Financing Of Small And Medium Enterprises

Financial leasing is a new financial tool which integrates financing and financing, trade and technology renewal.

The operation procedure is: an enterprise that intends to purchase a certain equipment by way of leasing will apply for leasing business to the leasing company after the equipment, specifications, models and delivery conditions are selected by itself. After the leasing company considers that the project is feasible, the leasing company will finance it, and purchase the equipment needed by the leasing company to the supplier according to the requirement of the lessee, and then deliver it to the lessee, and the lessee will only pay the rent on time.

The general lease period is longer and the service life of the equipment is comparable. During the whole lease period, the ownership of the leasehold belongs to the lessor, and the right to use belongs to the lessee, and the lessee must bear the obligation to maintain the equipment.

After the end of the lease period, the lessee symbolizes the delivery of some of the price and obtains the ownership of the equipment.

China's financial leasing started after the reform and opening up. Up to now, China's civil aviation system has introduced more than 300 international advanced aircraft through financial leasing, totaling up to 15 billion US dollars, and the total amount of mobile telecommunications and program-controlled telephone equipment imported from posts and telecommunications system has reached about 2000000000 US dollars.

More than 6000 enterprises in China have used financial leasing to carry out technological pformation, with a total sum of 27 billion 600 million yuan.

But at present, more business people have not really understood the real meaning of financial leasing.

Financial leasing: financial leasing, such as finance, trade and production, is closely integrated with bank leasing, business credit and consumption credit. This is an important way to achieve optimal allocation of resources. Three.

Financial leasing is a financial instrument that is second only to bank credit in the western developed countries. At present, the investment in the world near 1/3 is completed in this way.

Financial leasing is a special financial product that combines trade, finance and leasing. The Lessor provides financial services rather than simple rental services.

Therefore, financial leasing is a quasi financial business, which can be operated by financial institutions, but can also be operated by non-financial institutions.

The principle of rent calculation in financial leasing is: the lessor calculates the rent according to the interest rate agreed by the two parties based on the purchase price of the leased object and the time occupied by the lessee to occupy the lessor's funds.

It is essentially a financial paction with traditional leasing, and it is a special product of financial instruments.

It combines with trade, so it must be two contracts and three parties to complete the whole paction.

There are two related contracts (financial leasing contracts and lease purchase contracts) for financial leasing.

The lease contract determines the financing proceeds, and the purchase contract determines the financing cost.

The two contract hampered the rights and obligations of the three parties; because the ownership of the leasehold is only a form of ownership that the lessor takes to control the risk of the lessee's repayment of the rent, which may eventually be pferred to the lessee at the end of the contract. Therefore, the purchase of the leasehold is selected by the lessee, and the maintenance and repair is also the responsibility of the lessee, and the lessor only provides financial services.

Financial leasing must include three parties (lessor, lessee and supplier). Sometimes the lessor acts as a supplier at the same time (structured participation in the lease), sometimes the lessee acts as the supplier (the return rent), and the lessee acts as the lessor (rentals).

Financial leasing: it is a financial tool that was born in the United States in 1952. It is a financing method that combines funds and equipment closely through short time, low cost and specific procedures. For the enterprises with shortage of funds, the advantages of financial leasing are manifold.

Financial lease is easy to recover, easy to handle and participate in business activities such as banks can not operate the scope of the business, so the leasing enterprise's credit requirements are not very high, mainly depends on whether the cash flow of the project is sufficient.

Therefore, the guarantee for the project is not very high, which fills the blank of bank loans.

Financial leasing has low credit requirements for enterprises, so that most SMEs can carry out equipment renewal and technological pformation through this way.

Small and medium-sized enterprises have low capital and low credit, and some additional restrictions such as compensatory balance and regular equal repayment can be obtained by using bank credit to purchase equipment. Thus, SMEs can not get one hundred percent of the amount of financing.

The financing lease is different. Since the purchase price is paid in full by the leasing company, the enterprise only pays the rent in installments, so the enterprise has one hundred percent of the financing amount.

There are two main functions of financing lease: financing function and promotion function.

Therefore, in the period of economic development, when capital is needed, it can give full play to its financing function.

In the period of economic depression, when it is necessary to promote investment and consumption demand, it can give full play to its promotional function.

As long as the market is changing, no matter which direction it changes, it will bring business opportunities to the financial leasing industry.

In order to encourage investment, the state provides tax concessions for financing leases, and can accelerate the depreciation of leases through financial leasing projects.

In fact, some taxes that should be turned over to the state are used to pay rent, which accelerates the upgrading of the equipment.

To save the project construction cycle, financial leasing will synthesize two procedures of financing and purchasing, so that the efficiency of project construction can be improved.

Because of the flexibility and risk resisting ability of the lease itself, it also reduces the unnecessary complicated procedures in many project construction processes, and enables enterprises to go into production as early as possible, see the benefits as early as possible, seize the opportunities and seize the market.

Second, the procedures for leasing equipment are usually simpler and faster than normal trade, and the management is simple. Especially in the import leases, the leasing companies can sign the import contracts and make use of their professional advantages, which will greatly shorten the import time. Usually, the leasing companies only need 1~2 months to import equipment.

The cost of financing is low, and the rent of financial leasing is higher than that of banks.

