Financial leasing, also known as financial leasing or financial leasing, refers to the lessor according to the lessee's choice of supplier and the subject matter of the lease, the lessor to the supplier to purchase the subject matter of the lease, and then leased to the lessee to use.
Financial leasing refers to the financial leasing business carried out by units approved by the China Banking Regulatory Commission (CBRC) to operate financial leasing business and foreign-invested enterprises and foreign enterprises approved by the competent department of foreign trade and economic cooperation to operate financial leasing business.
Specific content
It refers to the specific content of the lessor according to the lessee's specific requirements for the leased object and the selection of the supplier, the capital to the supplier to buy the leased object, and leased to the lessee to use the lessee, the lessee pays the rent to the lessor by installments, in the period of the lease belongs to the ownership of leased objects to the lessor, the lessee has the right to use the leased object. After the lease expires, the rent is paid and the lessee performs all the obligations according to the provisions of the financial leasing contract, if there is no agreement on the ownership of the leased object or if the agreement is not clear, it can be supplemented by agreement; if no supplemental agreement can be reached, it shall be determined in accordance with the relevant provisions of the contract or the trading habits, and if it is not determined, the ownership of the leased object shall be vested in the lessor. Financial leasing is a new type of financial industry integrating financing and financing, trade and technology renewal. Due to the combination of financing and financing, the leasing company can recover and deal with the leased objects when problems arise, thus it is very suitable for SMEs' financing because it does not require high creditworthiness and guarantee for the enterprise when dealing with financing. In addition, financial leasing belongs to on-balance sheet financing, which is reflected in the liability items of the enterprise's financial statements and affects the enterprise's creditworthiness. This is very favorable to SMEs that need multiple channels of financing.
Specific characteristics
The characteristics of financial leasing are generally summarized in five aspects.
One, the lease is decided by the lessee, the lessor funds the purchase and lease to the lessee, and can only be leased to an enterprise during the lease period.
Two, the lessee is responsible for the inspection and acceptance of the leased goods provided by the manufacturer, the quality and technical conditions of the leased goods the lessor does not guarantee to the lessee.
Three, the lessor retains ownership of the leased property, the lessee pays rent during the lease and enjoys the right to use, and is responsible for the management, repair and maintenance of the leased property during the lease.
Four, once the lease contract is signed, during the lease, no party has the right to unilaterally withdraw from the contract. Only if the leased property is destroyed or proved to have lost the use of the contract can be suspended, without reason to break the contract will have to pay a heavy penalty.
Fifth, at the end of the lease term, the lessee generally have two options for the leasehold purchase and surrender, if you want to keep the purchase, the purchase price can be negotiated by the two parties to the lease.
Risk Overview
The risk of financial leasing comes from many uncertainties, is multifaceted and interrelated, in the business activities to fully understand the characteristics of the various risks, in order to comprehensively and scientifically analyze the risk, and formulate the appropriate countermeasures. The risk types of financial leasing are mainly the following:
Product market risk
In the market environment, whether it is financial leasing, loans or investment, as long as the funds are used for additional equipment or technological transformation, first of all, we should consider the market risk of the products produced by the leased equipment, which need to understand the sales of the product, the market share and ability to occupy the market, the market development trend, consumer structure and the consumer's mindset. development trend, consumption structure, and consumer mentality and consumption ability. If these factors are not adequately understood, the investigation is not detailed, it is possible to increase the market risk.
Financial risk
Because of the financial attributes of financial leasing, the risk of financial aspects throughout the entire business activities. For the lessor, the biggest risk is the lessee's ability to pay back the lease, which directly affects the operation and survival of the leasing company, therefore, the risk of paying back the lease from the beginning of the project should be highly concerned.
Currency payments can also be risky, especially international payments, the payment method, payment date, time, remittance channels and payment means of improper choice, will increase the risk.
Trade risk
Because financial leasing has the attribute of trade, the risk in trade exists from the ordering negotiation to the trial acceptance. Due to the commodity trade in recent times the development of a more complete, the community has correspondingly established supporting institutions and preventive measures, such as letters of credit payment, transportation insurance, commodity inspection, commercial arbitration and credit counseling have taken preventive and remedial measures against risk, but due to the different degree of awareness and understanding of risk, some means and commercial nature, coupled with the lack of experience in business management and other factors, these means have not been all adopted, making trade risks still exist.
Technology risk
One of the benefits of financial leasing is the introduction of advanced technology and equipment before other enterprises. In the actual operation process, factors such as whether the technology is advanced or not, whether the advanced technology is mature or not, and whether the mature technology infringes on the rights and interests of others legally are all important reasons for generating technical risks. In serious cases, the equipment can be paralyzed by technical problems. Others include economic environment risk, force majeure and so on.