Leasing versus credit: what is easier to get?

Equipment leasing from the very first day of operation and simplified procedures – this offer can be found in most leasing companies. To be able to apply for a loan, however, the company should have been on the market for at least half a year and have an impeccable financial condition. We check which documents should be submitted when applying for leasing and how long the application is under consideration.

Depending on the company’s demand for financing sources – whether it be credit or leasing, the entrepreneur must meet the criteria set out by the internal procedures of financial institutions. When applying for a loan, one should be aware that most banks have been required to operate for at least 6 months, and with the application the client is required to provide a set of formal, legal and financial documents. 

The Bankier.pl editors decided to take leasing procedures to the workshop. We asked financial institutions about the requirements for new and existing clients, what is the time of processing the application and what channels can be submitted.

Leasing from the first day of operation

Leasing from the first day of operation

Financial institutions specializing in leasing products, which are a relatively new form of financing, still have to fight to acquire a new customer. The leasing offer is not cheap, but on the other hand it gives the lessee   the possibility of including the entire leasing rent, the initial payment and other charges related to the use of the item as tax deductible. Leasing companies are doing everything to make their offer more attractive and accessible than obtaining a company loan. Among the financial institutions that shared information on the leasing application processing process was the different leasing company.

Most financial institutions lease to companies from day one. However, not all entrepreneurs can take advantage of this offer. Internal procedures determine in which industry the company must operate and what subject to apply for to obtain leasing for a newly opened business. EFL finances startups from the medical industry. Other entrepreneurs can apply for it six months after starting the company. Additionally, more desirable clients are more experienced entrepreneurs from the medical industry, lawyers, architects or entrepreneurs with service activities in the field of bookkeeping. They can count on a more favorable approach to their application and simplified procedures.

Muter Leasing also does not specify a minimum period of running a business, if the subject of the lease are cars up to 3.5 tons, forklifts and medical equipment. Idea Leasing has a similar policy, which provides financing for both large companies and startups from the first day of their activity. It specializes mainly in leasing heavy transport means, financing light vehicles, machinery and equipment for the construction, agriculture, food and medical industries. Additionally, the preferred groups included entities performing freelancers, including doctors, medical industry and farmers.

CoLeasing does not apply the provisions regarding the minimum operating period only for financing vehicles up to 3.5 tonnes. In other cases, the entrepreneur must operate on the market for at least 1.5 years or – if he operates in the medical industry – can apply for leasing at the moment of acquiring the right to practice the profession.

Simplified Procedures

Simplified Procedures

Customers can count on simplified procedures when applying for equipment on the list of preferred items by the financing institution (e.g. passenger cars), equipment of low value or in the case of low credit exposure. Simplified procedures may also be used by current clients of a given lessor. By default, these companies require submitting only the leasing application and signing consents to check the client in the debtors’ databases. In the case of credit, the procedure is more complicated. Only current bank customers who have, among others, can count on simplified procedures. company account. At the same time, the simplification of credit procedures consists only in resigning from the requirement to provide certain documents or reducing the waiting time for a credit decision.

The European Leasing Fund decides to use simplified or standard procedures depending on the subject of the lease and its value. In the case of the simplified procedure, financial documents are not required. However, if it is necessary to examine the application in the standard procedure, the entrepreneur is obliged to submit:

  • formal and legal documents relevant to the legal form of the business (sole proprietorship – certificate on entry in the business register or printout from Civiler, civil law partnership – certificate on entry in the business register or printout from Civiler and company agreement, other legal forms – description from the National Court Register);
  • financial documents for the indicated accounting period depending on the financed transaction (simplified accounting – statement from the accounting office about revenues and revenues or summary from the KPiR or simplified financial information, a lump sum on recorded revenues – printout from the revenue record or a statement on the obtained revenue or VAT declarations, tax card – decision from the Tax Office regarding the amount of the tax card, full accounting – balance sheet and profit and loss account);
  • certificates from the Social Insurance Institution / Tax Office on arrears (may be required for high transaction amounts).

