Since the early years of leasing, the pay-as-you-earn element has been part of the DNA of the leasing business. This advantage in the contractual design of leasing is of interest to companies of all sizes - whether small businesses or large companies. The leasing instalments depend on the income generated by the investment object. This preserves your own liquidity and credit line and gives you room for manoeuvre for other investments.
What is the pay-as-you-earn principle?
Leasing according to the pay-as-you-earn principle - also abbreviated PAYE - makes the advantages of classic finance leasing clear: investment in equipment, for example in a machine, agricultural and forestry technology or a special solution in medical technology, is possible without the use of equity capital thanks to pay-as-you-earn leasing. The company as lessee pays for the leased object only from the start of use. This means that it does not have to provide advance financing for the object, but the costs - the leasing instalments - are generated directly from the income from the leased object. This means that the company's own credit line with their bank remains untouched and liquidity is protected.
In the case of software leasing, the significance of pay-as-you-earn becomes even clearer: the costs are spread over the entire useful life. This applies to the pre-financing of essential components such as programming or adaptation by external parties, as well as to internal services. The first leasing instalment is only due when use begins. This eliminates the double burden during the transition phase. Constant leasing instalments guarantee a secure basis for cost calculation.