created, the advantages of leasing are numerous:
It does not require any contribution from the creator while allowing 100% financing of the amount of the investment. A security deposit may however be requested at the start of the contract as well as an advance rent.
Rents are expenses deductible from the company’s taxable profit. The tax advantage is all the more important as the repayment period is short.
Leasing is interesting for equipment whose rapid obsolescence is important (computer equipment, office equipment, etc.).
It avoids a significant discrepancy between the VAT paid and the VAT collected.