Assoc . Prof . PhD Laura Vasilescu [629908]

UNIVERSITY OF CRAIOVA
FACULTY OF ECONOMICS AND BUSINESS ADMINSTRATION
SPECIALISATION FINANCE AND BANKING

BACHELORS DEGREE THESIS

Coordinator:
Assoc . Prof . PhD Laura Vasilescu

Student: [anonimizat]
2018

UNIVERSITY OF CRAIOVA
FACULTY OF ECONOMICS AND BUSINESS ADMINISTRATION
SPECIALISATION FINANCE AND BANKING

LEASING – ALTERNATIVE OF FINANCING
AND INVESTMENT

Coordinator:
Assoc . Prof . PhD Laura Vasilescu

Student: [anonimizat]
2018

CONTENT

Introduction ………………………….. ………………………….. ………………………….. ………………………….. . 4
Chapter 1 THEORETICAL FRAMEWORK OF THE LEASING ………………………….. 6
1.1. Concept of leasing ………………………….. ………………………….. ………………………….. …6
1.2. Classification of leasing operations ………………………….. ………………………….. ……8
1.3. Stages of leasing process ………………………….. ………………………….. ………………….. 11
1.4. Advantages and disadvantages of the leasing ………………………….. ………………… 12
Chapter 2 EVOLUTION AND TREN DS REGARDING THE LEASING MARKET ……14
2.1. Evolution regarding l easing market in Europe ………………………….. …………………. 14
2.2. Leasing market in Romania – features and trends ………………………….. …………. 20
2.3. Leasing versus bank credit ………………………….. ………………………….. ………………. 29
Conclusions ………………………….. ………………………….. ………………………….. …………………. 33
Refer ences ………………………….. ………………………….. ………………………….. ……………………. 36
Annexes ………………………….. ………………………….. ………………………….. ……………………….. 37

4

Introduction

Leasing is a market economy product resulting from the evolution of the process of
identifying new forms of financing for the sale of products and services. Leasing is therefore a
compromise solution in that you invest with the money of another by adding a small contribution.
Leases may include real estate as well as durable m ovable goods in the civil circuit, with
the exception of audio and video tapes, theatre plays, manuscripts, patents and copyrights.
Leasing is a modern alternative to classic credit. This form of financing provides the
creditor with the right of ownership as a guarantee, which gives the credit a low degree of risk.
Leasing emphasizes the modern tendency of capitalism to make dissociation between those who
hold capital and those who actively use this capital. It also undermines the traditional conception
of property and seriously affects the myth of property in the sphere of economic doctrines.
We can say that leasing is a means of vitalizing economies without capital.
Thus, leasing can be a win -win solution for some economic agents who have financial
resourc es, a way to place economies and multiply them by setting up leasing companies. Leasing
is a winner both for the financier and for the users, the latter satisfying a need for which they have
no financing.
For companies, financial leasing can be a modern an d advantageous financing system for
durable goods, facilitating the expansion of activity, increasing competitiveness through upgrading
and efficient resource management.
The leasing market in Romania offers the possibility to extend the volume of leasing
financing on all segments, especially on motor vehicles, industrial machinery, trucks and
construction equipment.
Leasing financing is a modern and advantageous solution to provide fixed capital to
enterprises. Instead of borrowing money for the purchase o f equipment, machinery, equipment,
facilities, buildings, businesses can obtain these resources directly, making a leasing contract under
certain conditions.
Essentially, "leasing" involves an agreement transferring the right to use a good for a set
period of time and the ability to buy it at the end of the period; in some respects, the effects are
similar to renting and /or selling in installments.
Worldwide practices reveal the use of a direct leasing (the manufacturer and the owner of
the asset entrusts it to a beneficiary) and an indirect leasing (a specialized leasing company,
eventually another financier, the first purchases the good at the beneficiary's indication and it
provides to the user as a result of regular payments).
A distinction is made bet ween operating leasing and financial leasing.
In the first case, the property remains to the lessor (owner) after the end of the agreed
period; in the second case, at the end of the period, the lessee (user) acquires the asset which he
has leased by paying a residual value (the sum paid by the lessee at the end of the contract, usually
with the date of the last leasing installment, in case the User want to buy the asset). So the leasing
has both similarities and differences to a sale in installments as well as traditional rental.
In the Romanian economy, the tendency is to develop small and medium enterprises and
Romanian business people are increasingly interested in this field.
SMEs have a limited range of financial instruments because of the restrictive e ligibility
conditions for loans accorded by commercial banks. Thus, leasing is more advantageous than
credit for SMEs and start -up companies unable to obtain a credit from a commercial bank because
they do not have a robust credit history for to contract a traditional lending and the finance by

5
leasing does not require collateral assets from customers. Through leasing operations have the
opportunity to acquire a wide range of assets needed development of the company.
Although leasing companies offer divers e financing tools and a flexible financing of the
main types by assets (equipment, vehicles, real estate), due to tax deductions, companies occupy
a higher share in the total leasing market than private individuals which prefer financing through
loans from banks.
From the theory and the international experience it is known that the normal functioning
of the market economy is conditioned by the promotion of efficient economic policies and the
application of the appropriate legislation. Experience in the fiel d, both developed and developing
countries, demonstrates eloquently that businesses use leasing to finance medium and long term
investment projects. The range of the equipment delivered through the leasing transactions is
varied, which ensures to each bene ficiary an individual approach to the possibility of choosing the
assets leased according to the technological needs and the financial possibilities.
In Romania, leasing is no more a form of financing out of the ordinary, the population
being more familiar with leasing financing for the purchase of cars. In the context of the
technology modernizing in the Romanian economy, the mature market of Romanian l easing will
tend to new financing structures and in the future the leasing will be use in especially for the
acquisition of expensive equipment. Depending on the fiscal treatment of leasing in Romania,
many acquisitions of equipment that are still financed today by their own resources or by credits,
these will soon be funded through leasing. It is thus possible for the leasing object to be represented
by rolling stock in the railway system (still owned by the state), aircraft (military) and even to
entire p roduction units.
Even though there is a solid practice in leasing finance in Romania, we can expect that in
the future that we will see an increase in the nu mber of financing in a leasing.
The thesis is structured in two chapters, combining the theoretical aspects of the leasing
with the practical ones. New business techniques are proposed, applicable both in the European
economic environment and in the Romanian environment.
In chapter I, we will understand better the theoretical framework of the leasing by defining
the leasing concept and debating the advantages and the disadvantages.
In chapter II, we will follow the evolution of the leasing market in Europe, leasing market
in Romania – features and trends and then a comp are between leasing and bank credit .
The reason I chose this work is that leasing has proved to be the most effective means of
financing productive investment, providing added value and safety of the owner. This form of
financing gives the financier the right of ownership as a guarantee, w hich gives the financier a low
risk. Romania, an integrated state in the European Union, tends towards a modern and efficient
market economy, targeting the development of trade and the attraction of investments. Investments
in assets generate profits for t he company if they are used with maximum yield. Proper use of
capital resources, continued investment in new business opportunities, marketing and advertising
funding, lifelong training and staff training are strategies and policies that drive the progress of a
company.

6

CHAPTER 1
THEORETICAL FRAMEWORK OF THE LEASING

1.1. Concept of leasing

In the foreign legal literature we find that the first forms of leasing would have appeared
in Mesopotamia, Egypt and Greece1.
Justinian, in the Second Book of the Institutes, developed detailed rules that individualized
the operational leasing.
In modern society, leasing emerged as a solution to the following situation: economic
agents needed the rapid purchase of new machinery and equipment. The necessary funds had to
be procured without the economic agents having to make mortgages or pledges in favor of some
banking institutions .
The practical solution to solving the situation was leasing. There was a way (a contract)
whereby a party, called the lessor (financi er), undertakes to send a certain asset for a specified
period to another party called the lessee (user) , against periodic payments called leasing rates and
to respecte , when the contract expires , the user's right of option, which may consist of: 1) the
purchase of the asset; 2) extension of the contract; 3) termination of the contract2.
Leasing first appeared in the US and gradually this technique has expanded to other
countries, especially in Europe. Its emergence as notion and form of funding dates bac k to 1950,
but the economic base was formed earlier in the period before World War II.
The first leasing company in the US was registered in 1855 under the name of "T he
Birmingham Wagon Company". Through the activity of this company the railway wagons were
leased to the owners of coal and other minerals3. Also, in 1877, Bell Telephone Company in the
US offers users the ability to use th eir own phone devices at a cost of use, without requiring
payment of the counter value of these phones. This type of contra ct was called lease.
The radical change takes place after the Second World War – in the US after 1950, and in
Europe – after 1960, as a result of revitalizing the economy of these countries.
Businessmen wanted to purchase modern equipment because the mach ines they used were
worn out. To finance their business, at that time, there were only bank lending procedures that
were complicated and cumbersome, assuming excessive time and bureaucracy, so they found a
more efficient formula and that is leasing .
Thus, the financier who appeared as the buyer of the equipment from the supplier and who
retained the ownership of the equipment in question, goods that he gave to the entrepreneurs in
leasing.
The advantages of this method have led to the founding , in 1952, by Henry Schoenfeld and
D.P. Booth, the first specialized leasing company called United States Leasing International
Corporation. This company exists today, the current name being United States Leasing
International Inc. – US Leasing and is one of the most po werful companies in the field.
The main supporters of the leasing of industrial equipment were the banks either indirectly
through specialized leasing companies or directly as a result of banks receiving the authorization
to carry out such operations.

