Economically, leasing is similar to a loan secured by the acquired asset, but legally structured differently: ownership remains with the lessor until the end of the contract. This simplifies debt recovery in case of non-payment and reduces collateral requirements from the client.
Financial leasing involves purchasing the property at the end of the term and is essentially a form of installment buying. Operating leasing is closer to rental: the property is returned to the lessor, and payments only cover the usage period.
The instrument is widely used in acquiring vehicles, equipment, and machinery. For a company, it allows obtaining an asset without significant upfront capital outlay, and payments are typically treated as expenses, affecting taxation.
When comparing leasing with a loan, relying solely on interest rates is insufficient: the down payment amount, payment composition, inclusion of insurance and maintenance, and early purchase conditions matter. Accurate comparison is only possible by evaluating total payments over the entire term.