CHARACTERISTICS OF LEASING TYPES, THEIR ADVANTAGES AND DISADVANTAGES

Abstract

Types of leasing and their advantages and disadvantages are given in the study. The following types of leasing are considered and characterized: financial leasing, operational (operational) leasing, reverse leasing, international leasing. It is noted that leasing is an important financing tool used in many areas of business. Leasing allows companies to gain access to the necessary equipment, machinery or technology without a significant initial investment. Financial leasing allows companies to access the necessary equipment through a financial agreement with a leasing company. The advantages of this type of leasing are the reduction of initial costs, the ability to maintain liquidity and the ability to modernize equipment. It also has disadvantages, such as being a long-term liability, limitations on asset management and responsibility for its condition. An operating lease is described as an agreement that allows companies to use an asset on a short-term rental basis. The article describes the advantages of operational leasing, such as the ability to quickly update equipment, the absence of the need to keep an asset on the company’s balance sheet. Its shortcomings are mentioned, namely, the contract is more expensive and there is no possibility of repurchase of the asset. Leaseback is a contract, one of the advantages of which is an increase in current assets. This allows the company to expand while using the asset through a leasing agreement. The main disadvantage of reverse leasing is the loss of ownership of the asset. International leasing is a type of leasing whose participants are under the jurisdiction of different states. Its main advantage is access to advanced technologies and equipment. One of its disadvantages is that it can be more expensive than buying an asset. The type of leasing chosen by the company depends on its financial capabilities and business needs. Knowing the advantages and disadvantages of each type of leasing will help companies make informed choices and use leasing services with maximum benefit.