1 Florescu, D.A.P., Rotaru, M., Olteanu, M., Spătaru, G., Derscanu , A., – Contractul de leasing , Editura Universul
Juridic, Bucuresti, 2013
2 Dogaru, I., – Drept civil. Contractele Speciale, Ed. All Beck, Bucuresti, 2004
3 Porter, D., – Leasing a Global Industry in Leasing finance, ed. a II -a, Euromoney Books, London, 1990

7
Leas ing has rapidly expanded throughout Europe, so that in 1972 the European Leasing
Federation was established, which controls about 80% of Europe's financial leasing industry and
this has the largest shareholding in the UK.
An important aspect of the study o f the history and evolution of leasing is its spread to
Latin America and Asia, where were established „Leasing Association of Singapore” și „Manila
Asian Leasing Association.
From the aspects presented, it results that leasing, as a trade technique, is pr esent in the
economies around the world, due the advantages which it entails.
As we have seen, the leasing operation is mainly a financing technique for companies
wishing to acquire machinery and equipment but without financial means, in that those economi c
agents can secure their full financing without be forced to contract a bank credit or that they to
establish that their movable and immovable property to become mortgage or pledge, tasks that can
affect the dynamics of the commercial domain.
Leasing is a commercial operation whereby a party called the lessor /financier sends for a
certain period the right to use a good whose owner is to another person called the lessee/user , at
the latter's request , against a periodic payment called lease rates and at the end of the lease period,
the lessor/ financier undertakes to respect the user's right to purchase the asset, to extend the
contract or to terminate the contractual relationship.
The user may choose to purchase the property before the end of the leasing period if the
parties so agree and if the user pays all the obligations assumed under the contract.
The evolution of technical progress and the evolution of the relationship between supply
and demand are aspects that involve a rapid reaction to the investment decision -making level,
investments that exceed their own financing capacity, are the main reasons for the start of the
leasing operations.
The easiest solution was the leasing operation, which brings three important aspects:
production, finance and marketing. Property, b uildings and vehicles are common goods that are
leased, but goods such as industrial or commercial equipment can also be leased.
A lease is a contractual agreement that requires the lessee (user) to pay the lessor (owner)
for use of an asset.
In general, a lease agreement is a contract between two parties, the lessor and the lessee.
The lessor is the legal owner of the good and the lessee obtains the right to use the good in return
for regular rental payments. The lessee also agrees to respect by various conditions regarding their
use of the property or equipment. For example, a person who takes a car in a leasing must accept
that the car will be used only for personal use.
From an economic point of view, leasing is a source of funding, based on a contract
specific, the financier (the lessor) offers the necessary funds for the entire investment. During the
contract, the lessor (the owner) allows the lessee (the user) to use the property in exchange for the
promise to make a series of payments.
During the leasing contract there is an obligation to insure the goods and the lesse e/user
has the right to choose his insurance company with the agreement of the leasing company.
The benefit earned by lessees/users appears from the use of the property and not from
possess the property.
The leasing includes a variety of transactions from those in which the lease involves the
use of the prop erty for a short period of time, with the possibility to choose the purchase of the
property at the end of the contract and in this case the lease is in fact a means of financing the
lessee/user for the acquisition of the leased asset.
We can say that leasing is a buy transaction in rate in case of the asset becomes the property
of the user.
The participants in the leasing operations are:
– The s upplier – may be a manufacturer of goods or a company that has purchased from the
producer;

8
– The lessee (user) – is unique as a rule of the leasing. Only in certain situations, stipulated
in the leasing contract, it is possible to exploit the asset in association with another user, that is to
say, sub -leasing it. These are participants in the leasing cycle;
– The lessor (financier , owner ) – may be a financial company, a holding company, an
investment bank , a commercial insurance company, a leasing company or even a supplier. There
are situations where it attracts other companies to finance the operation if the value of the asset is
high.
If the financier is a bank, it has no control over the maintenance and exploitation of the
asset and the bank collects only late payments of loan (if the asset returns into the supplier's
property).
Therefore, the good w ill have to be protected by a collateral guarantee. In this case, leasing
rates will be much higher because banks, unlike insurance companies, do not pursue profits from
the handling of goods, but from handling money that is more expensive because, being l iquid, they
have a higher rotation.4

1.2. Classification of leasing operations

Expanding the use of leasing ope rationa has been accompanie d by a diversification of the
concrete ways of organization, marketing and finance, witch allow the establishment of a set of
criter ia by which these operations are classified.
 Leasing classification by supplier's position in the contract
Depending on the position of the supplier in the leasing contract we have: direct leasing
and indirect leasing.
– Direct Leasing – the leasing contract is between the producer and the user of the asset
subject to the transaction, the financing being provided by the supplier (producer), in which case
the supplier is the same and the lessor, being both the produ cer and the trader of the asset;
– Indirect leasing – involves the existence of specialized leasing companies, which take
over the lending, the provision of services, the contracting, the financing and the control of
payment of the installments, assuming the risk of these operations.
Leasing companies may be5:
– General leasing companies – companies that have as their object the leasing of industrial
equipment, durable goods and buildings, commercial or industrial use, property for housing. These
companies may appe ar either as independent firms or as branches of financial companies;
– Intermediary leasing companies – carrying out a mediation activity. Ownership of leased
equipment belongs to those who have provided the investment funds;
– Integrated leasing companie s – these are constituted by large production units that have
set up their own leasing companies to benefit from the financial benefits resulting from these
transactions;
– Banks and financial companies – who are engaged in leasing operations by providing
funds to leasing companies and participating in loans made by third parties to finance these
operations;
– Insurance companies – as far as investments are concerned, they are carries out in a
similar way, subject to certain restrictions imposed by the diff erent Member States.
In Romania, art.5 from O.G. no. 51/1997 regarding the leasing operations and the leasing
companies, republished in the Monitorul Oficial no. 9/2000 is amended and completed as follows:
-under the lease, the obligation to insure the go od comes from the lessor/financier, who has
the freedom to choose the insurer, unless the parties have agreed otherwise;

4 http://www.finantare.ro/ghid -leasing
5 Puiu, A., Management inter national, vol.2, Ed. Independenț a Economica, Pitești, 2003, pag. 147

9
-the cost of the insurance is recovered with the lease rate from the lessee/user;
-art. 26 provides that the costs of insuring the asset subject to a finance lease are tax
deductible by the party related by contract to pay the insurance premiums;
-in the case of the recording of damages and the collection of the sums from the insurance
of the object of the leasing contracts, the parti es may agree the extinction of the mutual debts by
offsetting according to the law.
 Leasing classification by the content of the leasing rate
– Financial leasing: During the contract, the beneficiary pays (in installments) an amount
that includes the full price of the contracted equipment, all the costs associated with the import
operation, as well as a benefit of the leasing company. The duration of the contract i s usually
shorter than the life of the equipment. At expiration of the contract, the equipment remains the
property of the beneficiary.
– Operational leasing: During the contract the beneficiary pays only part of the price of the
contracted equipment. The rate actually means the payment for the services provided by the leasing
company (spare parts assurance , repairs, etc.). At expiration of the contract, the beneficiary loses
the right on the equipment. Please note that this type of contract can be terminat ed before the
deadline, at the request of the beneficiary.
Financial leasing means that the lease must be the full amount of the contract, including
ancillary costs and benefit. The finance lease is terminated for the basic period and may be
terminated by either party and the economic and financial risks are transferred to the client. If the
payment is delayed by the customer, the partner has the right to dispose of the leasing object.
Financial leasing can have two posibilities:
– Financial leasing with fu ll payment – the entrepreneur, at the end of his basic period,
cover the production costs and commercial expenses , to earn interest on the invested capital , plus
a benefit that increases as the lease period increases ;
– Partial finance lease – at the end o f the lease period, the residual value of the equipment
is determined and that will be supported by the user if he wants to become the owner of the asset .
Operational leasing takes the following forms:
– true lease , the contract being terminable and having as its object machinery, vehicles and
equipments temporarily used by the user in its commercial activity;
– service and maintenance lease , which allows the user to benefit, in addition to the
equipment offered by the lessor (who is the producer of the goo d) and certain related services and
technical assistance.
The most popular forms of the leasing are the followings6:
– Prudence Credit (in France) – is a form of financial leasing that includes payments made
by the lessee that exceed the sale price of the asset, as well as financing costs. It is a complete
transaction through which the lessor, based on the user's specifications, purchases from the
provider the asset and request the lessee charges a fee for the use of the asset;
– Tax Leasing (US, UK) – the form in which the clauses strictly follow tax compliance
(annual income tax) and regulations to maximize tax benefits for both the lessor and the lessee.
Most of the deals in the United States and the UK are tax leasing, and their role is to maximize
earni ngs.
– Hire-Purchase is a method of purchasing goods by effectuation payments in installments
over time. The term "hire purchase" originates in the UK and look like the rent -ownership regime
in the US. Under a hire purchase agreement, the customer rents th e property and does not obtain
the right to proprietary until full payment of the contract. Offering hire purchase options, the
companies earn a profit by adding additional costs to the monthly payment which represents as
interest charges for the purchase. This time, the focus is on services provided by the leasing
company, with a direct relationship between the price of purchase and rental. The leasing company
assumes the risk and moral responsibility to provide spare parts, repair, equipment insurance and