However, because the financial leasing is a combination service, the rent includes the cost of the preliminary work such as project evaluation and equipment selection, and also the cost of equipment purchase and service.

If these costs are included, the cost of bank loans is higher than the cost of leasing.

In addition, leasing projects can enjoy the benefits of accelerated depreciation. It can be seen from the overall cost of capital that financial leasing is much more cost-effective.

To avoid inflation, it will take a lot of time for an enterprise to acquire a set of production equipment and accumulate it on its own to purchase.

In the period of inflation, early purchase is lower than late purchase cost.

The use of financial leasing can get the equipment first, and then repay the money with the benefits generated by the equipment.

In the case of inflation devaluation, the price of equipment will continue to rise. The rent of financial leasing is determined by the price of equipment at the time of the lease, and it is almost invariable during the lease period. Therefore, the enterprise will not pay more capital costs for inflation.

We should guard against exchange rate and interest rate risk. If we purchase foreign leases from abroad, we need to use foreign exchange.

Financial leasing can convert foreign exchange into Renminbi, and RMB denominated leasing can enable leasing enterprises to avoid exchange rate risks arising from depreciation of the renminbi.

Because financial leasing starts with fixed interest rates, leasing enterprises can avoid interest rate risk caused by interest rate fluctuations.

To avoid trade barriers, every country has certain restrictions on trade. Through financing, leasing can avoid the restriction of "direct purchase", thus breaking through trade barriers and making roundabout entry.

In addition, the way of financing and leasing can also break the financial control of some countries, and change the "loan" to "financing", which can avoid the restriction of direct financing.

Flexible leasing is a product of three combinations of trade, finance and leasing. It not only maintains its own characteristics but also absorbs its advantages. Therefore, it is flexible in operation and can adapt to many situations in many ways. Therefore, it is convenient and fast to make projects, and the success rate is higher than other financing methods.

Financial leasing can also adopt flexible payment terms, such as deferred payment, increasing or decreasing payment, so that the user can customize the payment according to his own capital arrangement.

To increase the cash flow of small and medium-sized enterprises, the loan period of small and medium-sized enterprises is usually much shorter than that of the equipment if they purchase equipment from bank loans.

And leasing the same type of equipment is not, it can approach the life of this asset, so its cost can be apportioned in a longer period.

This can bring double benefits to the small and medium sized enterprises which are in short supply: first, make most of the funds remain in a state of flux, because cash payments can be apportioned in the whole life span of the assets, so that the rent paid for each period will be reduced; secondly, the cost allocation can be more closely matched with the business income of the enterprise during the whole life span of the assets.

This can avoid the difficulty of capital turnover caused by the large amount of capital used by the imported equipment, and on the other hand it brings high investment income.

To optimize assets structure, financial leasing can also optimize assets structure for enterprises with large amount of assets solidified and precipitated.

In the specific operation, it can be realized through the method of selling and leaseback: first, the enterprise will sell its equipment (or fixed assets) to the finance leasing company according to the agreed price of the two parties, then rent the equipment back from the leasing company, and share the benefits of the tax concessions with the finance leasing company.

Through this kind of "leaseback", enterprises pform materialized capital into monetary capital, turn bad assets into high-quality assets (cash), release liquid capital, maintain the liquidity of funds, improve the cash flow of enterprises, revitalize the stock assets, and do not affect the continued use of property by enterprises.

Financial leasing: caution risk!

* finance and leasing have financial attributes, and financial risks run through the whole business activities.

For example, for the lessor, the biggest risk is the renter's ability to rent, which directly affects the operation and survival of the leasing company.

We should pay more attention to the risk of renting from the beginning.

If the interest rate structure of the leasing company to the leasing company does not conform to the interest rate structure of its own financing, interest rate risk will also appear in interest rate.

If a financial leasing contract uses foreign currency, its risk is even greater, especially the use of non US dollar hard currency. The risk of double exchange rate sometimes doubles the financing cost of enterprises.

Currency payments also have risks.

In particular, international payments, payment methods, payment dates, time, remittance channels and improper payment methods will increase risks.

In order to avoid risks, the most fundamental one is to standardize financial leasing contracts.

Besides, some risks can be avoided.

For example, exchange rate risk can be avoided by using the method of clearing the rent in the local currency, using the forward exchange rate or the exchange rate adjustment method.

Another way to avoid loss is to rent repayment guarantee.

Because the lessor has the greatest risk in financing leasing activities, almost every lease contract has a letter of guarantee which is beneficial to the lessor, which is the basic guarantee for the leasing business.

In the foreign currency leasing contract, the debt with high interest rate risk can also be converted into a debt with small risk through the exchange rate and interest rate adjustment.

In the process of purchasing equipment in trade, the payment is made by letter of credit, and the commercial reputation is changed into bank credit and trade risk is reduced.

In economic activities, risks can not be completely avoided. Therefore, preparations should be made beforehand.

For example, in financial management, we can reserve some funds in peacetime, such as reserve for bad debts.

When a certain reserve fund is normally extracted from the cost, the expansion of the loss should be immediately controlled when the loss occurs, and the reserve fund will be used to compensate for the loss.

In addition, insurance can be used to remedy the risk loss.