What Are The Main Business Models Of Financial Leasing Companies?

Financial leasing is a new industry in China. It is the innovation of equipment financing mode, equipment sales mode and investment mode. It not only realizes a new balance between power and responsibility among the trading entities, provides new financing methods for customers, but also becomes the mechanism of complementary advantages, resource allocation mechanism and balanced financial management tools for trading entities.

Direct financial leasing means that the lessee chooses the rental items that need to be purchased, and the lessor rents the leased items to the lessee through the risk assessment of the leasing project. During the entire lease period, the lessee has no title but has the right to use, and is responsible for the maintenance and maintenance of rental items.

It is applicable to purchase of fixed assets and large equipment, technological transformation and upgrading of equipment.

Direct financing lease operation process:

(1) the lessee chooses suppliers and rental items;

(2) the lessee shall apply for financial leasing business to the finance leasing company.

(3) financial leasing companies and lessees and suppliers shall engage in technical and business negotiations.

(4) the finance leasing company and the lessee sign the financial leasing contract.

(5) the finance leasing company signs a sales contract with the supplier to purchase the lease item;

(6) the finance leasing company pays the capital raised by the capital market as the loan to the supplier.

(7) the supplier delivers the leasehold to the lessee;

(8) the lessee pays the rent on time.

(9) when the lease expires and the lessee normally performs the contract, the finance leasing company transfers the ownership of the leased property to the lessee.

A commissioned lease is a person who has capital or equipment to entrust a non bank financial institution to engage in financial leasing. The first lessor is also a client, and the second lessor is the trustee at the same time. The lessor accepts the principal's capital or leasing the subject matter, and carries out the financial leasing business to the lessee appointed by the principal according to the written consignment of the client. During the lease term, the ownership of the leased object belongs to the trustee, and the lessor only charges the fee and does not take risks. One of the characteristics of such commissioned leasing is that enterprises without leasing management rights can operate through "borrowing right".

After sale leaseback is the leasing mode that the lessee sells the assets of the owner or purchased to the lessor and then rents and uses them to the lessor. During the lease term, the ownership of the leased assets is transferred. Lessee Only have the right to use the leased assets. The two parties may agree that the tenant shall continue to lease or repurchase the lease assets at the agreed price when the lease expires. This way is conducive to the lessee to revitalize the existing assets, can quickly raise the funds needed for enterprise development, and comply with market demand.

It is applicable to enterprises with insufficient liquidity; enterprises with new investment projects with insufficient funds; and enterprises with fast revaluation assets.

Operation procedure of after sales leaseback:

(1) the owner of the original equipment will sell the equipment to the finance leasing company.

(2) the finance leasing company pays the money to the owner of the original equipment.

(3) the owner of the original equipment rents and sells equipment to the finance leasing company as a lessee.

(4) the lessee, the owner of the original equipment, pays the rent to the lessor (finance leasing company) on a regular basis.

　　 Leveraged lease It is similar to syndicated loan, and it has a tax advantage for a large leasing project. finance lease It is mainly led by a leasing company as the backbone company to finance a super large leasing project.

First, we set up an operation institution detached from the main body of the leasing company, which is a fund management company specially designed for this project, which provides more than 20% of the total amount of the project. The rest of the source of funds is mainly absorbing the idle funds of the banks and the society, and making use of the advantages of 100% enjoying the low tax, "two Bo eight", so as to obtain huge funds for the leasing project. Other practices are basically the same as financing leases, but the complexity of contracts increases with the wide range involved.

Because it can enjoy tax benefits, operation standards, comprehensive benefits, rent recovery safety and low cost, it is generally used for financing leasing of aircraft, ships, communication equipment and large scale complete sets of equipment.

Structured shared lease means that the lessor buys the leasehold goods from the supplier according to the lessee's choice and designation of the supplier and the leasehold, providing it to the lessee and paying the rent by the lessee. The rent is calculated and agreed on the basis of the cash flow generated after the commissioning of the leased product itself. It is a rental method shared by the lessor and the lessee. The rent split includes acquisition costs, related costs (such as cost of capital), and part of the expected level of income shared by the lessor.

It is usually applied to communications, ports, electric power, urban infrastructure projects, ocean going ships and other contracts with large contracts, long duration and good revenue expectations.