Leasing or credit?

Conditions and prices 

*Leasing*. The assets are bought by the leasing company (lessor), which then leases them out to the lessee under Article 2 of Law No.164-FZ dated 29 October 1998 On Leasing, “for a fee for temporary use". The lessee presents the requisite constituent and financial documents. 

Over the lease term, the lessee makes lease payments under contract. Lease payments made by the lessee include not only the price of the asset, but also insurance premiums, the leasing company’s margin, and tax on the leased asset.  The total amount of these payments may turn out larger than the amount of payments on credit. Most often the lease contract stipulates that title to the asset will pass to the lessee under item 5 of Article 15 of Law No.164-FZ. In this case the total contractual amount includes the buy-out value of the leased assets (Article  28 of Law No.164-FZ).

*Credit*. The customer buys the asset independently after receiving credit from the bank (Article 819 of the Civil Code). Before extending credit, the bank examines the company’s credit history, the amount of assets and liabilities, availability of additional security and collateral. There is also the probability that besides credit payments the customer will have to pay a bank fee for the loan account, appraisal of the collateralized property, and insurance.  In leasing, the leased property is the collateral. There is also no need for a positive credit history.

      Who is the owner? 

*Leasing*. The lessee only has the right to use the asset, since the leasing company is the owner. The lessor may dispose of the asset and even seize it from the lessee (Article 11 of Law No.164-FZ). One must also remember that the lessee is obligated to compensate the owner for the value of asset in case of accidental loss or damage (Article 669 of the Civil Code). The leased asset is therefore subject to obligatory insurance. 

Transfer of title to the lessee occurs only after a certain period of time. This depends on the lease contract. Under the most widespread scenario, title to the asset passes to the lessee after all lease payments have been made. 

*Credit*. After buying property with a bank loan, the company immediately becomes its owner. 

    Our services 

VEB-Leasing is a multifaceted leasing company offering industrial equipment, vehicles, and real estate leasing services. Operating on the Russian market since 2003, VEB-Leasing ranks among the majors of the Russian leasing market. We offer both classical finance leasing (hi-tech, high-demand equipment or machinery) and financing of major industrial construction and automation projects.