Financial Leasing Is Not Bad Money.

In 2008

Bright and beautiful

New financing channels for textile enterprises

In developed countries, financial leasing is the second largest financing mode after bank loans. More than 30% of the equipment investment in the United States is completed through financial leasing, and the developed regions in Japan and Europe are between 15% and 30%.

China's financial leasing penetration rate is only 5%.

In recent years, financial leasing has risen rapidly in China.

According to statistics, the total amount of domestic financial leasing increased from 50 billion ~600 billion yuan to 155 billion yuan in 2007~2008, and by the end of 2010, the total amount of financing was 700 billion yuan.

Nationwide register

Luo Dongyi, general manager of Lingxian County Hengfeng Textile Co., Ltd. said that in 2010, Hengfeng Textile Co., Ltd., in the two phase of equipment purchase, contacted the Shanghai second textile machinery plant to reach a equipment financing lease agreement, with a total value of 68 million yuan of textile equipment, they paid only 20 million yuan, solving the problem of shortage of funds formed by the rapid expansion of enterprise scale.

He said that the company's three phase 50 thousand spindles and clothing knitted project equipment will also be purchased in this form.

Prior to that, in August 2007, the galaxy Textile Group Limited by Share Ltd and Shanghai electric Leasing Co., Ltd., Pacific Electric and mechanical (Group) Co., Ltd. signed 100 thousand new cotton textile complete sets of equipment financing lease cooperation project.

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Kill two birds with one stone

It can finance and sell equipment.

Under the strong impetus to speed up the adjustment and optimization of industrial structure, the investment in fixed assets of China's textile industry has continued to grow, and the demand for high-end textile machinery and equipment has been increasing.

However, under the current tight financial situation, corporate credit financing capability has weakened, and financing difficulty has become one of the main bottlenecks restricting the development of SMEs.

For textile machinery manufacturers, despite the strong market demand, because the textile enterprises lack the ability to pay for the one-time purchase of equipment, if the credit sale method is adopted (i.e. installment payment), the equipment manufacturers should not only have huge amounts of money to make up for the textile enterprises, but also bear the risk of collecting the surplus money at the same time.

As early as June 2009, China Hi-Tech Group Corporation and China Merchants Bank signed a comprehensive strategic cooperation agreement with China Merchants Bank Agricultural Bank of China Financial Leasing Co in the field of direct rent, leaseback and supplier leasing. The total amount of cooperative funds was 2 billion yuan, which not only made the Heng Tian Group acquire new financing channels, but also improved the company's financial structure.

Since 2010, AVIC has launched a sales promotion and leasing business in the field of textile machinery and equipment, and achieved good product promotion effect.

Baocheng, a subsidiary of AVIC, mainly produces FA311, FA313, FA322 series high-speed drawing frames and instruments, meters and other products.

In product sales, Baocheng company is also facing the problem of buyer's financing difficulties.

With the full cooperation of China Airlines, the 50 thousand cotton production line and 100 thousand textile equipment of AVIC successfully found the home market, successfully developed the textile machinery market in Henan, Guangxi and other places, and reached cooperation with key cotton textile enterprises in the region, and became the chief contractor of major projects.

In the mode of paction consisting of three parties, leasing companies, equipment manufacturers and customers, enterprises have gained broader development space than traditional mode. By speeding up equipment circulation and capital withdrawal, more funds will be concentrated on product R & D and production expansion, so that the core competitiveness of enterprises can be significantly improved.

Since 2005, the 130 regiments of the seventh division of the Xinjiang production and Construction Corps and the Beijing Jingwei Textile Machinery Limited by Share Ltd have negotiated through a long period of time to confirm that the Jingwei Textile Machinery Co., Ltd., by way of financial leasing, provided by Xiang Chang Heng company a total of 122 million 882 thousand yuan of textile machinery and equipment. Chang Heng company invested 76 million 794 thousand yuan to build an agreement on the production plant and auxiliary equipment, and built the 50 thousand spindles compact spinning production project of Xinjiang Changheng company, which was put into operation in August 2007.

This is another successful case of financial leasing.

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Borrow chicken and egg

Do more with limited funds.

For equipment manufacturers, the average amount of a single product is several million yuan, and the development of financial leasing can reduce the pressure of one-time purchase of funds, promote downstream consumption and promote the sale of equipment products.

For users, the financing lease can be simply understood as a loan provided by the finance leasing company with the ownership of equipment as the "basic collateral". This structural feature ensures that the financing lease is faster and simpler than the general bank loan service, and is easier for the small and medium-sized enterprises to obtain.

Generally speaking, textile enterprises can get more advantages from financing lease projects, such as increasing sources of funds, early depreciation, and gaining time.

At present, it is very difficult for private enterprises to apply for bank loans.

Banks should not only consider the risk of lending, but also require enterprises to find guarantees and mortgages, resulting in a high threshold for loans.

Financial leasing is actually a new source of financial resources provided by non bank financial institutions.

It is understood that most of the customer leasing companies currently engaged in equipment leasing are private enterprises.

Financial leasing enables textile enterprises to reduce initial capital expenditure.

Generally speaking, when the lessee pays only part of the initial payment, he can use the necessary equipment, and the leasing company helps the customer to make up for the shortage of the remaining funds.

On the other hand, leasing companies provide partial financing to enable the lessee to keep working capital and freely invest in other investments.

In addition, if it is a loan to purchase equipment, it often leads to a larger risk of depreciation.

In other words, when a business is in good condition, it can not only mention more depreciation, but also pay more taxes.

By means of financial leasing, depreciation can be calculated according to the state regulations according to the lease term, so that the depreciation years can be shortened, and enterprises can return the investment as soon as possible.

Financial leasing has also won time for customers.

In a sense, the competition in textile industry is the competition of machines.

In particular, when enterprises have strict orders for delivery and delivery dates, the demand for quick financing to purchase equipment is often very urgent.

But the bank's approval process is cumbersome, and it takes a long time to get a loan.

Relatively speaking, leasing companies have simpler procedures. If customers are mature, they will be able to raise funds within a month.

This time is very important for enterprises to seize the market.

Therefore, when enterprises lack the potential for capital development, they can consider expanding the market by means of financial leasing.