Everything You Need to Know About Leasing

What Is Leasing?

Leasing is a financial arrangement where you pay for the use of an asset over a fixed period, rather than purchasing it outright. The leasing company (lessor) owns the asset; you (the lessee) pay regular installments for the right to use it.

Think of it as renting with structure: fixed monthly payments, a set contract duration, and clear end-of-term options. Unlike a loan, you are not buying the asset — so your capital stays free for core business activities.

Key Benefits of Leasing

• Preserve capital: No large upfront payment required
• Predictable costs: Fixed monthly payments for easy budgeting
• Avoid depreciation risk: The residual value risk stays with the lessor
• Tax efficiency: Lease payments are often fully deductible operating expenses
• Stay current: Upgrade at end of term to the latest models
• Off-balance-sheet financing: Operating leases may not appear as debt

Types of Lease

A*LEASE offers two primary lease structures. The right choice depends on your financial goals, accounting requirements, and how you intend to use the asset.

Operating Lease (Mietleasing)

In an operating lease, the lessor retains the risks and rewards of ownership. Your monthly payments are treated as operating expenses — fully deductible. At end of term, you return the asset, extend the lease, or purchase it at market value. The asset does not appear on your balance sheet (under certain structures, subject to IFRS 16 review).

Finance Lease (Finanzierungsleasing)

A finance lease transfers substantially all risks and rewards to you (the lessee). The asset and corresponding liability appear on your balance sheet. At end of term, you typically have the option to purchase the asset at a pre-agreed residual value. Finance leases offer greater flexibility if you intend to eventually own the asset.

How to Apply

Applying for a lease with A*LEASE is straightforward. Here's what you need:

1. Tell us what you need — asset type, preferred brand/model, desired contract term, and approximate budget
2. Submit your details — business registration, last two years' financial statements, ID of authorized signatories
3. Credit assessment — we run a standard credit check (usually 24 hours)
4. Receive your offer — we present a personalized lease offer with full cost breakdown
5. Sign & confirm — digital or physical contract signing
6. Asset delivery — we coordinate delivery or collection

Approval Process

Our credit assessment is thorough but efficient. We evaluate your application based on:

• Business creditworthiness (credit bureau check, payment history)
• Financial health (turnover, profit, balance sheet ratios)
• Time in business (we can accommodate startups with adequate security)
• Asset type and residual value
• Requested contract term and monthly rate

We work with a wide range of business profiles and pride ourselves on finding solutions even for complex cases. If a standard lease isn't possible, we may propose alternative structures such as deposit-backed leases or hire purchase arrangements.

Auto Leasing Guide

Our auto leasing service covers all vehicle types and use cases. Key parameters you'll need to define:

• Vehicle: Make, model, specification, new vs. used
• Annual mileage: Affects residual value and monthly rate (typically 15,000–50,000 km/year)
• Contract term: 12–60 months (most common: 24–48 months)
• Service package: Basic (payments only), Mid (maintenance included), Full-service (maintenance + tyres + roadside)
• Insurance: You can arrange your own or integrate through our insurance partners

Equipment Leasing

Equipment leasing at A*LEASE covers all business assets from single laptops to entire office fit-outs. We source directly from manufacturers and authorized resellers, ensuring genuine products with valid warranties.

For IT equipment specifically, we offer technology refresh cycles — structured upgrade points built into your contract so you're never stuck with outdated hardware.

Fleet Management

Our fleet management platform (available on Business and Enterprise plans) provides:

• Centralized vehicle register with live contract status
• Driver assignment and mileage tracking
• Service booking and maintenance scheduling
• Consolidated billing with per-vehicle breakdown
• End-of-term planning tool (90-day advance notification)
• EV readiness report and transition calculator

Sale & Leaseback

Sale and leaseback allows you to sell existing assets you own to A*LEASE, receive immediate payment at market value, and lease the same assets back under a new contract. You retain full use of the assets with no operational disruption.

This structure is particularly useful for:

• Raising working capital without borrowing
• Improving balance sheet ratios
• Restructuring asset ownership for tax efficiency
• Freeing credit lines for other purposes

Contract Terms Explained

Every A*LEASE contract includes the following key terms:

• Lease term: Fixed duration (e.g., 36 months)
• Monthly rental: Fixed payment due on the same date each month
• Residual value: Pre-agreed estimated value at end of term
• Mileage limit (vehicles): Excess mileage charges apply beyond agreed limit
• Maintenance obligations: You must maintain the asset in good working order
• Insurance: You must maintain adequate insurance throughout the term
• Return conditions: Asset must be returned in fair wear-and-tear condition

Early Termination

Early termination of a lease is possible but typically incurs a termination charge. The charge is calculated based on remaining payments and the current value of the asset. We strongly recommend discussing early termination with your account manager before proceeding — there may be options such as contract restructuring, asset substitution, or novation to another party.

End of Term Options

At the end of your lease term, you have three options:

1. Return the asset — we collect it, inspect it for fair wear and tear, and settle any excess charges
2. Extend the lease — continue leasing at a significantly reduced monthly rate
3. Purchase the asset (finance leases) — buy it at the pre-agreed residual value

Your account manager will contact you at least 90 days before end of term to discuss your options.

Insurance Requirements

All leased assets must be insured for their full replacement value throughout the contract term. For vehicles, comprehensive motor insurance is mandatory. For equipment and machinery, you must hold an all-risks business contents or equipment policy. Evidence of insurance must be provided at contract inception and upon annual renewal.

Tax Treatment of Leasing

The tax treatment depends on the lease type and your local jurisdiction. Generally:

• Operating leases: Monthly payments fully deductible as operating expenses in the period incurred
• Finance leases: Depreciation of the right-of-use asset and interest component of payments are deductible
• VAT-registered businesses: Input VAT on lease payments typically reclaimable (subject to business use %)

We strongly recommend consulting your tax advisor. Our specialists are also available to help structure contracts for maximum tax efficiency.

IFRS 16 Overview

IFRS 16 (effective 1 January 2019) requires lessees to recognize a right-of-use asset and corresponding lease liability on the balance sheet for most leases. Key exceptions include short-term leases (under 12 months) and low-value asset leases.

A*LEASE Enterprise clients receive full IFRS 16 reporting support, including discount rate guidance, right-of-use asset schedules, and amortization tables.

VAT on Leasing

Lease payments are subject to the standard VAT rate in the country where the asset is used. For EU cross-border leases, the reverse charge mechanism may apply. VAT-registered businesses can generally reclaim input VAT on lease payments proportionate to taxable business use.

Managing Your Portal

Your A*LEASE online portal gives you access to:

• Live view of all active contracts and payment schedules
• Document library (contracts, invoices, insurance certificates)
• Maintenance requests and service booking
• Quote requests for new assets
• Contact your account manager directly

Invoices & Payments

Invoices are issued on the 1st of each month and are due within 14 days. Payment is by SEPA direct debit (recommended) or bank transfer. Late payment charges of 5% over the ECB base rate apply after 30 days. All invoices are available for download as PDF from your portal.

Getting Support

We're here to help. Contact us through:

• Email: support@a-lease.it.com — responses within 4 business hours
• Phone: +49 89 123 456 78 — Mon–Fri 9:00–18:00 CET
• Portal: Use the in-portal messaging system for account-specific queries
• Emergency (Enterprise): 24/7 hotline provided in your welcome pack