6 http://www.leaseurope.org

10
payment various fees. A lease is terminated at the request of the beneficiary, who may request it
before the deadline. Both parties have the right to extend the duration of the contract after the base
period.
● Leasing classification by the content of the perceived tariffs:
– Gross leasing, which includes in its rates, in addition to the sale price of the goods (in
whole or in part), include and maintenan ce, service and repair expenses;
– Net Leasing, which includes in its rates only the price of the object to be leased.
 Leasing classification in according to the particularities of the leasing techniques7:
– Lease -back , includes the operations by which the owner, who is in urgent need of money,
sells a fixed asset (buildings, vehicles, equipment) of a leasing company and then hires it through
a regular contract. After the expiry of the primary period, the original owner has the right to
repurchase the company at a pre -established price;
– Time -sharing , involves the system of rentals in shared times, simultaneously, by several
enterprises;
– Experimental leasing is used to promote sales. This involves short term rental of machines
and utilities, experimentally provided that after the expiration of this pe riod they will be purchased
by the clients if they correspond or they will be returned if they have deficiencies;
– Renting is that short term or very short term lease agreement for renting day or by hour
of goods, in particular means of transport or const ruction equipment: cranes, excavators, etc. These
are considered by specialists as forms passing from regular rental to leasing. The main obligation
of the owner (lessor) is to provide the user the machineries, machines or means of transport, as
required b y the applicant, and to provide their service. The element of differentiation between
renting and leasing is the obligation of the rental company to ensure the maintenance of the rented
equipment, unlike the leasing company, which has no such liability ;
– Shareholder (crédit -bail d'actions) is a financial technique set up by the Groupement
Français d'Enterprises in France, invented to satisfy the growing demands of small and medium –
sized enterprises to attract funds. The operation is somewhat similar to the leaseing -back contract
used for mo vable or immovable property and involves the following steps: A small or medium –
sized company increases or establishes its own capital by issuing shares that are subscribed by an
investment fund. The investment fund transfers its shares to the issuing comp any, which in turn
will pay periodically a sum of money as rent, upon expiration of the contract, the issuing company
being able to redeem its shares at a price agreed with the investment fund , taking into and the rent
paid;
– Master Leasing (container lea sing) is a contract is used by transport companies, pecialized
companies dealing with the container park business. The appearance of this contract being
determined by the advantages of a carrier to rent the containers, compared to their purchase, which
would involve additional expenses related to the organization of efficient operation, maintenance
and repair, as well as training qualified staff. It is available in two versions:
a) term leasing – rental period ;
b) trip leasing – rental on the trip.
Master leasing system – is the form in which the major leasing companies sought to
strengthen their market positions, using as a specific way the complex lease agreements.
● Leasing classification by source of funding:
– Leveraged lease – the leasing company only finances part of the value of the asset, the
difference being covered by various creditors (which are all financial companies). This lease is
used if its object is the high value equipment;
– Leasing from producer – purchase fro m the producer of the leased goods.
Some of the above leasing operations tend to be used more often than others due to their
methodological simplification.

7 CECCAR, Clasificarea contractelor de leasing. Reflectarea în contabilitate a operațiunilor de leasing , Expertiza și
auditul afacerilor , nr. 11, 2018, http://www.ceccarbusinessmagazine.ro/

11
1.3. Stages of the leasing process

Generally, in deployment a leasing contract, at least five parties are involved in the
different stages of the financing process: the leasing company, the customer or the end -user, the
supplier of the purchased asset , the financing bank and the insurance company.
The st ages of the leasing process are:
– Choice of goods and supplier. Depending on the needs of the client, he decides on the
characteristics of the good and the supplier. All details related to the nature of the good (price,
technical characteristics, delivery details, installation and commissioning conditions for
equipment) will be negotiated by the user directly with the chosen supplier, they will specify and
respect all aspects negotiated in the sales contract and in the leasing contract;
– Obtaining the off er and asking for the lease. Based on prices negotiated supplier prepares
a general offer of funding, which will be calculated, the advance rate of leasing, insurance value,
etc. Following the transmission of the leasing request, the initial offer may be s ubject to changes
depending on the risk class to which the customer will be placed. The risk analysis is based on the
financial documents provided by the client (balance sheet, balance, profit and loss account) and
other required documents (leasing questio nnaire, presentation of the company's activity, business
plan, etc.);
– Analysis and approval of the leasing request . Evaluation leasing request is made by
specialists in a period not exceeding 48 hours. Depending on the complexity of the proposed
project financing, leasing company may request the customer of the further information on some
aspects analyzed, the final evaluation response will be based on prov iding the requested
information;
– Concluding the contract. If the answer is yes, the lease contract will be concluded and
will be sign. The lease contract may be financial or operational and this will include the clauses
negotiated by the user with the supplier of the asset and clauses specific to the leasing company
regarding the method of payment of r ates, insurance payments, and so on ;
– General insurance of the good. The good to be procured will be provided by the leasing
company, throughout the leasing contract, with the option for all risks, under the conditions
established with the insurance compan y and the financing bank and the premium of insur ance will
be paid by the user;
– Delivery of goods. The obligation to deliver the goods is the exclusive responsibility of
the supplier. In the case of imported products, the insurance premium will be calcul ated at the
value of the price including transport and insurance paid to the place of destination but a lso all
customs duties on goods;
– Terms and financing costs. Legal persons established on the basis of Law 31/1990
republished can obtain financing for the acquisition of leasing assets, as well as i ndividuals or
authorized person;
– The financed goods may be new, imported or purchased on the Romanian market or
second -hand in which case an additional assessment will be carried out by th e leasing company's
specialists;
– Various vehicles can be financed (cars, vans, minibuses) as well as medical devices,
telecommunications, computers, etc.
– The duration of the leasing contract may vary between 12 and 48 months, depending on
the client's needs and the outcome of the financial analysis.8
Documents required for analysis depend on the legal personality of the applicant (legal
person, authorized person, individuals), different types of documents are required to highlight the
creditworthiness and ability to pay.
In particular, the requested documents are:

8 http://www.leasing.ro/portal -v2/procedura -de-finantare/

12
– Application form or Order f orm, standard documents;
– Financial and accounting documents (verification balance, balance sheet etc., to present
financial situation in the last two years of activity );
– Lega l documents of the company wishing to acquire a good in a leasing system
(registration certificate, fiscal identification code, extract, certified statement , constitutive act ,
association documents and annexes, if applicable, etc.)
– Declaration of commitm ent of the user;
– Proforma invoice, with a detailed description of the good and the technical characteristics ,
the payment and delivery modalities, the price and the payment currency;
These stages and items vary from one leasing company to another, but the more the idea
should be the same.

1.4. Advantages and disadvantages of the leasing

Over time, the lease agreements have been improved by adding or removing the terms,
benefits or obligations. I will list below some of the advantages and disadvantag es of leasing.
For the user, leasing has the following advantages:
– Lease payments constitute an advantage by saving in the initial phase of equity, because
the payment of an advance is not obligatory;
– The constant amount of the lease rate facilitates m ore rigorous expenditure planning;
– The company's balance sheet does not change because both the assets and the liabilities
that the results of the lease do not appear on the sale, the rate of lease being considered as an
expense of the company;
– The duration of the contract may be so fixed that the enterprise is permanently equipped
with the most modern and best -performing machines;
– The supplier can agree to replace equipment that is under contract with another more
modern, the user thus being prote cted from the effects of moral wear;
– Leasing providers can agree to continue using the goods after the end of the contractual
period with a lower fee.
For the supplier , who may be the direct producer or the owner of the purchased goods to
be distributed through the leasing, it has the following advantages:
– Contributes to the promotion and development of exports, the supplier being able to carry
out, in addition to traditional and leased exports, the mechanism of which effectively contributes
to the expa nsion of demand for a range of high -value goods;
– It allows the attraction of new beneficiaries who can not pay the whole price in the case
of cash sales or the advance on credit sales;
– Winning new customers, and as such, the promotional role of leasi ng is also achieved by
the fact that certain equipment is first leased to convince the customer of their yield, in case of a
positive result, it can acquire the equipment (experimental leasing);
– Provides for additional earnings from the resale or re-rental of machines and equipment
that have been returned after the lease expires;
– The balance sheet is not affected by the debt and the sale of the receivables does not
require a credit application9.
Leasing can also be considered a form of privatization, which has advantages both for the
state – the property is temporarily preserved on the respective economic agents and can be
privatized after the client has demonstrated his managerial qualities – and for the respective clients,
thus to be a ttracted to this action, capable managers who have no capital, could not engage in such
business.

9 http://www.leaseurope.org

13
The real estate leasing with the irrevocable sale clause, having as object the assets of the
state trading companies and the autonomous regies, has spread wi dely at the national level through
its legal regulation, being on the one hand the main means of privatization, and, on the other hand,
the most advantageous alternative for small and medium enterprises, which can thus use
production, commercial or service spaces that they could not obtain under other conditions.
Leasing also has certain limits for both the customer and the supplier.
Among the disadvantages that leasing presents to the client we mention:
– Is effective only if the object of the leasing cont ract can be exploited during the entire
lease period;
– It is often more expensive than credit purchases, and the prospect of such an operation is
only justified if the amounts released can be invested in other very cost -effective areas;
– The operation be comes really profitable in limited numerical situations (we take into
account especially the financial leasing), in other words, the leasing has limits in terms of the
possibilities to give the importer economic advantages.
For leasing companies there are certain risks:
– Only the use of property is alienated, preserving the property, sometimes the goods can
be damaged by improper use, and the causes are difficult to establish;
– After the first rental, there is no longer the possibility to find other users .
Besides the advantages and disadvantages presented, we will present some aspects of the
leasing:
– The contractual conditions are standardized, which allows for operability and mobility in
the negotiations that are carried out for the conclusion of the o peration;
– The parties may include special clauses in the contract and usually they are considering
the choice of penalties system, depending on the nature and value of the contract;
– Payments for the right to use tangible or intangible assets are included in costs and as
such are deducted from taxable profit;
– Leasing facilitates the privatization of real assets – movable goods – ownership of
commercial companies to which the state is the sole or majority shareholder if least part of the
depreciat ion costs have been covered;
– In the case of judicial reorganization or declaring the user bankrupt, the owner does not
lose the goods but exist the risk not having to pay the outstanding amounts and the lessor reserves
the right to claim compensation.
Among the disadvantages outlined in the leasing practice would be that if the beneficiary
company can obtain preferential loans on advantageous terms, that it will no resort to leasing,
because the leasing will appear unsatisfactory. However, exist a number of 'hidden costs' that occur
in the case of these types of financing by credits and which must be taken into account, for
example: payment of an advance, solicitation of guarantees, insurance, etc. Disadvantages or
advantages of leasing operations exist, b ut they should not be exagerate in either one sense or
another, but should be regarded as complex and extremely useful operations in most of the times.
In Chapter 2 we will make a thorough analysis of the evolution regarding leasing market
in Europe, leasing market in Romania – features and trends and then a compare between leasing
and bank credit.

