IT leasing and financial leases
When the company wants to keep the equipment at the end, the right product is not renting, it is a financial lease. The difference looks technical, but it changes the balance sheet, it changes the tax treatment and it changes the total cost calculation.
How it works
In a financial lease, the funder buys the equipment chosen by the company and grants it the use of that equipment for a set term, in return for rents. At the end, the company can exercise a purchase option for a residual value fixed at the outset, and the equipment becomes its own.
In economic terms, it is finance for an acquisition. In accounting terms, the asset goes on the lessee's balance sheet from the start, with the corresponding liability, and is depreciated in the normal way. The rents are split into capital and interest: only the interest component is an expense for the period.
The residual value is the central piece
A 1% residual means the company pays almost everything during the contract and keeps the equipment for a token amount: higher rents, guaranteed ownership. A 10% residual lowers the rent but leaves a decision for the end.
It is the variable that causes the most confusion in comparisons. Two proposals with the same rent and different residuals are not the same proposal, and a leasing proposal with a high residual can look cheaper than a renting one without being so. In the scenarios we send, the residual is always explicit and the total cost includes it.
When leasing beats renting
- When the equipment will last considerably longer than the contract term
- When the company wants the asset on its balance sheet, as a matter of policy or because a third party requires it
- For infrastructure with a long useful life: servers, storage, networking
- When accelerated depreciation is tax-efficient for the company
When renting beats leasing
- For equipment that ages quickly: laptops, workstations
- When the aim is to renew the fleet automatically
- When you want to keep the balance sheet light and avoid fixed assets
- When support, warranty and insurance services should sit in the same rent
There is no need to choose blind. In the same request we ask for scenarios under both arrangements, with the total cost of each calculated to the end, residual included. Seeing the two side by side settles the question in minutes.
Frequently asked questions
What is the residual value in a lease?
It is the amount for which the company can buy the equipment at the end of the contract, set at the start. For IT equipment it is usually between 1% and 10% of the purchase price. The lower the residual, the higher the rent, and vice versa.
Is all the VAT paid up front?
In a financial lease of movable assets, VAT is charged on each rent and on the residual value when the purchase option is exercised, not on the total value at the start. That is a significant cash-flow difference compared with an outright purchase, where the VAT is paid all at once.
Can I depreciate leased equipment?
Yes. In a financial lease the asset goes on the lessee's balance sheet and is depreciated at the applicable rates, 33.33% a year for IT equipment, under Regulatory Decree 25/2009. The interest on the deal is a finance cost. Always confirm the treatment with your certified accountant.
Leasing or renting for servers?
It depends on what the company wants to do with the equipment at the end. If it intends to keep using the server for another two or three years after the contract, a lease with a purchase option works out cheaper overall. If it is going to renew the infrastructure, renting works out cheaper and takes care of the exit of the old equipment.
Want to see the numbers for your case?
Tell us what you need to equip. We consult the four funders and send back compared scenarios within 48 working hours, with no commitment.