Leasing by small enterprises

Abstract

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Leasing Decisions and Credit Constraints: Empirical Analysis on a Sample of Italian Firms

“…Lasfer and Levis () find that, while large companies lease mainly for tax savings, small companies lease to overcome their inability to access debt to finance growth and/or survival. This is consistent with the Neuberger and Räthke‐Döppner () finding that small and young German firms use leasing to increase their funding capacity.…”

“…Lease financing provides an important source of funds, enabling many companies to invest in property, plant, and equipment . However, relatively few theoretically driven empirical studies examine the determinants of leasing decision for non‐US/UK firms (Deloof and Verschueren, and Deloof et al ., examine Belgium, while Neuberger and Räthke‐Döppner, focus on Germany).…”

“…In contrast to the literature relating leasing to proxies of firm financial difficulties (Eisfeldt and Rampini, for US firms; Lasfer and Levis, for small UK companies; Neuberger and Räthke‐Döppner, for small German firms) we adopt a more comprehensive strategy to test the repossession advantage of leasing.…”

Car Leasing in Lebanon from the Perspective of the Lessor

“…Moreover they will obtain the opportunity to have state of the art cars without buying the car, something that Mannering et al (2002) call life cycle upgrading to a higher-quality vehicle. Leasing can relax the borrowing constraints of the lessee, whether it is another firm (Cosci et al, 2015), a smaller or growing firm (Lasfer & Levis, 1998;Neuberger & Räthke-Döppner, 2013;Dogan, 2016) or another individual. Incidentally the notion that leasing increases debt capacity, while generally espoused by practitioners, has been considered in the textbooks of corporate finance as a fallacy (Copeland & Weston, 1992;Copeland et al, 2005;Ross et al, 2010;Brealey et al, 2014).…”

“…This will enable car leasing firms to engage in another and different endeavor, like that of medium term leasing. Effectively the mean duration of the lease is 3.6 years in Germany (Räthke-Döppner, 2013). The choice of a term of three years is dictated by local authorities who require that the leased car be at most three years old, and that the operating lease is for a maximum of three years.…”