14

Chapter 2
EVOLUTION AND TRENDS REGARDING THE LEASING MARKET

2.1. Evolution regarding leasing market in Europe

The leasing market in Europe shows a period of steady growth in recent years. It can be
seen that countries with a strong economic capacity hold the highest shares, while countries with
a similar economy to Romania, are ranked roughly the same or below.
Leaseurope is the trade association r epresenting the European leasing and automotive
rental industries, represented approximately 94% of the European leasing market in 2016.
The European Federation of Leasing Company Associations – Leaseurope and is
composed of 45 Member Associations in 32 c ountries.
The countries represented are: Austria, Belgium, Bulgaria, Czech Republic, Denmark,
Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania,
Luxembourg, Malta, Morocco, the Netherlands, Norway, Poland, Portugal, Russ ia, Slovakia,
Slovenia, Spain, Sweden, Switzerland, Turkey, Tunisia, Ukraine and the United Kingdom.
Leaseurope has published the results of its preliminary survey for 2017 of the European
leasing market. The preliminary data shows for 2017 sustained that the leasing market register
another year of growth, which is similar to the high scores observed in 2016. In 2017, total new
business volumes increased by 9.6% compared to 2016 . The outstanding portfolio rising by 4.9%
of the member associations reporting, where outstanding contracts for equipment maintain stable
around the level as previous year and real estate had a contraction.
New business volumes for vehicles increased by 9.3% in 2017, over the past eight years,
continuing with an increasing trend. Equipment leasing increase of 12.9% compared to last year,
but the real estate leasing market decreased by 3.8%.
In many countries, due to economic growth, to resulte increase the investments in 2017
and leasing equipment increased more than in previous year s, exceeding the vehicle sector. This
shows that leasing is used as a form of financing in Europe.
The forecasts for the years 2017 and 2018 show that the European economy is stabilizing
after the crisis and the European leasing industry has the role of su pporting the economy. 10
We will analyze the leasing market in Euope using statistical data provided by the
Leaseurope, in the 2016 Annual Survey, Key Facts & Figures and extracts from different
specialized publications.
In 2016, according to Leaseurope – Annual Statistical 2016 , total new leasing volumes
worth is €333.7 billion and in compared with 2015, this represents an increase of 10.3%. In Europe,
the portfolio of leased assets (outstandings) at the end of 2016 grew by 6.4% in compared with
2015, reaching €779.1 billion in 2016 compared to 2015 when it was €756 .6 billion according to
Annex1 .
In the figure below ( Figure 1) we can see the total new leasing volumes per cluster in 2016
(in Billions Euro) .
According with the analyses data, the highest total new leasing volumes per cluster in 2016
were registered by UK (73.8 bil. Euro), followed by Germany (55.0 bil. Euro) and France (47.8
bil. Euro) and the lowest level s were recorded by Russia (10.1 bil. Euro) and the cluster formed
by Greece, Portugal, Spain and Morocco (16.8 bil. Euro).

10 http://www.leaseurope.org/uploads/pr180315_Preliminary%20Survey.pdf

15
We can say that approximately half of the national markets have registered an increase of
over 10%. Espec ially Russia, Ukraine and Greece demonstrated in 2016 increases in new volumes,
returning after a few years of low levels.

Figure 1. Volumes per cluster in 2016 (in Billions Euro)
Sourc e: http://www.leaseurope.org , Leaseurope Facts & Figures 2016

In the figure below ( Figure 2) we can see the leasing growth rates based by country in
2016 , growth rates are adjusted for exchange rate fluctuations.

Figure 2. New leasing growth rates by country in 2016
Sourc e: http://www.leaseurope.org , Leaseurope Facts & Figures 2016

16
The statistical analysis shows that all associated member countries reported an increase in
2016 as compared to 2015 and for total new leasing volumes, in 2016 grew by 10.3% compared
to 2015, in accordance with the Annual Survey 2016 ( Annex 1 ).
In the figure below ( Figure 3) we can see in 2016 the total new leasing volumes (the annual
growth rates based on a homogenous sample of members reporting from year to year in
Leaseurope ’s Annual Statistical Enquiries and are adjusted for exchange rate fuctuations from
2007 onwards ):

Figure 3. Total new leasing volumes (a nnual growth rates )
Sourc e: http://www.leaseurope.org , Leaseurope Facts & Figures 2016
It can be seen that we have a positive annual growth rate starting with 2013 for total new
leasing volumes , in 2016 grew by 10.3% compared to 2015 , but it ha s not yet reached the level of
2005 when we had the highest annual growth rate of 13.5% . It is noted that the lowest level for
total new leasing volumes was registered in 2009 , when it was recorded a decrease of -30.3%
compared to 2008 .
In the figure belo w (Figure 4) we can see the new leasing volumes per asset type in 2016 :
equipment inclusive vehicles and real estate :

Figure 4. Leasing volumes per asset type (annual growth rates )
Source: http://www.leaseurope.org , Leaseurope Facts & Figures 2016

17
It can be seen that we have a positive annual growth rate starting with 2014 for leasing
volumes per equipment inclusive vehicles , in 2016 grew by 10.7% compared to 2015 according
to Annex2 , but it has not yet reached the level of 200 7 when we had the highest annual growth rate
of 14.7%. It is noted that the lowest level for total new leasing volumes per equipment inclusive
vehicles was registered in 2009 , when it was recorded a decrease of -30.3% c ompared to 2008 .
For real estate annual growth rate in 2016 gre w by 1.8% compared to 2015 according to
Annex3 . It is noted that the lowest level for total new leasing volumes per real estate was registered
in 20 12, when it was recorded a decrease of -32.3% compared to 20 11 and in 2005 it was recorded
the highest annual growth rate of 24.8%.
It can be noticed that for real estate leasing it is much more difficult to achieve a positive
annual growth rate after the financial crisis that has taken place in Europe, because the value of
the investments is much higher and implicitly the risks of project realization are much higher and
the investors have become more cautious.
In the figure below ( Figure 5) we can see the new leasing volumes per asset type in 201 6:
passenger cars, commercial vehicles , equipment and real estate:

Figure 5. Leasing volumes per asset type in 2016
Sourc e: http://www.leaseurope.org , Leaseurope Facts & Figures 2016

Automotive assets (passenger cars and commercial vehicles) was the largest segment of
the European market of leasing assets, representing 67% (€225.3 billion) of total new volumes
granted during 2016 . The equipment representing 2 8% of total new volumes granted during 2016
and real estate does not exceed 5%.
In the figure below ( Figure 6) we can see the new leased equipment volumes per asset type
in 2016: passenger cars, commercial vehicles, machinery &industrial equipment, computer&
business machines and big/other .
The machinery and industrial equipment segment inceasing by 10.3% in 2016 compared
to 2015, to reach 16% (€ 52.1 billion) of new equipment leasing volumes .
The passenger car sector growing by 12.6% in 2016 compared to 2015, to reach 52% of
new leased equipment volumes per asset type and the commercial vehicles inceasing by 13,1% in
2016 compared to 2015, to reach 19% (€ 61.2 billion) of new equipment leasing volumes.
The computer&business machines representing no more 5% of new equipment leasin g
volumes.

18

Figure 6. Leased equipement volumes per asset type in 2016
Sourc e: http://www.leaseurope.org , Leaseurope Facts & Figures 2016

In the figure below ( Figure 7) we can see the growth rates for new leased equipement
volumes per asset type in 2016: passenger cars, commercial vehicles, machinery &industrial
equipment, computer&business machines , bigs (ships, aircraft, railway and rolling stock segment ,
etc.) and other types of equipment ( includes energy generating assets, such as photovoltaic panels) :

Figure 7. Growth rates for leased equip ment volumes per asset type in 2016
Sourc e: http://www.leaseurope.org , Leaseurope Facts & Figures 2016

In Figure 7 we observe that the bigs (ships, aircraft, railway and rolling stock segment ,
etc.) growth rate in 2016 grew by 12.5% compared to 2015 and for other types of equipment
(includes energy generating assets, such as photovoltaic panels) growth rate in 2016 grew by 5.8%
compared to 2015 for new leased equipment volumes .
In contrast, computer&business machines was recorded a decrease of -7.4% in 2016
compared to 2015 for new leased equip ment volumes .

19
In the figure below ( Figure 8) we can see the new equipment (including vehicles) leasing
volumes per client category in 2016 : consumers, public sector, services, agriculture,
forestry&fishing, manufactur ing industry&construction and other.

