Simple financial lease

Simple financial lease means that the lessee selects the leased items to be purchased, and the lessor leases the leased items to the lessee after assessing the risks of the leased project. During the entire lease period, the lessee does not own the property but has the right to use it and is responsible for repairs and maintenance of the leased property. The lessor is not responsible for the quality of the leased items, and the depreciation of the equipment is on the lessee's side.

Leaseback financial leasing

Leaseback leasing means that the owner of the equipment first sells the equipment to the lessor at the market price, and then leases back the original equipment in the form of a lease. way. The advantages of leaseback leasing are: first, the lessee not only has the right to use the original equipment, but also obtains a sum of funds; second, since the ownership does not belong to the lessee, after the lease expires, he can decide to renew or stop the lease according to needs, thereby increasing the The lessee's adaptability to the market; third, after the leaseback, the right of use has not changed. The lessee's equipment operators, maintenance personnel and technical management personnel are familiar with the equipment, which can save time and training costs. Equipment owners can use most of the funds from the sale of equipment for other investments, put the funds to use, and use a small part to pay rent. Leaseback leasing business is mainly used for used equipment.

Leveraged financial leasing

Leveraged leasing is similar to syndicated loans. It is a financial leasing with tax benefits that specializes in large-scale leasing projects. It is mainly led by a leasing company as the backbone. Company, financing a very large leasing project. First, establish an operating organization that is separate from the main body of the leasing company - a fund management company specifically established for this project to provide more than 20% of the total project amount. The remaining sources of funds are mainly to absorb idle hot money from banks and society, and use 100% to enjoy low taxes The benefits of "using two and eight" leverage to obtain huge funds for leasing projects. The rest of the practices are basically the same as financial leasing, except that the complexity of the contract increases due to the wide range of aspects involved. Because it enjoys tax benefits, standardized operations, good comprehensive benefits, safe rental recovery, and low costs, it is generally used for financial leasing of aircraft, ships, communication equipment, and large complete sets of equipment.

Entrusted financial leasing

One way is that a person who owns funds or equipment entrusts a non-bank financial institution to engage in financial leasing. The first lessor is also the principal, and the second lessor is also the principal. is a trustee. A major feature of this kind of entrusted leasing is that it allows companies that do not have the right to lease operations to "borrow" the right to operate. E-commerce leasing relies on entrusted leasing as a business leasing platform.

The second method 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, which is also called entrusted purchase financing lease.

Project finance lease

The lessee signs a project finance lease contract with the lessor with the project’s own property and benefits as guarantee. The lessor has no right to the lessee’s property and income other than the project. The right of recourse and the collection of rent can only be determined based on the cash flow and benefits of the project. The seller (that is, the manufacturer of rental items) uses this method to promote products and expand market share through the rental company it controls. This method can be used for communication equipment, large medical equipment, transportation equipment and even highway operating rights. Others include return-type leases, also known as sale-leaseback financial leases; financing sub-lease, also known as sub-financing leases, etc.

Operating lease

When calculating the rent on the basis of financial lease, more than 10% of the residual value is left. At the end of the lease term, the lessee can choose to renew the lease of the leased object. , rent out, stay for purchase. The lessor may or may not provide maintenance for the leased items. In accounting terms, the lessor shall depreciate the leased items.

International Financing Sub-Leasing

If a leasing company finances and leases leased items from other leasing companies and then sub-leases them to the next lessee, this business method is called financing sub-leasing. Usually conducted internationally. At this time, the business practices are not much different from simple financial leasing. The lessor's business process of leasing equipment from other leasing companies is conducted between financial institutions. In the actual operation process, the financing amount is only determined based on the purchase contract, and there is always no relationship with the final lessee in the operation of funds for purchasing the leased items. direct contact. The approach can be very flexible, and sometimes the leasing company even directly uses the purchase contract as the leased asset to sign a sublease contract. This approach is actually a way for the leasing company to raise funds. As the first lessee, the leasing company is not the end user of the equipment, so it cannot extract the depreciation of the leased object.

Another function of sub-leasing is to solve the legal and operational procedural issues of cross-border leasing. Direct financing

Direct financing is a method of financing funds between supply and demand parties that directly form a creditor-debt relationship through certain financial instruments, without financial institutions as intermediaries. The unit that needs to borrow funds and the unit that lends funds will transfer monetary funds through direct agreement. Direct financing forms include: buying and selling securities, advance deposits and credit sales of goods, currency loans without going through banks and other financial institutions, etc. Direct financing can absorb social hot capital to the greatest extent possible and directly invest it in the production and operation of enterprises, thus making up for the shortcomings of indirect financing.

Indirect Financing

Indirect financing means that units with temporarily idle monetary funds can use them in the form of deposits or by purchasing securities issued by financial institutions such as banks, trusts, and insurances. Temporarily idle funds are first provided to these financial intermediaries, and then these financial institutions provide funds to the units in need of funds in the form of loans, discounts, etc., or by purchasing securities issued by units in need of funds, thereby achieving financial financing. process.