Here comes the useful information｜The development history of financial leasing

Hong Kong Xintong-Today I will introduce to you the development process of financial leasing，Let’s learn together! one、A brief introduction to financial leasing theory (1) The definition of financial leasing changes with the development of business and the change of concepts，Legal and regulatory definitions of financial leasing business tend to be unified。1999Year，"Contract Law of the People's Republic of China" is promulgated，Becoming the first law to clearly define "financial lease"。

According to the definition of "Contract Law"，“A financial lease contract is a contract between the lessor and the seller based on the lessee’s、Selection of rental properties，Purchase the leased property from the seller，available to tenants，A contract whereby the lessee pays rent”。

Due to historical reasons and differences in regulatory authorities，The phenomenon of "financial leasing" and "financial leasing" coexisting in the financial leasing industry，That is, non-bank financial institutions mainly engaged in financial leasing business under the supervision of the China Banking Regulatory Commission (formerly the People's Bank of China)，and institutions specializing in financial leasing business under the supervision of the Ministry of Commerce (formerly the Ministry of Foreign Trade and Economic Cooperation)。

Due to differences in regulatory authorities and market access，Financial leasing and financial leasing companies in the business scope、supervision

Require

There are significant differences in，That is, a financial leasing company has a financial license，Approved to carry out financial business，Wider business scope，But in terms of investor qualifications、Related party transactions、Sales and leaseback businesses face more stringent supervision

Require

。

1. The characteristics of financial leasing are based on my country’s current legal and regulatory system.，Financial leasing mainly has the following characteristics：
2. Financial leasing involves the lessor financing funds to provide the lessee with the necessary equipment.，With financing、double action of melt；
3. Financial leasing mainly involves the lessor、Lessee and Seller，Consists of two or more contracts (purchase contract and lease contract)；
4. rental period，The lessor enjoys ownership of the leased property，Lessee enjoys possession、Right to use and benefit，and pay rent to the lessor in installments in accordance with the lease contract.；
5. When the lease period expires，The lessor and the lessee agree on the ownership of the leased property，There is no agreement or the agreement is unclear，The ownership of the leased property belongs to the lessor。
6. Current forms of financial leasing，my country's financial leasing industry is still in its initial development stage，The leasing form is relatively simple，Mainly includes direct leasing、Sale and leaseback、Sub-lease and leveraged lease。Direct leasing is the most basic form of leasing，It means that the lessee chooses to rent equipment according to his own needs.，The lessor purchases and leases the equipment for the lessee to occupy after assessing the risks of the leased project.、use。
7. Overview of the development of financial leasing Financial leasing is an important channel for equipment investment and sales，combined with financing、melt、Promotion、Asset management and other functions，has been widely accepted in developed countries，Becoming a more mature financing model。There is a significant gap between China’s leasing penetration rate and leasing developed countries such as the United States.，This reflects that this emerging business needs to be further accepted and recognized，It also heralds the broad development prospects of China’s financial leasing industry.。
8. The significance of developing financial leasing at the macro level，Financial leasing has the ability to smooth macroeconomic fluctuations、Promote industrial structure adjustment and technological upgrading、Avoiding trade and technical barriers。And at the micro level，Financial leasing can effectively lower the financing threshold for small and medium-sized enterprises、Drive product sales and expand market share、Optimize corporate asset-liability structure、Promote comprehensive operations of commercial banks、Improve brand effect and customer satisfaction、Effectively control the flow of funds。

two、The development history of my country's financial leasing industry dates back to the early 1980s.，With the strong demand for the introduction of foreign capital and technology，my country's financial leasing industry has started。30years，The industry has experienced from disorderly development to severe rectification、The process from contraction pain to gradual recovery，Financial leasing operations and supervision are also continuing to mature based on learning from historical experience and lessons.。

in recent years，As business needs continue to grow and regulatory authorities moderately relax，The entire industry is facing another round of rapid development。overall，The historical development characteristics of the industry can be summarized as：Started early、Developing quickly、Deviate further、Rectification is stricter。The tortuous development process of financial leasing is due to both the external environment and，If the credit environment is poor、The legal system is not perfect, etc.，It also has its own narrow financing channels、Reasons such as weak risk management awareness and ability。