Figure 8. Equipment (including vehicles) leasing volu mes per client category in 2016
Sourc e: http://www.leaseurope.org , Leaseurope Facts & Figures 2016

New leasing volumes for consumers representing 24% and “was the only client category
that has been steadily increasing since 2010 ” conform Leaseurope Facts & Figures 2016 .
New leasing volumes for public sector as well as and for agriculture, forestry &fishing
representing no more 3%.
The highest level for new leasing volumes was registered for services representing 43%.
In the figure below ( Figure 9) we can see the new real estate leasing volumes per building
type in 2016: industrial buildings, office buildings , retails outles, hotels&leisure, utilities and
other.

Figure 9. Real estate leasing volumes per building type in 2016
Sourc e: http://www.leaseurope.org , Leaseurope Facts & Figures 2016

20
New real estate leasing volumes growing by 1.8% in 2016 compared to 2015 to reach €15.8
billion.
The largest segment was industrial buildings represented 33% of total new real estate
leasing volumes and the smallest segment was hotels and leisure buildings represented 3% 11
Each year, Leaseurope performs a top of European leasing companies , parent or stand –
alone companies (bank related, captive or independent leasing companies) . These are ranked
according to the total new business within Europe in 2016 (Annex 4 ).
By analyzing Leaseurope's top leasing companies in 2016, we will find some of them
on th e leasing market in Romania: Societe General, Deutsche Leasing, UniCredit Leasing , ING
Lease, Ra iffeisen Leasing, Alfa -Leasing, NLB Leasing.
In Romania, according to a newspaper “Ziarul Financiar ”12, UniCredit Leasing has
consolidated its first place in the leasing market in 2016 and has finance d goods value 1.57 -1.62
billion lei (350 -360 million euros) , followed by BCR Leasing and Impuls Leasing.

2.2. Leasing market in Romania – features and trends

The leasing market in Romania experienced a gradua l development, becoming a viable
alternative to funding equipment and vehicles, but less used for real estate investments. Companies
of leasing are non -banking financial institutions (NBFIs), which carries out lending activities , but
towards difference fro m banks do not have customer deposits in the portfolio.
The economic crisis has transformed the market leasing into a constant liquidity provider
for the private sector, whose funding was limited to the period of the financial crisis, providing
real suppor t economy especially small and medium enterprises (SME s), the main beneficiaries of
financing through leasing.
In principle, leasing is asset financing and ownership of the asset provides a sufficient
guarantee for accessing funding in most situations. Leasing is usually a medium -term financial
instrument used to acquire new or second -hand assets.
The leasing sector can represent a decisive role in financing developing countries, which
are characterized by a low capitalization of the banking system and l ess developed financial
markets. Due to the low market financial in Romania, financing through banks and capital markets
is available to large companies in particular, but small and medium size enterprises face numerous
financing difficulties.
Although SME s are considered to be the backbone of the economy, they have a limited
range of financial instruments because of the restrictive eligibility conditions for contracting
commercial bank loans. Usually, in financing developing countries, SMEs do not have suf ficient
collaterals or credit history, and thus can not access classic banking financing, while the leasing
offers the opportunity to acquire a wide range of the assets needed to develop the company's
operations.
By realizing a stable fiscal and legal envi ronment applicable to the leasing sector, the
authorities support the development of the real economy and implicitly of the most vulnerable
sectors of the economy – SMEs.
The peak of the leasing market in Romania was reached in 2007, when the total value o f
the new leasing contracts was about EUR 5 billion, recording an increase of 51% compared to the
previous year.

11 http://www.leaseurope.org , Leaseurope Facts & Figures 2016
12 http://www.zf.ro/banci -si-asigurari/topul -companiilor -de-leasing -unicredit -isi-consolideaza -pozitia -de-lider-iar-
bcr-trece -pe-locul -secund -16448622

21
The fiscal code underwent significant changes in the second half of 2008, influencing the
development of the financial leasing. Although the Ro manian economy registered the highest
growth rate in 2008 (7.3% compared to 2007), the value of the new leasing contracts decreased a
little (- 3% compared to 2007 ), recording the first contraction.
The year 2009 was a turning point for the leasing market , when leasing companies being
heavily affected by the economic crisis, so the total value of the new leasing co ntracts fell to EUR
1.3 billion, reaching a level similar in the year 2000 .
Since then, although the economic conditions have been difficult, the total annual value of
new leasing contracts did not show significant variations, reflecting the stabilization of the leasing
market .
The financial crisis affected the leasing market in Romania, suffering the sharpest
contraction between all countries c onsidered, the penetration rate of financial leasing to GDP was
4.8% of GDP in 2008 versus 1.5% of GDP in 2013.
The low value of new financed leasing contracts can be attributed to the low investment
demand of companies and the difficulty in repossessing the assets of customers who are unable to
pay.
From the data presented, one can see a direct correlation between the GDP growth and the
evolution of the financial leasing, although there is lag of 1 -2 years between them.
When we have a decrease in the tota l value of the new leasing contracts for the previous
year, a slowdown or contraction of GDP is observed next year, correlated with the decline of the
leasing market.
Thus, the leasing market can be considered a barometer of the evolution of the economy
in the medium term, sending early warnings, as it reflects the demand of financing companies
through leasing operations, especially for SMEs, which are the main clients of the leasing
companies.13
Next, we will analyze the leasing market in Romania using stat istical data provided by the
Financial Companies Association in Romania – ALB in 2015 as well as presentations of the
evolution of the financial leasig market in 2016, Q3 -2017, closing 2017 and extracts from different
specialized publications.
In the figur e below ( Figure 1 0) we can see the Romanian Leasing Market by Company
Type in 2015:

Figure 1 0. Romanian Leasing Market by Company Type in 2015
Source: http://www.alb -romania.ro/statistici_2015.php

13 http://www.alb -romania.ro/publicatie_2014.php

22
The chart shows the main categories of companies responsible for leasing transactions. The
main component, a participant on the Romanian leasing market, is represented by NBFIs Banks'
subsidiaries (for example Alpha Bank, BCR, BRD, Volksbank, Raiffeisen) holding a share of over
81% of the total volume of transactions registered in 2015. The other categories, NBFIs captive to
producers (for example Afin, Renault, Porsche) with a market share of 13% and Independe nt
NBFIs (for example TBI Leasing) with a market share of 6%.
In the figure below ( Figure 1 1) we can see the Financial Leasing Market Evolution:

Figure 1 1. Financial leasing market e volution
Source: http://www.alb -romania.ro/statistici_2015.php

The chart shows the evolution of the leasing market in Romania for the period 2008 -2015.
The decline recorded during the financial crisis, which has significantly affected the leasing
operations in Romania, is marked by a sharp contraction compared to many European countries.
The year 2010 marks the lowest value of the leasing operations, the total value reaching
1.1 billion Euros. This is justified by the decrese in companies' investment demands and the
difficulty of reintroduction the assets with regard to clients temporarily incapacitated to pay.
During the period 2011 – 2012, the market leasing has a successive growth, which marks
the economic evol ution of Romania, but is followed by another period in which the leasing market
is recording a new decline, corresponding to the post -crisis recession period.
The current data shows an improved situation of the market evolution, in 2015, the total
value of the financial leasing operations amounting to 1.6 billion Euros, the evolution of the leasing
market being directly proportional to the general economic situation of Romania.
Another important aspect is share the total of leasing operations in Romania to GPD. For
the years 2015, 2016, the total volume of finance provided by leasing firms exceeds 1% of GDP,
which is well below potential and below other European countries.
The financial leasing market concluded 2016 with a 20% increase compared to 2015 and
a total new value of approximately 2 billion Euro, of which 77% are for the acquisition of vehicles.
We observe in the leasing market in Romania that the segment automoti ve assets
(passenger cars and commercial vehicles) is with about 10% higher compared to the leasing market
in Europe, in Europa representing 67% of total new volumes granted during 2016 .
Equipment financing remains below potential in 2016, accounting for o nly 20% of total
new leasing volum, lower than in the leasing market in Europe, where the equipment representing

23
29% of total new volumes granted during 2016. We notice that the real estate leasing market in
2016 representing only 3% of total new leasing v olum in Romanian, lower than in the leasing
market in Europe, where the real estate leasing does not exceed 5%.

Figure 1 2. The evolution of the leasing market (new leasing volum )
Sourc e: Presentation ALB Romania in 2016
In Figure 1 2 we can obseve that the leasing market has the best results in 2016 since the
beginning of the economic crisis, the dynamics of the total new leasing volum being two digits,
due to the good evolution of the Romanian economy. Starting with 2014, we note the positive
trend for each segment: vehicles, equipments and real estate, with accelerated growth for
vehicles . For real estate growth is low because the level of investment is high and investors have
become more prudent as a result of the financial crisis.
In the Figure 1 3 show the evolution of new leasing volumes per asset type :

Figure 1 3. The evolution of new leasing volumes per asset type
Source: Presentation ALB Romania in 2016
In Figure 1 3 we can observe that increase the segment vehicles represent ed 77% of total
new volumes granted during 2016 is reflected by a reduction in equipments t o 20 % and real estate
to 3 %. In the period 2010 -2016, the accelerated growth of the vehicle segment is reflected in the
contraction of the other two segments: equipment and real estat e.
New volumes leasing in the first nine months of 2017 increased by 14% compared to the
same period last year and 2017 was concluded to approximately 2.2 billion Euro, demonstrating
that growth is being maintained and in 2017.
Growth factors were financia l leasing in the car sector (+ 24% in the first nine months of
last year) and light commercial vehicles (+ 27%). For the heavy commercial vehicles, the trend
was reversed ( -2%), the demand being lower in 2017 compared to 2016.
The leasing sector was positi vely influenced by the increase in demand for new cars, which
advanced 17% in the first three quarters of the year 2017 and second -hand vehicles grew by 70%.
The leasing for equipment has moderate growth (+ 10%) as investment in various sectors
of the economy. Within them, agricultural equipment are the top, with a growth of 48%, because

