Advantages and disadvantages of financial leasing

I. Advantages of financial leasing Financial leasing has the following advantages: 1. The threshold of financial leasing is low. 2. Financial leasing can extend the financing period and increase the cash flow of small and medium-sized enterprises. 3. Financial leasing can improve the financial situation and financing ability of small and medium-sized enterprises. 4. Financial leasing is conducive to the utilization of foreign capital by SMEs and the introduction of foreign advanced technology. 5. Compared with bank loans, financial leasing is a financing method that can be changed according to the actual requirements of customers, so the financing method is more flexible. Secondly, from the lessor's point of view 1. Leasing promotion to expand product sales and market share; it is important to sell SMEs. Only successful sales can realize profits. More and more companies want to expand the lease, rather than selling directly to achieve sales. The advantage of doing so is to greatly reduce the purchase threshold, expanding the purchasing power of customers. 2. To ensure timely recovery of funds, it will be prepared together with the capital budget to simplify the financial accounting procedures; clear cash flow during the lease period is conducive to funding arrangements. 3. Simplify product sales and accelerate the capital turnover of production enterprises. 4. Pay more attention to the future earnings of the project. The characteristics of "financing" determines the use of leasing funds is clear, the lessee can not divert the money for other purposes, the lessor is more focused on the examination of the future cash flow of the project, so that some of the debt ratio is high, but the project is a good leasing enterprise can also obtain equipment financing. 5. Reduce the risk of direct investment.