1. external cause
2. Social credit awareness and institutional foundation are weak。
3. The regulatory system is imperfect，There is regulatory competition and regulatory arbitrage under multi-party supervision.。
4. The legal system is not perfect，The cost of corporate rights protection is high。
5. internal cause
6. Insufficient financial strength，Financing channels are narrow。
7. Weak risk management awareness and capabilities。
8. Controlling shareholders pass improper related transactions，Convey benefits。

three、Analysis on the Current Situation of my country's Financial Leasing Industry，Due to historical reasons and differences in regulatory authorities，The operating entities of my country's financial leasing industry are mainly composed of three parts.：Financial leasing company、Sino-foreign joint ventures and wholly foreign-owned financial leasing companies and domestic pilot financial leasing companies。Among them, financial leasing companies are supervised by the China Banking Regulatory Commission.，The other two categories are regulated by the Ministry of Commerce。

in recent years，With the booming development of the financial leasing industry，The number of three types of leasing companies is growing rapidly，Financial leasing companies have financial management rights

Advantages

，The development trend is more rapid。

1. The main forms of leasing are sale-leaseback and direct leasing. The development of my country's financial leasing industry is still in its infancy.，The leasing form is relatively simple compared to foreign countries.，Mainly engaged in sale-leaseback and direct leasing business，sublease、New leasing businesses such as leveraged leasing are still being explored by some companies.，The proportion of business is not large
2. High customer and industry concentration，Customer quality is relatively good at present，Financial leasing companies generally have high customer and industry concentration，and present ongoing trends to specific industries、The trend of customer concentration，Business investment is mainly concentrated in aviation、Shipping、Mechanical equipment、Utilities and energy equipment, etc.。
3. Funding sources are basically stable，Lack of long-term funding sources, financial leasing companies rely on the background of the parent bank，Through cross credit between the parent bank and other banks，Able to obtain stable low-interest loans from other non-shareholder banks，Conducive to the gradual expansion of business scale。

In contrast to the abundance of short-term funds,，The problem of lack of long-term funding channels for financial leasing companies is more prominent.，It is mainly restricted by the "Measures for the Administration of Financial Leasing Companies" regarding the restrictions on absorbing deposits from bank shareholders, the limited qualifications for issuance of financial bonds, and the cumbersome approval process.。(4) Continuously develop and innovate business as operating strength continues to increase，Financial leasing companies increase product and business innovation，Meet diverse market needs。

First, the operating leasing business has made progress；Second, the domestic SPV business model is becoming increasingly mature.；Third, business expansion abroad；The fourth is to cooperate with machinery manufacturers，Develop the direct leasing model and joint leasing model of construction machinery manufacturers for end users such as small and micro enterprises and individuals.。(5) Simple profit model，The weak bargaining power is due to the rapid expansion of business scale.，Financial leasing companies have achieved rapid profit growth in recent years。

The profit model of financial leasing companies is basically the same，That is, it mainly relies on interest spreads and fee income from financial leasing.。at present，The pricing mechanism of financial leasing companies basically refers to loan interest rates.，Business focuses on electricity、steel、Infrastructure and other traditional industries，Customers are mainly large and medium-sized，Leasing companies have weak bargaining power，In addition, the cost of funds is higher than that of banks，Profitability is not much compared to bank credit

Advantages

。

1. Corporate governance and internal control mechanisms are gradually improving and currently，Most financial leasing companies refer to banks’ internal control and risk management systems.，A relatively sound corporate governance structure has been initially established.，The "three meetings and one layer" are established in accordance with the company law and the company's articles of association.

Require

perform duties，and set up a risk management committee under the board of directors、Related Transactions Control Committee、Professional committees such as the Salary and Appraisal Committee。

1. Internal control risks are currently，The corporate governance structure of financial leasing companies has been relatively complete，But the board of directors、The role of special committees has not yet been fully realized，Business processes need to be improved。First, some companies have not yet established a risk control and internal audit reporting mechanism to the board of directors.，Heads of risk control and internal audit departments are not appointed by the board of directors，It is difficult for the board of directors to fully understand the company’s internal controls、Risk management and performance of senior management’s duties。

Second, independent directors are appointed by the chairman of the board，Unable to publish independent、objective opinion。Third, the pre-rental investigation is insufficient.，Some projects have experienced overdue rents or even company closures for rectification shortly after launch.。(8) Legal risks The legal risks faced by financial leasing companies are mainly reflected in the confirmation of ownership of leased properties.。

During the development of financial leasing business，The lessor only has contractual ownership rights，but does not actually occupy and use the leased property，Giving up all functions of ownership related to the use value of the leased property，become a nominal ownership。therefore，It is necessary to disclose the rights status of all parties in a certain public way，Maintain transaction security。

Under our country’s existing legal framework，Except for airplanes、Ships and other rental properties，The registration and publicity system for many movable leasehold properties needs to be improved.，The leasing company cannot confirm and control the transfer of ownership of the leased property from the registration and publicity authority before and after the capital is invested.。Although we have the purchase contract of the leased property、Original documents such as invoices，However, it is still difficult to avoid ownership disputes over leased property。