24
exist the leasing companies dedicated to the financing of this sector in the local market, at
unbeat able costs, these being in a traditional business relationship with large machinery
manufacturers from abroad.
Regarding the duration of financial leasing contracts, no new items appeared, with the
average being between 4 and 5 years.14
In the Figure 1 4 we can see Romanian financial leasing market structure by customer type:

Figure 1 4. Romanian financial leasing market structure by customer type
Sourc e: http://www.alb -romania.ro/statistici_2015.php

In view of the structure of the leasing market according to the category of users, the
situation shows that corporations have the largest share.
In each analys ed year, we can see the share is over 97% of the total funding is for corporate,
because most companies want to expand their own economic activities by purchasing equipment,
machinery or other assets needed for development. Most legal entities that use leasing finance are
small and medium institutions, f or the reason that SMEs or new companies do not have the
possibility to obtain credit through commercial banks. They do not have a credit history or the
existence of collateral assets. As a result, in the current economic situation of Romania, leasing
financing represents a significant advantage for SMEs.
In relation to other categories of users, they are composed of segments of retail and public
and cover 3% of the total leasing market. Although offerings include various assets (vehicles,
equipment, machinery, real estate) and oareacare flexibility of operations, retail segments and the
public does not look so interested, most likely due to nedeductibilitatii tax, preferring a traditional
financing on term long.
Concluding, the evolution this indicato r in 2013, 2014, 2015 does not show any major
changes, with the situation presenting similarly in each period of recent years, with very low
fluctuations.
In the Figure 1 5 we can see Romanian leasing market (equipments and vehicles) structure
by acquisitio n type:

14 http://www.piatafinanciara.ro/2017 -pe-crestere -ce-stim-si-ce-nu-stim-despre -leasing/

25

Figure 1 5. Romanian leasing market structure by acquisition type
Sourse: http://www.alb -romania.ro/statistici2015.php

An interesting statistic comes from the type of asset used (new or second -hand assets).
Notable is the fact that the share of second -hand assets registered a significant increase in the last
year taken for analysis, but this growth continued in 2016 and 2017. The increase in second -hand
assets in the portfolio of leasi ng companies came as a result of financial crisis , as a consequence
of the fact that the purchasing power in Romania has diminished and customers have looked for
similar alternatives but at low costs.
This can be explained by the fact that operational leas ing transaction are increasing,
implying reuse of assets: vehicles, machinery and equipment.
This increase in second -hand assets in the company's portfolio may have a negative impact
on Romania's economy as a result of encouraging the population to buy re -used products which
would obstruct the development of manufacturing enterprises.
In Figure 1 6 is presented the Romanian financial leasing market structure by duration of
contract :

Figure 1 6. Romanian financial leasing market structure by duration of contract
Sourse: http://www.alb -romania.ro/statistici_2015.php

26
In Figure 1 6, it can be noticed that the largest share for leasing financing is that of contracts
with a duration of 4 -5 years.
In the coming years, as the financial leasing perspective in Romania, it is wanted to
increase the real estate segment, which requires long term contracts.
The segment with the higher impact on the leasing market is that of the vehicles. In this
context analysis is performed on the main components by the vehicles.
The Figure 1 7 present vehicles’ f inancing weight in the financial leasing market :

Figure 1 7. Romanian financial leasing market – vehicles’ financing weight
Sourse: http://www.alb -romania.ro/statistici_2015.php

The graph above highlights that between 2012 and 2015, the passenger cars has the highest
share, followed by the category of heavy commercial vehicl es. Even if the passenge r cars have the
largest share in total vehicle financing, this segment has been declining during this period and the
category of commercial vehicles has increased.
In Figure 1 8, we can analize vehicles’ financing by value :

Figure 18. Romanian financial leasing market – vehicles’ financing by value
Sourse: http://www.alb -romania.ro/statistici_2015.php

27
As expected in periode 2012 -2015, the passenger cars are first in this ranking with a value
of 521,625 million Euro for 2015, recording a 13% increase over the previous year. It is noting
that the segment of heavy commercial vehicles has a significant increase in the market,
establishing annual increases, doubling the value i n 2015 compared to 2012. Regarding the light
commercial vehicles with a value of 124,324 million Euro for 2015, these recording a increase of
27% over the previous year. Other vehicles segment with a value of 16,234 million Euro for 2015
recording a decrea se of – 30% over 2014, but this value is less significant comparative with the
others segments analyzed.
The results in Figure 1 7 and Figure 1 8 are the effect the instability of the automobile
industry which has seen major fluctuations in Europe in the of late years. Also, the increase in the
level of contracting of heavy commercial vehicles corresponds to the constant development of the
Romanian economy.
In Figure 19 we can see Romania leasing market – equipment financing 2014 versus 2015:

Figure 19. Romanian leasing market – equipment financing
Sourse: http://www.alb -romania.ro/statistici_2015.php

Equipment leasing is a long -term solution for cashless companies or an entrepreneur who
does not want to invest their own money. All types of equipment can be leased in our days. This
may range from complex machines for a factory to coffee machines in an office.
We can see that in 2015 the financing of agricultural equipment remains the largest
segment, even if declined from 26% in 2014 to 24% in 2015, this segment will increase in the next
period, because the leasing purchase became eligible for the acqu isition European funds in the
financial section by the National Rural Development Programme Romania 2014 -2020 . The
condition is that after no more than five years, the beneficiary will become the owner of the
equipment purchased by leasing 15.
Other importa nt equipment leasing segments: construction, electrical devices, medicale (in
rising in 2015 compared to 2014) and food & beverage, metal processing, forklift (in decreasing
in 2015 compared to 2014).
As opposed to financial leasing, operational leasing im plies, in the true sense of the word,
the use of the asset financed over a limited period of time, without taking risks and benefits to the
owner for the punctual solution of specific activities.

15 http://www.fondur i-structurale.ro/

28
The user has decided, since signing the contract, to return the asset financed at the end of
the lease period, and the lessor would take the risk of realizing the value remaining unamortized
at the end of the contract.
An operating lease is useful when an enterprise needs to replace its assets on a regular basis
by exchanging old assets for new ones at regular intervals. For example, the lessee has decided to
change the photocopier every two years (when the manufacturer's warranty period expires), he
may choose operating leases to have always the latest generatio n equipment.
Cars are the most purchased through operating leasing. Operating leasing does not imply
any advance, but only monthly payment of a single invoice to cover the costs of all services. The
range of related services is diversified, covering all cu stomer needs, from finance the acquisition,
maintenance, insurance, periodic technical inspections, to roadside assistance. In the case of
operational leasing, at the end of the contract period, the car returns to the leasing company.
Figure 2 0 show the p ercentage of operating lease in total vehicles registrations (passenger
cars + light commercial ve hicles) :

Figure 2 0. The percentage of operating lease in total vehicles registrations
Sourse: http://www.aslor.ro/statistici/
Based on the analysis of the graphs, we notice that the percentage of operating lease in
total vehicles registrations have increased in the period 2007 -2013 and between 2014 and 2015
has declined slightly each year. At the end of 2016, the percentage forecasted in May 2016 was
not rea ched.
Approximately 14,400 vehicles were registered by operating leasing companies out of a
total of 108,000 cars and light commercial vehicles registered, accounting for 13.3% of total new
registrations in 2016, according to the press release of the Association of Operational Leasing
Companies (ASLO) of Romania.
In 2016 the share of full service (insurance, periodic technical inspections, to roadside
assistance) in the portfolio of leasing companies increased by over 7%, as a proof of increasing
the understandin g of the concept and benefits of operating leasing.16
The operating leasing market is growing in 2017 , and the most interested in such contracts
are multinational companies, but in the last few years, operational leasing is al so useful local
businesses and start-up companies.
The following section contains the final provisions of the thesis, presenting the general
conclusions on the elements identified during the analysis.

