Why the country to vigorously develop the financial leasing business

The reasons are as follows:

1, at present, many of China's small and medium-sized enterprises are backward in terms of equipment and low level of technology, and in the face of increasingly fierce competition in the market, it is particularly important to carry out equipment updating and remodeling, which requires large sums of money.

2, due to the small size of small and medium-sized enterprises, low credit rating, earnings are not stable enough, entirely through bank loans or domestic and foreign listing, it is difficult to meet the needs of these small and medium-sized enterprises for funds.

3. In this case, financial leasing, which is simple and quick, has low credit requirements and does not require additional guarantees or mortgages, is a very good way.

Financial leasing

It is a kind of lease that transfers all the risks and rewards associated with the ownership of an asset in substance. Financial lease (Financial lease) refers to the lessor financing funds for the lessee to provide the required equipment, with financing, financing dual function of the transaction, involving the lessor, the lessee, the supplier of the three parties, including leasing contracts, supply contracts and other two or more contracts. The lessor according to the lessee's requirements and choices, and the supplier to enter into a supply contract to pay the purchase price, and the lessee to enter into a lease contract, the equipment purchased will be leased to the lessee to use, most of the lease period is equivalent to the life of the equipment.

Lease period, the lessee according to the contract to the lessor to deliver rent in installments. The ownership of the leased equipment belongs to the lessor, the lessee enjoys the right to use the equipment during the lease period. At the end of the lease period, the equipment can be purchased by the lessee, renewed or returned to the lessor.

In the construction machinery industry, the financial leasing business was also introduced into China in recent years, is the lessor according to the lessee's choice of supplier and leasing object, the lessor to the supplier to buy the leasing object, and then leased to the lessee to use a sales method.

Conditions for Judgment

A lease that meets one of the following conditions is a finance lease:

(i) the ownership of the leased asset is transferred to the lessee at the end of the lease term;

(ii) the lease term is for a majority of the asset's useful life (75% or more);

(iii) the lease term is for a majority of the asset's useful life;

(iii) the minimum payment for the lease is greater than or substantially greater than the base payment. The minimum lease payments during the lease are greater than or substantially equal to the fair value of the asset on the lease commencement date.