According to property law，Once the lessee transfers or mortgages the leased property to a bona fide third party，Leasing companies often have difficulty recovering leased property。Legal risk management，When the relevant laws have not yet been perfected，In order to avoid ownership disputes, financial leasing companies，The main approaches taken include：First, pay attention to the versatility of the rental items when selecting equipment.，Avoid equipment transfers as much as possible。

If construction machinery and equipment are not licensed or

Require

The bus company that leases the vehicle pledges the vehicle registration certificate to the leasing company, etc.。The second is to make full use of existing information platforms，For example, check whether the leased property is mortgaged through the Financial Lease Registration and Publicity System of the Credit Information Center of the People's Bank of China.。Four、The international perspective and development trends of risk prevention and control in the financial leasing industry. The financial leasing industry is a pillar industry that promotes the development of small and medium-sized enterprises.，highly valued in Western developed countries。

South Korea、Countries such as Japan have even introduced special legislation，While regulating the financial leasing industry，Provides strong support to the industry in terms of taxation and other aspects。(1) Provide diversified financing channels，Preventing liquidity risks in developed countries with mature financial leasing industry，Leasing companies can obtain long-term funds through various channels and on preferential terms.，Match assets and liabilities。

as in the united states，In addition to parent company funds，Leasing companies can take full advantage of developed financial markets，Issuance of bonds through intermediary companies，Raise funds from investors，Targets include insurance companies、Institutional investors such as banks，and equipment ownership serves as bond security。(2) Good integrity culture and strong renovation capabilities，Effectively controlling credit risk, the development of the financial leasing industry is inseparable from a good credit environment as a guarantee。

The credit reporting system in the United States is very advanced，personal credit、Business credit details，All can be queried from the Internet with certain authorization.，And there are specialized companies developing related systems，by processing、Compile the annual report of the lessee company、tax data，Form a persuasive credit evaluation system。Complete rental property recycling system and strong renovation capabilities。

Mature foreign leasing companies have strong awareness and capabilities of equipment refurbishment，The value of a recycled rental item is approximately 10%-30% of the value of new equipment，Refurbished products can be sold for 70% of new prices，Therefore, we actively carry out rental property recycling，And when rental property recycling is institutionalized，Leasing companies have property rights protection，The credit risk borne is effectively controlled。

1. Insurance systems for specific risks developed countries cover certain specific risks encountered by leasing companies，such as political risk、Implement policy insurance for default risks, etc.，Ensure its normal operation。Such as the official credit agency of the United States, the Overseas Private Investment Corporation，Providing comprehensive political risk insurance to multinational leasing companies。
2. Pay attention to the protection of equipment ownership of lessors，Reduce legal risks and comply with U.S. law，If the lessee defaults，Not only can the lessor take back the equipment，You can also continue to collect all unpaid (including undue) rent from the original lessee or guarantor；If the lessee defaults，and prevent the lessor from retrieving the equipment.，will be subject to criminal penalties。
3. Separation of project development and review，Control operational risk leasing projects are developed by agents，Conduct preliminary screening and collection of credit materials，The lessee’s credit review is controlled by the leasing company，Realize the separation of project development and project review。Compared with the separation of front and back offices commonly used by financial leasing companies,，Project approval by a completely legally separate entity，Effectively control human feelings and one-sided thinking，Conducive to controlling operational risks。

five、Policy recommendations

1. Optimize internal controls and business processes of financial leasing companies
2. Cultivate the characteristics of financial leasing companies、Differentiated development model
3. Establish and improve the legal system for financial leasing
4. Strengthen macro-prudential management and micro-prudential supervision of financial leasing
5. Explore appropriate relaxation of financing channels
6. Increase fiscal and tax support for the financial leasing industry
7. Enhance publicity and guidance on financial leasing business. If you still need to know more about this aspect,，You are welcome to consult Hong Kong Xintong at any time!

About Hong Kong Xintong

Hong Kong Xintong focuses onGuangdong and Hong Kong license plates、Shenzhen Hazardous Chemicals Business License、Shenzhen labor dispatch licenseandShenzhen Charity Foundationapplication services，Assist customers to applyShenzhen travel agency business license、Shenzhen pawn shop business license、Shenzhen auction house license and other mainstream domestic financial licenses，Support enterprises to achieve compliance expansion of cross-border financial business。Also availableODI overseas investment registration、International travel agency registration and other services，Help enterprises expand their presence in international markets。Provide one-stop compliance solutions for enterprises。To learn more，Please contactHong Kong Information Communications Consultant。