16 http://www.aslor.ro/news/comunic at-de-presa -aslo-19-01-2017/

29
2.3. Leasing versus bank credit

Leasing, as a financing operation, is derived from the classic credit operation and is made
up of the need to expand it, with the purpose of supporting investment, completing the sphere of
innovation and action of money trading.
The leasing operations in Romania prove to be an alternative for the financing of assets of
any kind.
The main difference between leasing and bank credit is the ownership of the fianancial
asset.
In the case of the leasing operation, the owner of the asset remains the leasing company,
the user receiving only the right of use on the respective asset against a periodic payment, called
the leasing rate. At the end of the leasing period, the user may choose to purchase the asset, contract
extension or even termination of contractual relations, but the user becomes the owner of the asset
only after the buying option has been expressed, payment of residual value and observance of all
contractual obligations.
In the case of a bank loan for the purchase of any type of asset, the borrower becomes the
owner of the asset in the first moment, ha ving the right to dispose of this in any time of the
execution of the contract, respecting the obligations assumed by the bank. Thus the main difference
is the transfer of ownership. In the case of credit, the purchaser becomes the owner of the asset at
the moment when this is purchase from the supplier, subsequently paying the credit rates. Under
the lease, the asset remains the property of the financer until the last installment is paid. The major
advantage of financial leasing is that the lessee records the asset in its own patrimony, with the
right to calculate the afferent depreciation, without being the owner of the asset and without being
obliged to become.
Another difference is to highlight the basis of calculation of both the amount of financing
and the input value, and the calculation is execute on different bases. In the case of bank credit,
the purchase price will include all the additional costs of the asset, the total price includes the value
added tax, any excise tax, the cost of transport and insurance to the destination and so on. In the
case of leasing, the purchase price includes the transportation and insurance paid until destination
CIP (Carriage and Insurance Paid To) or at a price including the transportation paid until
destination CPT ( Carriage Paid To), excluding any extra cost or taxes other than price from the
supplier.
The interests, the commissions and other fees are different in value, the difference being
given to the terms of financing and efficiency, these criteria making anothe r distinction between
the two forms of lending. If are usually required for a bank loan additional bank guarantees or
collateral , in the case of leasing it is assumed that the asset itself is the guarantee, so the procedures
for obtaining financing are si mpler and more accessible to larger categories of clients.
If is taken into account the Romanian leasing legislation, the early closing of the leasing
contract is not valid until one year, this being exclusively due to the nature of the contract, while
in the case of the loan, the owner can call at any time the variant of the ant icipated ending of the
contract . The early repayment of the borrowed amount is allowed both in the case of leasing and
the bank loan with the payment of predetermined costs.
The Romanian legislation in force institutes a numb er of advantages in relation to the
acquisition of leasing assets, thus trying to support the investments. One of these advantages is
determinated by the facility introduced in the case of the acquisition of g oods predisposed to be
taxed in report of the customs debt, calculated at the end of the lease term at the residual value
rather and not the full value of the goods, as in the case an ordinary purchase. On the other part,
taking the example of an asset pro duced outside the European Union, the Romanian legislation
stipulates that the user is obliged to pay the customs duty calculated to the residual value of the
asset at the moment of the conclusion of the lease, which can not be less than 20 % of the input
value of the asset. In this way the elements of the customs debt will be paid at the end of the leasing
period and will be calculated at the residual value. In the case of a credit contracted for the
acquisition of the asset outside the European Union, the consumer will pay the customs debt,
respectively customs duties and the customs commission, calculated at the integral value of the

30
asset.
Leasing is more advantageous than credit for SMEs and start -up companies unable to
obtain a credit from a commercial bank because they do not have a robust credit history for to
contract a traditional lending and the finance by leasing does not require collateral assets from
customers.
Although leasing companies offer diverse financing tools and a flexible financing of the
main types by assets (equipment, vehicles, real estate), due to tax deductions, companies occupy
a higher share in the total leasing market than private individuals which prefer financing through
loans from banks.
An advantage of financial leasing comp ared to a bank credit is the customer's accessibility
to more sales channels: the retail bank network, directly from leasing companies, from brokers,
dealers or even from producers.
Similarities between bank lending and financial leasing are that both the user and the
borrower may be the owners of the assets after all the payments have been made, on the condition
that both the user and the borrower to respect the terms and conditions of the financing contracts.
In both cases, the risks and costs of ownershi p, such as maintenance and insurance of the goods,
remain the responsibility of the user and the borrower. Neither the leasing company nor the bank
will not benefit from the increase in the value of the asset.
From an economic point of view, the decision to lease or make a loan depends on the total
cost of the acquisition, including the value of the rates.
Taxes are a powerful argument for choosing leasing instead of buying the asset by credit,
but it is not the alone that could explain this choice. It is important to consider the non -monetary
benefits, such as the contract of leasing that are more flexible by point of view of customer needs:
the option to renoun ce the lease before the date of the contract closing, the possibility to renew the
contract by a dditional periods, the option to buy the asset at the end of the contract.
Leasing also has another important advantage over standard bank credit, in the sense that
it is more efficient in regarding of leasing time, the assessment keeps less time, while the approval
of bank credit applications takes a longer period of time and leasing finance has higher chances in
compared with a bank credit because under the lease the risks are easier to control. This has led
many banks to set up a leasing division for t hese to have more customers.
The size of the enterprise is another reason for contracting an asset in leasing. Thus, it can
be said that in a small company the financing decision is determined more by the growth
opportunities and the big companies take thi s decision for fiscal reasons. It is scientifically proven
that leasing allows small companies to survive and develop, and the results show that less
profitable firms are more predisposed to make a lease in front of profitable companies. In the case
of cre dit institutions, the lender has the difficulty of accurately estimating the risk for each client,
given the diversity of projects that clients want to realize.
Financial leasing can also stimulate investments and the activity investors. Due to the
carefu l financial monitoring of the leasing company on the user, investors' confidence in a
company may increase. The stability and the fact that a company is being analyzed by the lessor
can also be taken as a signal to increase the company's productivity and p rofitability and then the
company becomes more attractive to investors.
At the base of leasing access is the capacity of a business to increase revenue by using the
asset and this ability is verified by the financier before approving the financing. The fi nancier must
ensure that the company is capable to make the lease payments on time and benefit from the
surplus income to continue develop the business.
For a comparative analysis of the credit and the financial leasing, we used a credit
simulation and a financial leasing offered by car manufacturer Dacia – brand of the Renault Group
for the car Dacia Logan SL Plus 1.0 12 V 73 CP in value 7,980 Euro (included VAT) .17
Figure 21 show the credit simulation for credit duration by 5 year s, for a standard credit
and a credit Dacia all inclusive (car warranty and included revisions) for a period of 3 , 4, 5 years :

17 https://www.dacia.ro/promotii -si-finantare/promotii -finantare.html

31

Figure 21 – The credit s imulation for credit duration of 5 year s
Sourse: https://finantare.dacia.ro/
In Figure 21 – we can observe that for standard credit (5 year s), no included revision and
free rates and this is the most disadvantage and the most popular choice is credit Dacia All
inclusive 5 year. Also, we can see that monthly fixed rate increases slightly , the interest fixed
decreases and the number by the monthly free rates rises with the increases duration all inclusive
of the contract (car warranty and included revisions) , for the same contractual period of 5 years .
The Figure 21 shows that in th e case of the credit, the advance rate may be between 5% –
70% and credit duration may be between 12 months – 60 months. The total cost of the credit
includes: folder analysis fee – 270 lei, monthly administration fee – 45 lei, insurance Trafic
Accident – 12 lei / month, registration fee in the Electronic Archive for Security Interests in
Movable Property (AEGRM) – 65.70 lei. It is used the exchange rate 1 Euro = 4.6796 lei.
For a comparative analysis of the offered by the financiar leasig simulation with a carefree
period of 3 years, 4 years, 5 years (revisions included), a contract duration by 5 year s, advance
rate by 35% (7,980 Euro * 35%= 2,793 Euro) and residual value 0.1% (7,980 Euro*1%=7.98
Euro), we centralize the dat es in Table 1.

Table 1 – The fina nciar leasig simulation with a carefree period of 3 years, 4 years, 5 years
(revisions included) and a credit duration by 5 year
Financiar
leasing
simulation Financiar
leasing
duration %
advance
rate
Euro monthly
fixed
rate lei monthly
fixed
rate
Euro %
interest
fixed
Euro monthly
free rate included
revisions car
warranty residual
value lei residual
value
Euro
(0.1%)
Leasing
3 years
carefree 5 year s 35% 421 90 4.9% 1 3 year 3 year
or
100,00 0 km 37 8
Leasing
4 years
carefree 5 year s 35% 431 92 4.5% 2 4 year 4 year
or
100,000 km 37 8
Leasing
5 years
carefree 5 year s 35% 440 94 3.9% 3 5 year 5 year
or
120,000 km 37 8
Sourse: https://www.dacia.ro/promotii -si-finantare/promotii -finantare.html

TheTable 1 show that:
– at the end of the leasing contract, the residual value paid is small by aproximate 8 Euro;
– monthly fixed rate increases, the interest fixed decreases and the number by the monthly
free rates rises with the increases duration by carefree of the contract (car warranty and included
revisions).

32
For a comparative analysis detailed of the offered by the credit, we realize the credit
simulation for credit dur ation by 3 years, 4 years and 5 years, for a standard credit and a credit
Dacia all inclusive (car warranty and included revisions) for a period of 3 years, 4 years, 5 years
and advance rate by 35% and we centralize the dates in Table 2.

Table 2 – The cre dit simulation for credit duration between 3 -5 year, for a standard credit
and a credit Dacia all inclusive for a period of 3, 4 and 5 years and advance rate by 35%
Credit
simulation credit
duration %
advance
rate lei monthly
fixed
rate lei monthly
fixed
rate
Euro %
interest
fixed
lei monthly
free rate revision
included car warranty economy
lei economy
Euro
Standard
Credit 3
years 3 year s 35% 835 178 9.5 % 0 No 3 year
or 100,000 km 0 0
Dacia All
inclusive 3
years 3 year s 35% 845 181 7.5% 1 3 year s 3 year
or 100,000 km 2,136 456
Dacia All
inclusive 4
years 3 year s 35% 850 182 6.9% 2 4 year s 4 year
or 100,000 km 2,433 520
Dacia All
inclusive 5
years 3 year s 35% 834 178 6.9% 3 5 years 5 year
or 100,000 km 3,286 702
Standard
Credit 4
years 4 year s 35% 667 143 9.5 % 0 No 3 year
or 100,000 km 0 0
Dacia All
inclusive 3
years 4 year s 35% 666 142 7.5% 1 3 year s 3 year
or 100,000 km 3,269 699
Dacia All
inclusive 4
years 4 year s 35% 676 144 6.9% 2 4 year s 4 year
or 100,000 km 4,015 858
Dacia All
inclusive 5
years 4 year s 35% 687 147 6.9% 3 5 year s 5 year
or 100,000 km 4,471 955
Standard
Credit 5
years 5 year s 35% 567 121 9.5 % 0 No 3 year
or 100,000 km 0 0
Dacia All
inclusive 3
years 5 year s 35% 561 120 7.5% 1 3 year s 3 year
or 100,000 km 3,480 744
Dacia All
inclusive 4
years 5 year s 35% 568 121 6.9% 2 4 year s 4 year
or 100,000 km 4,219 902
Dacia All
inclusive 5
years 5 year s 35% 577 123 6.9% 3 5 year s 5 year
or 100,000 km 4,569 976
Sourse: https://finantare.dacia.ro/

The dates in Figure 21 are also centralized in Table 2. In addition to the observations made
on Figure 1 and following the analysis of the dates in Table 2, we can add that:
– monthly fixed rate decreases with the increase in the duration of credit;
– the advance rate may be lower (up to 5%), but the disadvantage is that the monthly fixed
rate will be higher.
From the analysis of Figure 21, Table 1 and Table 2 we not e the followings :
– monthly fixed rate for financiar leasing simulation is smaller co mparate with credit;
– monthly fixed rate increases slightly, the interest fixed decreases and the number by the
monthly free rates rises with the increases duration warranty and included revisions, for the same
contractual period of 3 years, 4 years and 5 years;
– the interest fixed decreases with increase the duration of the contract;
– because it is an offer from a producer of goods, at the end of the leasing contract, the
residual value paid is small.
In conclusion, we can say that the leasing from the producer in compared with the credit is
more advantageous, this being a way for the producer to increase his sales.

