How to prepare to sign a leasing contract?

Service Business

Leasing is a more advantageous form of financing than an investment loan, especially for small and medium-sized enterprises, which is why it is becoming more and more popular in this sector. In order not to fall into the trap of a dishonest lessor, you need to know what to look for before signing a lease.

Leasing - knowledge about leasing companies

There are a lot of lessor offers on the market, so it is worth reviewing those that specialize in the areas of interest to us. In addition, let's check the validity periods, the installment repayment options and the extent to which the fixed asset can be used. Before making a decision, you can ask employees of a given company how many clients with a similar profile to our business have benefited from their leasing offer. Once we find a company that meets our expectations, let's check what opinions Internet users write about it. However, if you plan to conclude a lease agreement for an asset of significant value, it is worth consulting a lawyer.

Leasing - the interest rate on the leasing contract

The interest rate on the leased asset depends on:

  1. the margin of the leasing company,

  2. base component.

The leasing company's margin is influenced by:

  • subject and type of leasing,

  • currency in which the lease will be granted,

  • Duration of the agreement,

  • the value of the leased asset.

Another factor influencing the interest rate is the interest rate - WIBOR. The leasing offers in PLN are based on the WIBOR ratio. Its amount will depend on the amount on the date of signing the contract. Although this is a constantly changing rate, it is worth checking whether the leasing company is constantly updating it. Before signing the contract, find out how the interest rate mechanism works in the leasing company, i.e. what may cause it to increase or decrease. Some enterprises reserve the right to increase the interest rate in the event of an increase in the WIBOR premium on the market. However, it does not always go hand in hand with its reduction related to lower WIBOR.

Example 1.

The average interest rate on leasing (margin + WIBOR) for new cars is currently 4.6 - 5.3% per annum.

In the case of used cars, the average is around 5.2 - 5.9%

Leasing - additional fees

Leasing companies apply additional fees, so it is worth preparing for a one-time expense related to granting a lease, the possibility of purchasing the leased item or changing the repayment schedule.

In addition, it is worth reading the Table of Fees and Commissions carefully and comparing it with the offers of other leasing companies. It happens that the amount of the leasing fee is given without tax and license. Sometimes leasing companies charge disproportionately high fees for certain events that are not aimed at reimbursement of costs, but the company's profit. The events in question may concern:

  • improper use of the leasing subject,

  • using it by third parties without the consent of the lessor,

  • delays in repayment,

  • modification of the leased object without the consent of the company.

Moreover, the lessor may, in connection with the above-mentioned situations, terminate the contract with the lessee with immediate effect, despite the fact that these contracts are usually concluded for a specified period.

Example 2.

If a company decides to finance a car lease, it should pay attention to additional fees, such as:

  • fees for expressing the consent of the leasing company to use the car by more than one employee,

  • fees related to giving consent in connection with a planned trip abroad,

  • penalties for exceeding the mileage limit.

Leasing - negotiating terms

It is worth negotiating with lessors, as confirmed by experts. Negotiation may be subject to:

  • the price of the leased item,

  • insurance cost - it is worth finding out if it is possible to take out insurance with a company other than the one that cooperates with the lessor,

  • contract assignment - most often it is possible, but the lessor imposes a high handling fee on the entrepreneur.

The last issue that can be asked by a leasing company are the benefits of cooperation, the entrepreneur can quite often count on additional privileges, such as a lower price for legal protection or a fuel card.