Financial leasing is a type of lease-purchase agreement where your business attains economic ownership of an asset, like a company car, in return for periodic payments during a predetermined period. As is typical with financial leases, the lessee (this is the company that is leasing) has the option to purchase the asset for a predefined residual value upon termination of the agreement. You can also choose to extend the leasing or return the leased vehicle.
ON balance: the monthly invoices with financial leasing include the amortisation of the asset and the financing costs. As a lessee, you have the right of use (beneficial ownership) of the asset during the term of the lease, but the leasing company remains the owner until you decide to exercise the purchase option when the lease expires.
Good to know: with this solution you amortise the leased company vehicle on the balance sheet in your own accounts. Moreover, you are responsible for all services, like insurance and maintenance.
"}},{"componentType":"sectionTitle","title":"The difference between on-balance and off-balance"},{"componentType":"paragraph","richBody":{"value":"Choosing a financial lease is choosing for accounting optimisation. If the purchase option upon termination of the agreement is less than 15% of the invested amount, it is on-balance or financial leasing.
You capitalise the asset on your balance sheet. The depreciation rules are the same as if you owned it. Each time you pay an invoice, the recorded debt is reduced in proportion to the capital share included in the invoice.
If the purchase option exceeds 15%, it is off-balance or financial renting. The lease invoices are booked as expenses in the income statement, which reduces the taxable base.
Off-balance or on-balance? It is advised to rely on your accountant when making this choice.
"}},{"componentType":"sectionTitle","title":"The benefits of financial leasing"},{"componentType":"paragraph","richBody":{"value":"The formula of the financial lease offers you a myriad of benefits:
Do you want a financial leasing for a company vehicle or other company assets (so not fleets)?
"}},{"componentType":"cta","textLink":{"url":"/en/business/financing/professional-lease","text":"Calculate your leasing"}},{"componentType":"sectionTitle","title":"What is operational leasing?"},{"componentType":"paragraph","richBody":{"value":"Operational leasing is an all-in-one solution and differs from financial leasing in some important ways. With operational leasing, the asset is not considered the property of the company that leases. Instead, you rent the asset for a predetermined amount of time, usually at lower monthly costs than with a financial lease. At the end of the operational leasing period, you, as a lessee, typically have the possibility to return the asset, to upgrade it to a newer model or to buy it at market value.
"}},{"componentType":"paragraph","richBody":{"value":"Are you looking for an ideal company car, van or truck? And would you like a clear overview of the most advantageous financing formula?
"}},{"componentType":"sectionTitle","title":"Start your lease request or simulation right away"},{"componentType":"cards","cards":[{"componentType":"productCard","cardType":"product","cardSize":"small","title":"Simulate or request your leasing","intro":"For ING-clients, it takes only 5 min, in the secure ING environment","image":{"transformBaseUrl":"https://assets.ing.com/transform/d27618f8-536e-4772-b86f-5119edab45ae/Circle-Coins-5","type":"image","width":64,"original":"https://assets.ing.com/m/7e4f399ea022700/original/Circle-Coins-5.svg","extension":"svg"},"link":{"url":"https://ebanking.ing.be/banking/instant-lease"}},{"componentType":"productCard","cardType":"product","cardSize":"small","title":"Not ING-client yet?","intro":"Request your leasing or lending here","image":{"transformBaseUrl":"https://assets.ing.com/transform/4195d930-98d2-498e-997f-df45f3b60fd5/vermogenthemas-4","type":"image","width":160,"original":"https://assets.ing.com/m/5195559bfb83868b/original/vermogenthemas-4.svg","extension":"svg"},"link":{"url":"https://www.ing.be/en/business/financing/intake-form-business-credit-center?flow-step=interested-in-a-professional-loan-1"}}]},{"componentType":"sectionTitle","title":"Also interresting"}]},"complementaryZone":{"flexComponents":[{"componentType":"cards","cards":[{"componentType":"productCard","cardType":"product","cardSize":"small","title":"Financing your business: all options at a glance","intro":"From a business loan to crowdfunding and grants: what do you prefer?","image":{"transformBaseUrl":"https://assets.ing.com/transform/15fa4409-2885-4f85-a8f4-ad48d153ebab/Two-smiling-men-wearing-workwear-standing-outside-a-warehouse","type":"image","width":5700,"original":"https://assets.ing.com/m/fb21a500f09a5cc/original/Two-smiling-men-wearing-workwear-standing-outside-a-warehouse.jpg","extension":"jpg"},"link":{"url":"/en/business/starters/business-financing"}},{"componentType":"productCard","cardType":"product","cardSize":"small","title":"Business Credit Centre","intro":"Apply for a credit or a lease.","image":{"transformBaseUrl":"https://assets.ing.com/transform/0791c54f-9664-4567-8df3-349b976c8d1b/ING-service-punt_Spot","type":"image","width":160,"original":"https://assets.ing.com/m/324a470b559dbdaf/original/ING-service-punt_Spot.svg","extension":"svg"},"link":{"url":"/en/business/financing/working-capital-and-liquidity-business-credit-center"}}]}]},"legalZone":{"flexComponents":[{"componentType":"paragraph","title":"Disclaimer","richBody":{"value":"This article is for informative purposes only and the information set out herein may change with time. We therefore recommend that you always reference specific regulations and requirements with the competent authorities for the latest information. Additionally, we advise that you seek professional advice on a case-by-case basis before making any decisions. Please note that ING Belgium SA/NV cannot be held liable for any decision taken on the basis of the information provided.
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