Most of the procedures used by Idea Leasing only require the client to provide the application. In addition, depending on the procedure followed, you may be asked to complete a Customer Information document. However, the full procedure is used with higher involvement and requires the lessee to submit:

  • tax (PIT or CIT) and financial documents for the past two years;
  • financial documents for the current period (simplified accounting – copy or printout from KPiR, lump sum on recorded revenues – printout from revenue records, tax card – decision from the Tax Office regarding the amount of the tax card, full accounting – profit and loss account, F-01 and balance sheet;
  • information on liabilities;
  • full financial statements and financial documents of related entities in the event of a large requested commitment.

If an application is submitted to Muter Leasing, the entrepreneur may also count on a simplified procedure. However, when the standard procedure is needed, he will be required to provide:

  • formal and legal documents relevant to the legal form of the business;
  • PIT / CIT for the previous financial year;
  • certificates from ZUS / US on arrears;
  • financial documents for the year ended and current period: simplified accounting – VAT declaration 7 or KPiR summary, lump sum on recorded revenues – printout from income records, tax card – decision from the Tax Office regarding the amount of the tax card, full accounting – profit and loss account, F- 01, cash flow statement.

Leasing decision in a few minutes

Leasing decision in a few minutes

Entrepreneurs considering submitting a leasing application have various channels at their disposal through which they can apply for funding. As with credit procedures, not all financial institutions allow you to submit an application other than through an advisor. This situation occurs, among others, in the European Leasing Fund, where the client can apply for leasing through an EFL financial advisor, in a network of authorized representatives and from selected suppliers cooperating with EFL.

The submitted application may be considered even within 15 minutes. However, the waiting time for a decision depends primarily on the type of leased asset and its value. Idea Leasing also allows the customer to submit an application only via standard channels, i.e. at Idea Leasing branches, authorized representatives and partners, and Idea Bank branches. The leasing decision is handed over to the client within 24 hours at the latest. Muter Leasing also does not introduce innovations in this matter – the client is forced to contact an advisor in order to submit an application. A leasing decision that deals with low value equipment is issued from a few minutes to two hours. In the case of transactions with higher exposure, this period may be extended to several days.

Only CoLeasing gives you the option of submitting a leasing application via CoLeasing.pl or mbank.pl. In addition, the subject of the lease can be requested at the branches of the financial institution and the suppliers with whom cooperation has been established. When it comes to examining the CoLeasing application, most decisions are issued automatically. Only for transactions that go beyond the simplified procedure, the waiting time may be extended to 3 days.

What is the minimum lease amount?

What is the minimum lease amount?

If you want to take out a company loan, the entrepreneur must take into account the minimum amount of the commitment given by the bank by the procedures. With revolving loans, it can range from PLN 1,000 to PLN 10,000, while for investment loans it can even reach PLN 20,000. However, usually such a restriction is not a major problem for entrepreneurs who are counting on granting much higher amounts when applying for a loan.

By entering into a leasing transaction, customers can also   meet similar guidelines, but they are used much less frequently than for loans. Among the surveyed institutions, CoLeasing and Muter Leasing indicated that they do not use the minimum amount, and each transaction is assessed individually taking into account the needs of the client and his potential. In EFL, the application will not be considered if the value of the subject of the lease does not exceed PLN 1000, while Idea Leasing has set such a threshold for PLN 15,000. In the case of leasing, the minimum transaction amount is a greater difficulty for the company. It may turn out that leasing of e.g. computer hardware worth PLN 5,000 will not be possible in every financial institution. Therefore, when considering leasing, it is worth seeking information from lessors in advance.

Leasing procedures are less complicated than credit procedures. Also, issuing a leasing decision is much more efficient – it ranges from a few minutes to several days, while customers taking a loan expect up to 14 business days. This is the result of risk calculation. Banks, when borrowing money, carefully check the borrower’s financial condition and its ability to pay its liabilities. Hence the need to provide the company’s financial statements and the extended waiting time for a credit decision.

However, in the case of leasing, the subject of the transaction remains the property of the lessor throughout the contract period, and the customer is only entitled to use it for consideration. The leased machine or means of transport also protects the leasing contract. If the company’s condition deteriorates and it is unable to make repayments, the subject of the lease will be taken away from it. On the other hand, the proceeds from its sale will reduce the value of receivables due to the lessor. Debt recovery for a loan that has not been secured by tangible fixed assets is undoubtedly a longer and more complicated process.