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Favorable financial leasing industry and company advantages

Date: 2022-11-07
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1. Improve the liquidity of enterprise funds and improve the financial situation. For leasing enterprises, financial leasing has some unique characteristics compared with other financing methods;

2. Optimizing the asset structure to reduce the risk of financial assets, on the one hand, because the use of finance lease funds is clear, it reduces the information asymmetry of the lessor, thereby reducing the risk. On the other hand, compared with general enterprises, financial leasing companies have larger scale, better credit level and more perfect risk management system. Banks are more willing to finance these financial leasing companies than general enterprises, thus optimizing the bank's asset structure to a certain extent and reducing financial risks;

3. Strengthen product promotion to improve the competitiveness of enterprises. It is more conducive to the recovery of receivables for manufacturers to promote their products through financial leasing. Compared with other means of promotion such as installment payment and buyer's credit, the goods sold by financial leasing have less risk because their ownership has not been transferred and they have a fixed purpose, and their future cash flow is more guaranteed. Their installment payment and tax policies are also more conducive to attracting general consumers, so as to achieve the sales of manufacturers' equipment and other goods. It is a favorable choice for enterprises, especially equipment manufacturers, to achieve sales promotion;

4. Revitalize the idle assets of enterprises and improve the utilization rate of resources. The leasing method can be used to transfer the idle equipment of large and medium-sized enterprises to small and medium-sized township enterprises, transfer the second-hand equipment from developed areas to underdeveloped areas, transfer resources according to the gradient of economic development, effectively use the idle equipment and improve the efficiency of resource utilization;

5. To circumvent trade barriers, all countries have certain restrictions on trade with each other. Through financial leasing, the restrictions on direct purchase can be avoided, so as to break through trade barriers and enter by detour. In addition, the financial regulation of some countries can be broken by means of financial sublease, and the restriction of direct financing can be avoided by changing the loan to financial lease.

As a modern financing method, financial leasing is safer for investors than bank credit.

Financial leasing is a financing method in which the lessor, mainly a professional financial leasing company, directly purchases the leased objects, mainly machinery and equipment, and other fixed assets needed by the lessee, mainly enterprises, and then hands them over to the lessee for use, paying the rent on a regular basis. Before the rent is paid, the property right of the leased object belongs to the lessor, and after the rent is paid, the property right is transferred to the lessee. This way can avoid two kinds of risks for investors: one is to avoid enterprises from misappropriating loans; Second, the ownership of the equipment purchased with loans belongs to the financial institutions before the enterprise has fully paid the rent, and the financial institutions can dispose of it at will. For the financial institutions, the security is much better than that of loans, which is also the reason why the financial leasing business in developed countries has developed rapidly and its proportion in the whole financing is getting higher and higher.

In 2021, the market penetration rate of China's financial leasing industry will be about 6.48% *. The future development space of financial leasing is still promising, mainly because China's current financial leasing industry has a low penetration rate and wide applicability. Compared with mature economies, the market penetration rate of the leasing industry in developed countries in Europe and the United States is about 15% - 30%, and the penetration rate of the leasing market in Australia has reached 40%. By contrast, the penetration rate of the leasing market in China in 2021 will be less than 7%, which has a large development space.


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