Financial leasing means that the lessor signs a supply contract with a third party (supplier) at the request of the lessee (user), and the supplier finances the purchase of the equipment selected by the lessee.
After the expiration of the term of the financial lease, the rent is paid, the lessee performs all the obligations in accordance with the agreement of the financial lease contract, and if there is no agreement on the ownership of the leased goods or the agreement is unclear, it can be supplemented by an agreement; if a supplemental agreement can not be reached, it will be determined in accordance with the relevant provisions of the contract or the trading habits, but if it still can not be determined, the ownership of the leased goods belongs to the lessor.
Because of the characteristics of the combination of financing and financing, the leasing company can recover and deal with the lease in case of problems, so there is no high requirement for corporate credit and guarantee when dealing with financing, which is very suitable for SMEs' financing.
Expanded Information: A lease is a finance lease if it meets one of the following conditions: (i) at the end of the lease term, ownership of the leased asset is transferred to the lessee; (ii) the lease term is for a majority of the asset's useful life (75% or more); (iii) the minimum lease payments during the lease term are greater than or substantially equal to the fair value of the asset on the lease commencement date. Baidu Encyclopedia-Financial Leasing Baidu Encyclopedia-Financial Leasing Business