What does financial lease mean

Financial leasing means that the lessor purchases the leased object from the supplier and leases it to the lessee for use according to the specific requirements of the lessee for the leased object and the choice of the supplier, and the lessee pays rent to the lessor in installments, and the ownership of the leased object belongs to the lessor during the lease period, and the lessee has the right to use the leased object.

Financial leasing is a cross-field and cross-departmental industry integrating finance, service and service. Vigorously promoting the development of financial leasing is conducive to transforming the mode of economic development and promoting.

Integrated development of secondary and tertiary industries.

It plays an important role in speeding up commodity circulation, expanding domestic demand, promoting technological upgrading, alleviating enterprise financing difficulties, and improving the efficiency of resource allocation. Actively developing the financial leasing industry is an inevitable choice for the development of China's modern economy.

In the next five years, the role and status of financial leasing in China's economic development will become more and more important, and the weight of financial leasing industry in China's economy will become more and more significant. With the continuous development of China's economy and relying on the increasingly powerful Chinese real economy, the financial leasing industry will become the mainstream format of China's service industry in the future.

Financial lease is currently the most common and basic form of non-bank finance in the world. It refers to the conclusion of a supply contract between the lessor and a third party (supplier) at the request of the lessee (user), according to which the lessor purchases the equipment selected by the lessee from the supplier at its expense. At the same time, the lessor enters into a lease contract with the lessee to lease the equipment to the lessee and collects a certain rent from the lessee.

Lease refers to the act of the lessor transferring the right to use the asset to the lessee to obtain rent within the agreed period. The main reasons for the existence of leasing are the following: tax savings; reduce transaction costs; Reduce uncertainty.

Financial leasing, also known as equipment leasing or modern leasing, refers to a lease that substantially transfers all or most of the risks and rewards associated with the ownership of an asset. The ownership of an asset can eventually be transferred or not.

Its specific content refers to the lessor's contribution to purchase the leased object from the supplier and lease it to the lessee for use according to the lessee's specific requirements for the leased object and the supplier's choice, and the lessee pays rent to the lessor in installments, and the ownership of the leased object belongs to the lessor during the lease period, and the lessee has the right to use the leased object. After the expiration of the lease term, the rent is paid and the lessee fulfills all its obligations in accordance with the provisions of the financial lease contract, the ownership of the leased property is transferred to the lessee. Although the lessor also has the identity of the purchaser of the equipment in the financial lease transaction, the substantive content of the purchase of the equipment, such as the selection of the supplier, the specific requirements for the equipment, and the negotiation of the terms of the purchase contract, are all enjoyed and exercised by the lessee, and the lessee is the actual purchaser of the leased property.

Financial leasing is a new type of financial industry integrating financing and financing, technology and technology upgrading. Due to the characteristics of the combination of financing and financing, the leasing company can handle the leased property when there is a problem, so the requirements for corporate credit and guarantee are not high when handling financing, so it is very suitable for small and medium-sized enterprise financing. In addition, financial leasing is on-balance sheet financing (balance sheet), which is not reflected in the liability items in the financial statements of the enterprise, and does not affect the credit status of the enterprise.

This is very beneficial for SMEs that need multi-channel financing.

Financial leasing means that the lessor purchases the leased object from the supplier and leases it to the lessee for use according to the specific requirements of the lessee for the leased object and the choice of the supplier, and the lessee pays rent to the lessor in installments, and the ownership of the leased object belongs to the lessor during the lease period, and the lessee has the right to use the leased object. After the expiration of the lease term, the rent is paid and the lessee performs all its obligations in accordance with the provisions of the financial lease contract, if there is no agreement on the ownership of the leased property or the agreement is unclear, it may be supplemented by agreement; If a supplementary agreement cannot be reached, it shall be determined in accordance with the relevant terms of the contract or transaction customs, and if it is still uncertain, the ownership of the leased object shall belong to the lessor.

The financial leasing industry belongs to the financial industry, which originated in the United States after World War II, and the first joint venture leasing company was established in China in 1981, which started late compared with foreign countries.

A financial lease is not a traditional lease, where the rent is calculated based on the time when the lessee leases the object, while the financial lease calculates the rent when the lessee occupies the financing cost.

The biggest difference between the two is that financial leasing means that the lessor purchases the leased object from the supplier and leases it to the lessee for use according to the specific requirements of the lessee for the leased object and the choice of the supplier, and the lessee pays the rent to the lessor in installments, and the ownership of the leased object belongs to the lessor during the lease period, and the lessee has the right to use the leased object. After the expiration of the lease term, the rent is paid and the lessee performs all its obligations in accordance with the provisions of the financial lease contract, if there is no agreement on the ownership of the leased property or the agreement is unclear, it may be supplemented by agreement; If a supplementary agreement cannot be reached, it shall be determined in accordance with the relevant terms of the contract or transaction customs, and if it is still uncertain, the ownership of the leased object shall belong to the lessor.

