
At the latest when freelancers have established themselves in their business, certain investments become due. However, vehicles, business equipment and other operating resources quickly add up to large sums that could not be financed immediately. Then the question arises: leasing or financing as a freelancer? A typical example for professional lessees is the leasing of cars for commercial and (partly or wholly) private use.
Unlike car financing, for example, the leased vehicle remains in the possession of the lessor or car manufacturer during the period of use, which offers tax advantages depending on the size of a trade. Regardless of whether a freelancer should lease or buy the company car, many other B2B companies now offer a choice of freelance leasing or financing for business equipment. Does leasing make sense for freelancers?? Let’s take a closer look.
Facts in comparison: leasing vs. Financing
Superficially, the exact difference between leasing and financing for freelancers not at first. In both cases, a freelancer pays an amount, usually monthly, and receives a good and the possibility to use it in return. This credit is reduced accordingly. Characteristic of leasing, however, is the fact that the lessee does not become the owner the leased vehicle remains the property of the lessor or car manufacturer during the period of use, which offers tax advantages depending on the size of the business. Unless otherwise agreed, a car is returned to the lessor at the end of a lease agreement. The ownership relationship is initially the biggest difference between financing and leasing.

The consequences are obvious, but the advantages and disadvantages must be weighed carefully: compared to leasing, financing is characterized by the fact that a product such as a financed company car becomes the property of the borrower once the purchase price has been paid in full. Whether leasing is worthwhile for self-employed persons and freelancers is primarily a question of taxation, but often also a question of conscience, which no advisor can answer individually.
With a focus on vehicle leasing, which has established itself in the commercial sector from a fiscal and financial point of view, the following leasing advantages and disadvantages can be compared:
- Leasing installments are fully tax deductible as a business expense
- Leasing rates facilitate long-term calculation of operating expenses
- The leased object is not an asset that may have to be recognized in the balance sheet
- Lower capital outlay for individuals, freelancers and the self-employed
- Higher costs compared to purchase through financing
- No acquisition of ownership, thus no sale possible
- Possible follow-up costs after the end of the leasing period
The extent to which the above advantages and disadvantages affect freelance leasing also depends on the size of the business. The possibility of private use of leased products also plays an important role for freelancers, which is also relevant for income tax purposes – especially in the case of car leasing. During audits by the tax office, great care is taken to ensure that there is a clear distinction between private and professional driving. Also sales tax tricks like so called sale and lease back deals do not go unnoticed in an audit.
Important: the tax office looks closely at the use of a company car. A logbook is strongly recommended for freelancers, because a company car is often driven privately.
Car leasing and taxes – strictly separate private and business life
In principle, the type of use is relevant for all objects. However, the example of a car is the easiest way to show the effects that the type and scope of use can have. Freelancers often find it difficult to clearly distinguish between private life and business – with important consequences. If it is guaranteed that a leased vehicle will be used exclusively for business purposes, the matter is clear: all costs, taxes and other expenses related to the car will be paid by the leasing company expenses are fully deductible as business expenses (leasing costs).
More often, however, a professional and private use at the same time. The above-mentioned costs are still deductible as business expenses, but the private use has to be assessed in the context of the income tax. As an alternative to exact taxation by means of a time-consuming driver’s logbook, freelancers can use the tax private use with the help of the 1 percent rule. For example, 1% of the gross list price must be added to the actual salary and taxed each month.
Is leasing worth it for the self-employed and freelancers from a tax point of view?? The advantages and disadvantages mentioned above must be weighed up thoroughly in a comparison.
leasing only possible with a good credit rating – increase credit score and creditworthiness
While favorable leasing can reduce investment costs, similar to financing, a lessor has a legitimate interest in, a credit check for freelancers and self-employed persons carry out. Only if the credit rating is positive is it likely that the agreed leasing installments will be paid over the entire term of the lease. Especially for freelancers, a good credit rating is a challenge, because experience shows: even if the earnings and asset situation is good, the result of a credit check could be negative. There are other factors that play a role in determining the credit score of freelancers:
- How previous contracts and payments have been treated?
- Is there any history of loans and liabilities at all?
- How long has the self-employment existed according to the trade license??
- What industry is the freelancer in??
Particularly annoying for many self-employed people: if no credit and payment arrangements existed before, this may even be a negative credit rating effect. If necessary, freelancers are forced to, increase credit score and creditworthiness. The credit guide from smava gives important tips on their own creditworthiness. Opportunities to obtain a positive credit report are numerous:
- Early settlement of current liabilities
- proof of assets or property
- Checking the correctness of data deposited with scoring agencies
Often, the value of a leased object also plays a role, so that in the case of poor creditworthiness, it is first necessary to switch to an object with a lower value.

leasing an e-bike or bicycle as a freelancer is becoming more and more popular
Low-cost leasing has become the norm in many areas
For a long time, business leasing was typical for freelancers and self-employed persons, especially for vehicles. In the commercial sector, however, numerous companies have long offered the possibility of leasing business assets as freelancers. The following products, for example, are already being leased by the self-employed under almost the same conditions as vehicles:
- E-bikes (bike leasing for employees is becoming more and more relevant as an employer benefit, especially in metropolitan areas)
- Typical office and business equipment such as high-quality designed and functional furniture
- IT infrastructure such as computers, notebooks, monitors, printers and copiers
- Machinery and production equipment
Depending on the leasing contract, freelancers and self-employed persons have to weigh up the advantages and disadvantages even more specifically, since favorable leasing is now also possible for goods that wear out much less quickly than a company vehicle. Best example: office equipment such as desks, printers, monitors and computers. Important to know: here lies the Useful life usually longer than assumed under tax law becomes. Long-term leasing for freelancers can quickly become a cost trap that cannot be ignored in this case.