Financial leasing is a new form of financial service that combines physical credit and bank credit generated under modern large-scale production conditions. It is a cross-field and cross-department industry integrating finance, trade, and services. Vigorously promoting the development of financial leasing will help transform the economic development model and promote the integrated development of the secondary and tertiary industries. It will play an important role in accelerating commodity circulation, expanding domestic demand, promoting technological updates, easing the financing difficulties of small and medium-sized enterprises, and improving the efficiency of resource allocation. Actively developing the financial leasing industry is an inevitable choice for the development of my country's modern economy. In the next five years, the role and status of financial leasing in my country's economic development will become increasingly important, and the financial leasing industry will play an increasingly important role in the Chinese economy. With the continuous development of China's economy and relying on the increasingly powerful Chinese real economy, the financial leasing industry will surely become the mainstream format in my country's service industry in the future. With the continuous improvement of operating levels and capabilities, a number of leasing companies will stand out and become among the first-class enterprises in China and even the world. Differences from Traditional Leasing An essential difference between financial leasing and traditional leasing is that traditional leasing calculates rent based on the time the lessee leases and uses the object, while financial leasing calculates rent based on the time the lessee occupies the financing costs. It is a highly adaptable financing method that emerged when the market economy developed to a certain stage. It is a new transaction method that emerged in the United States in the 1950s. Because it adapted to the requirements of modern economic development, it was introduced in the 1960s. ~ It developed rapidly around the world in the 1970s and has become one of the main financing methods for enterprises to update equipment, and is known as a "sunrise industry". After my country introduced this business method in the early 1980s, it has developed rapidly over the past two decades. However, compared with developed countries, the advantages of leasing are far from being fully realized, and the market potential is huge. Differences from installment payment (1) Installment payment is a purchase and sale transaction in which the buyer not only obtains the right to use the traded item, but also obtains the ownership of the item. Financial leasing is a kind of leasing behavior. Although the lessee actually bears the costs and risks caused by the leased object, legally speaking, the ownership of the leased object still belongs to the lessor in name. (2) The accounting treatments of financial leases and installment payments are also different. In a financial lease, the ownership of the leased property belongs to the lessor, and the leased property is regarded as a long-term receivable; the lessee includes it as a fixed asset and makes depreciation provisions. Items purchased on an installment basis are owned by the buyer and are therefore included on the buyer's balance sheet and are responsible for depreciation. (3) The above two items lead to differences in tax treatment between the two. In a finance lease, the lessor can deduct the amortized depreciation from the accrued income, while the lessee can deduct the amortized depreciation from the taxable income. In an installment transaction, the buyer can deduct the amortized depreciation from the accrued income. Depreciation is deducted from taxable income, and buyers can also deduct interest costs from taxable income. In addition, the purchase of certain fixed assets can also enjoy investment tax exemptions in some Western countries. (4) In terms of term, the payment term of installment payment is often lower than the economic life of the transaction item, while the lease term of finance lease is often equivalent to the economic life of the leased item. Therefore, the credit period obtained through financial leasing for the same item is longer than that obtained through installment payment. (5) Installment payment is not a full credit, and the buyer usually has to pay part of the loan on time; while financial leasing is a full credit, which provides the entire lease price and even additional costs such as transportation, insurance, and installation. Financing. Although financial leasing usually requires a certain deposit to be paid at the beginning of the lease, this fee is generally much less than the immediate payment required for installment transactions (for example, in import and export trade, the buyer needs to pay at least 15% in cash. loan). Therefore, for the same item, the total amount of credit provided by financial leasing is generally larger than that provided by installment transactions. (6) There are also differences in payment time between financial lease and installment transactions. The latter is usually at the end of each period, and there is usually a grace period before installment payment. Finance leases generally do not have a grace period, and rent needs to be paid after the lease begins. Therefore, rent payment is usually at the beginning of each period. (7) When the financial lease expires, the leased object usually has a residual value. The lessee generally cannot dispose of the leased object at will and needs to go through procedures such as exchange or purchase. The buyer of an installment transaction owns the traded item after the specified installment payment and can do whatever he wants with it.
(8) The objects of financial leasing are generally items with longer lifespan and higher value, such as machinery and equipment.
Development History Editor Origin
Modern financial leasing emerged in the United States after World War II. After World War II, there was a surplus of industrial production in the United States. In order to promote the equipment they produced, manufacturers began to provide financial services to users, that is, selling their equipment through installment payment, consignment, credit, etc. Since ownership and use rights are transferred at the same time, the risk of capital recovery is relatively high. So some people began to borrow the traditional leasing method, retaining the ownership of the sold object with the seller, and the buyer only enjoyed the right to use it. It was not until all the funds raised by the lessor were recovered in the form of rent that the ownership was transferred to the seller at a symbolic price. Buyer. This method is called "financial leasing." In 1952, the United States established the world's first financial leasing company, American Leasing Company (now renamed American International Leasing Company), pioneering modern leasing.
