What is a financial lease? What is a financial lease?

Financial lease: refers to the lessee's (user's) request to enter into a supply contract with a third party (supplier), according to which the supplier pays for the purchase of equipment selected by the lessee.

By purchasing the subject matter of financing and leasing it to small and medium-sized enterprises, the financial leasing company recovers the principal and earns a certain income by collecting rent. These objects are often the facilities and equipment urgently needed by small and medium-sized enterprises, which can create certain value for small and medium-sized enterprises and are an important material basis for the survival and development of small and medium-sized enterprises.

Small and medium-sized enterprises know that once defaulted, the financial leasing company will recover the financing subject matter, after all, the ownership of the financing subject belongs to the financial leasing company, after the recovery will cause a fatal blow to the small and medium-sized enterprises, there is no facilities and equipment for production, the enterprise will stop work or even go bankrupt.

Therefore, the subjective willingness of small and medium-sized enterprises to deal with financial leasing companies will be lower than that of first-chain finance, because their default costs are too high. It is precisely based on this that the lessee does not grasp the ownership of the financing subject matter, and the risk of the financial leasing company will be small.

Financial leasing 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 buys the equipment selected by the lessee from the supplier at the expense of the lessor.

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.

Specifics.

Financial lease means that the lessee enters into a supply contract with a third party (supplier) at the request of the lessee (user), according to which the lessor pays for the purchase of equipment selected by the lessee. 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.

Classification of financial leasing methods:

1. Simple financial leasing.

Simple financial leasing is also a direct financial lease. It means that the lessee selects the leased items to be purchased, and the lessor leases the leased items to the lessee after passing the risk assessment of the leased project. The lessee has no ownership but the right to use it throughout the lease period and is responsible for the repair and maintenance of the leased property.

The lessor is not responsible for the quality of the leased property, and the depreciation of the equipment is on the lessee's side.

2. Operating lease.

When calculating the rent on the basis of the financial lease, there is a residual value of more than 10%, and at the end of the lease term, the lessee can choose to renew the lease, surrender the lease, or retain the purchase. The lessor may or may not provide repair and maintenance of the leased property, and the lessor shall withdraw depreciation on the leased object in accounting.

3. Project financial leasing.

The lessee signs a project financial lease contract with the lessor with the property and benefits of the project as the guarantee, and the lessor has no recourse to the property and income outside the lessee's project, and the collection of rent can only be determined by the cash flow and efficiency of the project. Sellers (i.e., producers of leased goods) use their own leased companies to market their products in this way and increase their market share.

4. Leaseback financial lease.

Leaseback lease refers to a way in which the owner of the equipment first sells the equipment to the lessor according to the market, and then leases back the original equipment in the form of lease. The owner of the equipment can use most of the funds for other investments, and use the funds to make the most of them, and a small part of them to pay rent. The leaseback lease business is mainly used for used equipment.

5. Leveraged financial leasing.

Leveraged leasing is similar to syndicated loans, which is a kind of tax-advantaged financial lease that specializes in large-scale leasing projects, and is mainly led by a leasing company as the backbone company to finance a super-large leasing project. Leveraged leasing is generally used for financial leasing of aircraft, ships, communication equipment and large complete sets of equipment.

6. Entrusted leasing.

One way is that the person who owns the funds or equipment entrusts a non-bank financial institution to engage in financial leasing, and the first lessor is the principal at the same time, and the second lessor is the trustee at the same time. The second way is that the lessor entrusts the lessee or a third party to purchase the leased property, and the lessor pays the purchase price according to the contract, also known as entrusting the purchase of financial lease.

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.

Financial leasing refers to a transaction in which the lessor purchases the leased object from the seller according to the lessee's choice of the seller (supplier), provides it to the lessee for use, the lessee pays the rent, the lease expires, and the ownership of the goods belongs to the lessee.

Further information: financial leasing, also known as financial leasing. It refers to an economic activity that combines financing and financing after the lessee selects the machinery and equipment, the lessor first purchases it, and then leases it to the lessee for use, and the lessee pays the rent on time.

After the expiration of the lease term, the leased equipment can be handled in three ways: surrendering, renewing or transferring to the lessee. Financial leasing is the most influential, widely used and most successful form of modern leasing. A: Or.

Function. 1) It solves the problem of shortage of funds for the lessee and promotes the upgrading of its equipment and the development of the enterprise.

2) It provides investors with a new investment channel. Financial leases generally have a stable cash (rent) repatriation, so the risk is relatively small. The independence of the trust property is a feature of the system that ensures the safety of investors' funds.

3) It has opened up a promising business type for trust and investment companies.

General business processes.

Only the general business process of sublease is described, and the business process of other types of financial lease fund trust is similar to this. The trust legal network reminds that the general business clearance process of subleasing financial lease fund trust includes:

1) The trust company signs a purchase contract with the supplier, the trust company signs a financial lease contract with leasing company A, and the leasing company A signs a sublease contract with leasing company B;

2) The trust company issues a financial leasing fund trust plan to raise funds from investors;

3) The supplier submits the leased property to leasing company A (the first lessee);

4) Leasing company A (second lessor) subleases the leased property to leasing company B (second lessee);

5) Leasing company B pays rent to leasing company A;

6) Leasing company A pays the rent paid by leasing company B to the trust company in the form of rent after deducting certain expenses;

7) The trust company pays the principal and income to the investor after deducting certain management and other related expenses from the rent paid by leasing company A.

1. Financial leasing means that the lessor purchases the leased object from the supplier according to the specific requirements of the lessee for the leased object and the choice of the supplier, and leases it to the lessee for use, 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.

2. 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.

Article 735 of the Civil Code of the People's Republic of China provides a financial lease contract in which the lessor purchases the leased object from the seller according to the lessee's choice of the seller and the leased object, provides it to the lessee for use, and the lessee pays the rent.

Generally speaking, financial leasing is to rent chickens to lay eggs, sell eggs and rent, and earn laying hens. A significant feature of financial leasing is that the lessee ultimately pays more money to the lessor than the lessor spends, and the term of the financial lease is very long, and the financial lease is a financial product with stable income.