Business law

Finance leasing (credit-bail)

A finance lease allows a company or professional to use equipment or real estate without owning it. Ownership and use are separated, both legally and for accounting purposes: what matters is not the asset's balance-sheet value, but its cost of use compared with its return.

For more than ten years, MOSAIK has advised the players in professional finance leasing, real estate and equipment alike: lessees, suppliers and financial institutions.

How does a finance lease work?

Lease financing is a three-party transaction between the future lessee, a supplier and a lessor:

  • the lessee freely chooses its supplier and the equipment, and negotiates the price;
  • the equipment is ordered from the supplier, which delivers it to the lessee and invoices the lessor;
  • the lessor leases the equipment to the lessee, for an agreed term and rent.

Unlike an operating lease, the credit-bail (French finance lease) includes a purchase option from the outset: the lessee's right to acquire the asset at the end of the contract, for a price set in advance.

Who is it for?

Finance leasing and operating leases are available to all types of players:

  • companies of all sizes;
  • artisans and retailers;
  • independent professionals;
  • farmers;
  • public administrations and local authorities;
  • non-profit organizations.

Structuring and security

MOSAIK assists its clients in negotiating and putting the contract in place, and then throughout its performance. The firm also advises on the security that banks and financial institutions may require.

Because the financial institution holds legal title to the asset, requests for additional security are limited in principle; where required, they most often take the form of personal guarantees. Finance leases and operating leases are also eligible for the guarantee of Bpifrance, the French public investment bank, for contracts with a term of more than two years.

Finance lease litigation

Refusal to deliver, non-conforming equipment, unpaid rent, early termination, fate of the equipment at the end of the contract, interaction with the lessee's insolvency proceedings: lease financing disputes have rules of their own, stemming from the three-party structure of the transaction.

MOSAIK has recognized litigation expertise across all of these disputes, acting for lessees and lessors alike, and aligns every proceeding with the economic reality of the business.

Frequently asked questions

What is the difference between a finance lease (credit-bail) and a lease with purchase option (LOA)?

The two arrangements look alike and are often confused. The practical difference lies mainly in the termination rights available at the contract's anniversary date. The right choice depends on your need for flexibility and your equipment strategy.

Is finance leasing reserved for large companies?

No. Lease financing is available to companies of all sizes, but also to artisans and retailers, independent professionals, farmers, non-profit organizations and public authorities.

What happens if a dispute arises during the contract?

Finance lease disputes (non-conforming delivery, termination, indemnities, fate of the equipment) follow specific rules, tied to the three-party structure between lessee, supplier and lessor. MOSAIK has refined litigation expertise across all of these disputes.