What is financial leasing?

A financial lease refers to a lease in which the company essentially transfers all the risks and rewards associated with the ownership of the asset. Its ownership may or may not eventually be transferred.

If one or more of the following standards are met, it shall be recognized as a financial lease:

1) At the expiration of the lease term, the ownership of the leased assets is transferred to the lessee.

2) The lessee has an option to purchase the leased assets, and the purchase price is expected to be substantially less than the fair value of the leased assets at the time the option is exercised, so that it is reasonably certain that the lessee will exercise such an option on the lease commencement date.

3) Even if the ownership of the property is not transferred, the lease period accounts for the majority of the useful life of the leased asset.

iv) the present value of the lessee's minimum lease payment at the lease commencement date, which is almost equal to the fair value of the leased asset at the lease commencement date; The present value of the lessor's minimum lease receipt at the lease commencement date is almost equal to the fair value of the leased asset at the lease commencement date.

5) The nature of the leased assets is special, and only the lessee can use them if they are not greatly transformed.

The rent of a financial lease is roughly equivalent to the total value of principal and interest calculated at the market interest rate based on the purchase amount of the leased property. In essence, a finance lease is equivalent to an installment purchase. In a financial leasing transaction, the lessee almost has to retain and purchase the leased property.

The ownership of the leased property is temporarily vested in the lessor until the purchase is retained. The amount of retention is generally symbolic ** (such as 100 yuan), etc., and the lessor can transfer the ownership of the leased property to the lessee through the retention purchase.

Financial leasing generally involves three parties (lessor, lessee and supplier), and is composed of at least two contracts (financial lease contract between lessor and lessee, purchase contract between lessor and supplier), which is a comprehensive transaction integrating financing and financing. The buyer of the purchase contract is the lessor, but the decision maker of the purchase is the lessee. The supplier delivers the goods to the lessee in accordance with the purchase contract.

A financial lease refers to a lease in which the present value of the minimum lease payment or the present value of the minimum lease receipt is not less than 90% of the original book value of the leased asset on the lease commencement date. (Note: This is where the essence of a finance lease and an operating lease is different).

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Financial leasing is a unique financial service, not a traditional lease, which calculates rent based on the time when the lessee leases the use of the object, while the financial lease calculates the rent based on the time when the lessee occupies the financing cost.

The biggest difference between the two is that financial leasing means that the lessor purchases the leased object from the supplier and leases it to the lessee for use according to the specific requirements of the lessee for the leased object and the choice of the supplier, and the lessee pays the rent to the lessor in installments, and the ownership of the leased object belongs to the lessor during the lease period, and the lessee has the right to use the leased object. After the expiration of the lease term, the rent is paid and the lessee performs all its obligations in accordance with the provisions of the financial lease contract, if there is no agreement on the ownership of the leased property or the agreement is unclear, it may be supplemented by agreement; If a supplementary agreement cannot be reached, it shall be determined in accordance with the relevant terms of the contract or transaction customs, and if it is still uncertain, the ownership of the leased object shall belong to the lessor.

We have nearly 10 years of experience in financial leasing in the printing and packaging industry, and the current business segmentation can do direct leasing of equipment, leaseback, etc., which can provide cash flow for large investment and equipment purchase, and can also supplement the working capital of enterprises and help enterprises complete industrial upgrading.

The same is true for the business of mainstream financial leasing companies in the market.

Summary. Hello dear, financial leasing means: it is a leasing method, that is, the leasing company provides funds to the lessee to purchase specific equipment or assets, and leases them to the lessee according to the agreement, and the lease period is generally longer, up to several years.

At the end of the lease, the lessee has the option to purchase the leased equipment or return it to the leasing company.

Hello dear, financial leasing means: is a leasing method, that is, leasing to the lessee to provide funds to the lessee, purchase specific equipment or assets, and lease it to the lessee according to the agreement, the lease period is generally longer, can be up to several years. At the end of the lease, the lessee may choose to purchase the leased equipment or return it to the leasing company.

Financial leasing is usually suitable for enterprises that need to need a large amount of capital support to purchase equipment or assets, and financial leasing is more flexible and convenient than bank loans. Because of financial leasing, the leasing company will calculate the depreciation of the selected equipment, take into account factors such as the lease price and lease period, and calculate the total rent, so as to determine the standard rent of the asset.

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In a financial lease agreement, the leasing company often has ownership of the assets, but requires the lessee to be responsible for the costs of repairs and maintenance during the lease period. In addition, the interest expense of Jinxiao financial leasing can be used as the cost of pre-tax deduction of the enterprise to reduce the tax burden of the enterprise.