Easily apply digitally
You can easily apply for your investment credit in KBC Touch, KBC Mobile or KBC Business Dashboard.
No down payment required
You spread your VAT payments.
Higher borrowing capacity
Since additional collateral is not usually required, you can maintain your collateral capacity for other types of business loan.
New and existing businesses often need all sorts of gear. You might have to buy laptops for all your staff, for instance, or invest in new machinery.
That’s not always easy if you have to come up with the cash to pay for it all yourself. Or maybe you’re planning to use your money for other investments?
KBC offers three different options to help you finance the equipment your business needs.
One way to finance your equipment is a traditional investment credit. In this case, you become the owner of the equipment you buy – KBC simply helps you finance it.
You can also opt for leasing. In this case, you are the lessee and you include the purchased equipment on your balance sheet and depreciate it. In this case, you also have the right of use, while KBC remains the owner of the goods.
We take a detailed look on this page at the third option, renting. If you choose this approach, you as a business pay a regular fee to KBC (similar to hiring) for use of the equipment.
What is renting?
We don’t get involved with which laptop or office furniture you want: you yourself decide what to buy and where. You also choose the provider of any insurance cover you want.
KBC becomes the owner of the goods, while you pay a regular fee for using them. You’re responsible, meanwhile, for any additional costs for repairs or insurance.
One of the benefits of renting is that there’s no down payment. KBC pays the full amount of the investment to the supplier, including the VAT. You then spread your VAT payments via the monthly rental invoices.
The minimum investment amount is 9.000 euros (ex VAT).
How does renting work from the accounting point of view?
If you opt for renting, you have to process your monthly rental invoices in your accounts. This is done simply by entering them as operating expenses in the income statement, provided this is approved by your bookkeeper or auditor. If you buy IT equipment, for instance, it is not included in your balance sheet.
You also increase your lending capacity.
And you needn’t worry about additional collateral, which is not generally requested. This means you can keep your collateral capacity for other commercial loans.
More scope therefore remains for funding your operating capital and other possible investments.
How is the price of renting calculated?
The monthly rental fee you have to pay to KBC lasts for a maximum of five years, although this can be longer in the case of certain commercial equipment.
It’s useful to know that you can take advantage of a higher first invoice of up to 30%. This can be more tax-efficient if you are a liberal professional or self-employed and want to maximise your expenses, but it is certainly not compulsory. The higher initial invoice at the beginning of your contract – and the high residual value at the end – can, however, sharply reduce your regular repayments.
You purchase a fork-lift truck with a value of 10,000 euros and then opt for a higher first invoice of 30% and a residual value of 16%. In this way, you are only spreading 5,400 euros, not including interest, over the selected term.
What is the residual value at the end of your contract?
When your contract ends, you have the option of taking ownership of the purchased goods. How much you pay depends on the residual value agreed at the beginning. The standard figure at KBC is 16%.
In the contract, you commit to either a residual value guarantee or a repurchase agreement.
A residual value guarantee works like this: if you decide not to purchase the goods at the end of your contract and KBC is unable to sell them on at the agreed residual value, you pay the agreed residual value guarantee.
In the case of a repurchase commitment, a third party undertakes to purchase the good at an agreed price.
What’s the difference between leasing and renting?
It’s not always easy to spot the differences between renting and leasing. They exist nonetheless.
There is a difference, for instance, in the accounting treatment.
In the case of renting, the goods are recorded as an expense and appear in the income statement, provided this is approved by your bookkeeper or auditor. Businesspeople often take advantage, moreover, of the possibility of a higher first invoice of up to 30%.
If you opt for leasing, you work via the balance sheet, using capitalisation and depreciation.
Whichever method you choose, you always have a purchase option at the end of your contract. There is a difference, however, in the residual value specified there.
The standard figures at KBC are 16% for renting and 4% for leasing.
What happens at the end of your contract if you don’t want to assume full ownership of the business equipment and KBC is unable to sell it on at the agreed residual value? In that case, you pay the agreed residual value guarantee. Unless, that is, you agree a repurchase commitment in your contract. In that case, a third party undertakes to purchase the goods at an agreed price.
What’s the difference between an investment credit and renting?
When you opt for a traditional investment credit, you become the owner of the business equipment you purchase – KBC merely helps you finance it.
If you opt for renting, you have to pay a regular fee in order to use the equipment.
Investment credit, leasing or renting: which is best for you?
It’s not possible to give a fixed answer to this question. A lot depends on your personal preferences and your financial situation.
We take a closer look in these pages at the details of investment credits, leasing and renting.
You will learn more, for instance, about the accounting treatment, who owns the goods and the terms of the purchase option. It will make it a lot easier for your to make the right choice.
How do I apply for financial renting?
- Choose the business equipment you want to purchase and ask for a quotation from the supplier.
- Get your credit yourself online.
- Application approved and contacts signed online? We will confirm the order with the supplier.
- You can pick your equipment up as soon as the supplier tells you it’s ready. We do the rest.
- Pay the regular invoices to KBC.
A quick summary of the benefits of renting
- You yourself decide what type of goods to buy and where, and what insurance cover to take out for them.
- You’ll know within 24 hours of your application whether it has been approved.
- There’s no down payment. KBC pays the full capital cost and VAT for the goods to the supplier.
- You increase your lending capacity. No additional collateral is generally required. This means you retain your collateral capacity for other commercial loans and increase the scope for financing your operating capital and other possible investments.
- You repay the VAT over a longer period and KBC takes care of the prefinancing.
- You enter your business equipment as an expense in the income statement, provided you have received due approval from your accountant or auditor.
- You can opt for a higher first invoice of up to 30%.