China Development
The enthusiastic gathering of the number of enterprises and registered capital has made the financial leasing industry become the most watched industry in 2012 for "making big money by covering one's head". Financial leasing will become The new bright spot of future financial development has a large space for development, because whether it is from the perspective of the proportion of financial leasing in GDP or the penetration rate, there is a large gap between my country and the international community at this stage, and there is large room for improvement in the future. The proportion of financial leasing in various countries' GDP continues to fluctuate. Overall, developed countries have a higher proportion. The proportion of the BRIC countries fluctuates around 1%, but China's proportion has always been below 1%. Future development The potential is higher.
Development status
With the expansion of the scale of the financial leasing industry, competition among various financial leasing companies is becoming increasingly fierce. Excellent domestic financial leasing companies are paying more and more attention to the research of the industry market. , especially an in-depth study of the corporate development environment and changes in customer demand trends. Because of this, a large number of outstanding domestic financial leasing companies have risen rapidly and gradually become leaders in the financial leasing industry! Financial institution leasing companies have become the dominant leasing organization system in many countries. However [2]
It is clearly stated that “in countries where separate leasing companies operate most of the business, the penetration rate of leasing (leasing) is lower compared to countries where leasing services are provided by banks or universal financial institutions (a higher proportion of investment financing). The reason is that the latter have greater exposure to relevant skills and pay more attention to the market. However, in some markets, compared with those who have access to low-cost deposits. As banks of funds, leasing companies may be at a disadvantage, especially if banks start to compete before the market penetration rate of professional leasing companies reaches 5%-10%. This is especially true for leasing companies, which are one of the extremely limited bank competitors. Its competition with banks is beneficial to the development of the leasing industry, but this benefit disappears when leasing companies are controlled by banks. "Under China's current management system, financial leasing companies serve as institutions for the acquisition, investment and management of leased assets. , which can be a financial institution or a non-financial institution. The financial leasing business itself does have two market functions: financing services and trading services. It is obviously not appropriate to use the market functions of financial leasing business to define whether a financial leasing company is a financial institution engaged in financing services or a non-financial trading institution engaged in promoting the circulation and sales of leasing logistics. The debt investment business engaged in by a financial leasing company is a financing service to the lessee and has the nature of financial services. However, institutions that provide financial services are not necessarily financial institutions. Whether a financial leasing company itself is a financial institution is entirely determined by the company’s shareholder background and the business scope obtained by the company in accordance with relevant regulations on market access standards.
If its shareholder background is a financial institution such as a bank, insurance, trust, securities, etc. and reaches a certain shareholding ratio, or the company is established in accordance with the relevant market access regulations promulgated by the financial authorities, in addition to engaging in In addition to financial leasing business, it can also engage in other financial businesses such as deposit taking, loans, inter-bank lending, etc. Then this financial leasing company is a leasing asset investment and management institution in the nature of a financial institution.
If its shareholder background is a financial leasing company established by a manufacturer, general industrial and commercial enterprise, or non-financial investment institution that specializes in financial leasing business, the business scope of the enterprise will not be involved in other financial businesses such as deposit taking. Then this financial leasing company obviously should not be defined as a financial institution.
On September 7, 2015, the General Office of the State Council issued the "Guiding Opinions on Accelerating the Development of the Financial Leasing Industry", making comprehensive and systematic arrangements to accelerate the development of the financial leasing industry. The "Opinions" proposes to adhere to the basic principles of combining market leadership with government support, development with regulation, financing with property financing, and domestic with foreign countries, and proposes that by 2020, the market size and competitiveness of the financial leasing industry will rank among The world's leading development goals. The "Guiding Opinions on Accelerating the Development of the Financial Leasing Industry" points out the direction for better utilizing financial leasing to serve the development of the real economy and promote economic transformation and upgrading. The "Opinions" pointed out that by 2020, the coverage of the financial leasing business field will continue to expand, the penetration rate of the financial leasing market will increase significantly, and it will become an important means for enterprise equipment investment and technology updating. The "Opinions" clarify that we should build a legalized business environment, study and introduce special legislation for the financial leasing industry; improve fiscal and taxation policies, increase government procurement support, and encourage local governments to explore policy tools such as risk compensation, incentives, and interest discounts to guide financial leasing companies Increase financing support for small, medium and micro enterprises; expand financing channels, actively encourage financial leasing companies to raise funds through the bond market, and support qualified financial leasing companies to raise funds through the issuance of stocks and asset securitization. [3]
The "China Financial Leasing Industry Development Report for the First Three Quarters of 2015" shows that my country's financial leasing industry has grown rapidly. As of the end of September this year, the balance of financial leasing contracts nationwide was approximately 3.98 trillion yuan, an increase from The 3.2 trillion yuan at the end of the year increased by 780 billion yuan, an increase of 24.4%. In the first three quarters of this year, the number of enterprises, registered capital and total business volume in my country's financial leasing industry have increased significantly. As of the end of September, the total number of financial leasing companies in the country was approximately 3,742, an increase of 1,540 from 2,202 at the end of last year; the registered capital of the industry is calculated in RMB, which is approximately 1,216.7 billion yuan. It is predicted that my country's financial leasing industry is expected to continue to maintain rapid growth in 2015 and throughout the "Thirteenth Five-Year Plan" period. It is expected that by the first quarter of 2016, the total financial leasing business volume nationwide will reach or exceed 5 trillion yuan.