33

Conclusions

Leasing is used in the procurement of tangible assets, being considered as an important
market instrument. From an economic point of view, leasing is a way of reorienting investments
by attracting new sources of finance to the economy, representing a solut ion for launching on the
market of products with limited demand and low purchasing power. Leasing can be used to enter
new markets and conclude new partnerships, being an important factor in developing foreign trade,
thus attracting important financial res ources in safe conditions.
Practically, leasing provides full financing for an investment through borrowed funds
without the beneficiary taking precautionary measures, as opposed to traditional investments
where the beneficiary enterprise support part of t he value of the investment. First of all, enterprises
pursuing business expansion and performance enhancement use leases as financing techniques.
The leasing market in Romania experienced a gradual development, becoming a viable
alternative to funding equi pment and vehicles, but less used for real estate investments.
The economic crisis has transformed the market leasing into a constant liquidity provider
for the private sector, whose funding was limited to the period of the financial crisis, providing
real support economy especially small and medium enterprises (SMEs), the main beneficiaries of
financing through leasing.
In principle, leasing is asset financing and ownership of the asset provides a sufficient
guarantee for accessing funding in most situatio ns. Leasing is usually a medium -term financial
instrument used to acquire new or second -hand assets. It's born the following question: Why a
company would choose equipment leasing for business expansion and performance enhancement?
A company can get the equ ipment it needs for the business in the following three ways: it
can acquire the equipment with cash, borrow money (the company take loan from the bank) or to
lease the equipment. Equipment leasing offers an excellent opportunity for an enterprise to
impro ve without incurring too much initial costs.
The leasing is a better option than buying the equipment for following reasons:
– It determines tax benefits;
– It results in economing the cost of purchase a completely new asset;
– It involves lower monthly payments;
– It improves the company's workflow;
– It assures modernization with the latest technology at a reasonably cost.
To purchase a goods in leasing is concluded the leasing agreement between the lessor
(financier, owner) and lessee (u ser) which permit of the lessee to use the good for a defined period,
in exchange for monthly payment as the leasing instalment and at the finish of the leasing period,
the lessor undertakes to permit the user to choose: to buy the good, to extend the leas ing agreement
or to end the contract relationship.
The main two categories of leasing are: financial leasing and operational leasing. The
leasing classification was made on the basis of complex rules and features, and in the case of
operational leasing, the asset and the payment obligation for it are not recorded on the balance
sheet of the client.
The financial leasing contract has a purpose, generally, to acquire the asset by the user by
fulfilling the following conditions:
– The lessor transfers the us er the ownership of the asset to the end of the contract period;
– The user has the option of acquiring the asset at a lower presumed price than the market
value at the date the option can be exercised, as of the start of the lease is certain that this opt ion
will be achieved;
– The lease term applies for the economic life of the asset, even if the title of property is
not transferred;

34
– The total value of the leasing rates, excluding the additional costs, is more or equal to the
carrying amount of the asse t, represented by the value of the asset for the lessor;
– The assets in question are lessee specific and can only be used without major changes.
Under a finance lease, the user can take over the right to use the asset that is during his
lifetime and the r esponsibility for maintenance, repairs, taxes, insurance, and direct relationship
with the supplier.
An operating lease allows the lessee to use the asset for a limited amount of time, but
transfers the lessor both the risks and benefits of ownership of th e asset. The lessor takes the risk
of the residual value of the funded asset.
A dynamic and powerful leasing sector can be a real support for a country's economic
growth, as it creates access to finance for a larger scale of companies than those that meet
commercial banks' risk requirements. Thus, leasing is a significant source of financing that can
stimulate job creation, produce added value in the economy, better labor productivity, increase
intern offer and make exports performing.
The conclusions of th e theoretical chapter were structured in the form of a SWOT analysis
of the leasing market :
Strengths:
– A strong legal basis to ensure sustainable practices;
– Improving tax treatment and the process of taxing compared to traditional loans customer
processes ;
– Greater flexibility and quicker approval of customer leasing requests ;
– Provides support for new businesses and small and medium enterprises (SMEs), the
main beneficiaries of financing through leasing than traditional lending;
– Generates added value for companies that are unable to fund themselves from other
sources .
Weaknesses:
– The legislative pressure in recent years and adaptation to compliance current standards
rapid;
– The higher cost of financing;
– Low leasing awareness among clients .
Opportunities:
– European fundings for increase of financing sources;
– Competition from non -domestic leasing companies;
– Less developed market in Romania than in other CE countries and this implies the
growth potential leasing;
– Public private partnerships.
Threats:
– Competition from leasing companies outside the country;
– Bureaucracy that affects customer satisfaction;
– Difficulties in returning assets in case of non -payment.
The leasing market in Europe shows a period of steady growth in recent years. It can be
seen that countries with a strong economic capacity hold the highest shares, while countries with
a similar economy to Romania, are ranked roughly the same or below.
Leaseurope has published the results of its preliminary survey for 2017 of the European
leasing market. The preliminary data indicate for 2017 that the leasing market recorded another
year of growth, similar to the high scores observed in 2016 as follows:
– The total new business volumes increased by 9.6% compared to 20 16;
– The outstanding portfolio rising by 4.9% of the member associations reporting, where
outstanding contracts for equipment maintain stable around the level as previous year and real
estate had a contraction;
– New business volumes for vehicles increase d by 9.3% in 2017, over the past eight years,
continuing with an increasing trend;

35
– Equipment leasing increase of 12.9% compared to last year, but the real estate leasing
market decreased by 3.8%;
– In many countries, due to economic growth, to result increase the investments in 2017
and leasing equipment increased more than in previous years, exceeding the vehicle sector. This
shows that leasing is used as a form of financing in Europe;
We can conclude about the current situation in Romania, reported to the European leasing
market as follows:
– The total value of the financial leasing operations are amounting of approximately 2
billion Euro in 2016, recording a 20% increase compared to 2015, the growth being above the
average reported by the European leas ing market which is 10.30% according to Annex 01 ;
– New volumes leasing in the first nine months of 2017 increased by 14% compared to the
same period last year and 2017 was concluded to approximately 2.2 billion Euro, demonstrating
that growth is being mai ntained and in 2017;
– The leasing sector in 2017 was positively influenced by the increase in demand for new
cars, which advanced 17% in the first three quarters of the year 2017 and second -hand vehicles
grew by 70%.
– An interesting statistic comes from the type of asset used (new or second -hand assets).
Notable is the fact that the share of second -hand assets registered a significant increase in the last
year taken for analysis, but this growth continued in 2016 and 2017. The increase in second -hand
assets in the portfolio of leasing companies came as a result of financial crisis , as a consequence
of the fact that the purchasing power in Romania has diminished and customers have looked for
similar alternatives but at low costs. This can be explained by th e fact that operational leasing
transaction are increasing, implying reuse of assets: vehicles, machinery and equipment.
– The leasing for equipment has moderate growth (+ 10%) as investment in various sectors
of the economy. Within them, agricultural equ ipment are the top, with a growth of 48%, because
exist the leasing companies dedicated to the financing of this sector in the local market, at
unbeatable costs, these being in a traditional business relationship with large machinery
manufacturers from abr oad.
– The financing of agricultural equipment remains the largest segment will increase in the
next period, because the leasing purchase became eligible for the acquisition European funds in
the financial section by the National Rural Development Programme Romania 2014 -2020. The
condition is that after no more than five years, the beneficiary will become the owner of the
equipment purchased by leasing.
– The financial leasing market could increase in 2018 compared to 2017 by 10 -15%,
according to th e estimate of the Association of Financial Companies – ALB Romania, but on a
normalized market should exceed 3 billion euros. The target for 2020 would be to increase the
share of the financial leasing market to 2 % of GDP.
The evolution of the Romania lea sing market shows a period of steady growth in recent
years, being directly proportional to the genera l economic situation of Romania and t he forecasts
for the years 2017 and 2018 show that the European economy is stabilizing after the crisis and the
European leasing industry has the ro le of supporting the economy.

36

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37
Annex 1 – Leasing market in Europe

38
Annex 2 – Leasing market in Europe

39
Annex 3 – Leasing market in Europe

40
Annex 4 – Top European Leasing Companies