Similarities and differences between foreign financial leasing and foreign commercial factoring

Today, Hong Kong Xintong will introduce to you the similarities and differences between foreign financial leasing and foreign commercial factoring.，Let’s learn together! one、Definition of finance lease. Finance lease refers to the lessor’s obligation to the supplier based on the lessee’s、Selection of rental properties，Purchase rental items from suppliers，available to tenants，Transaction activity where lessee pays rent。

two、Business scope and service objects of financial leasing

1. Business scope: financial leasing business；leasing business；Purchasing leased assets at home and abroad；Residual value treatment and repair of leased property；Lease transaction advice and guarantees；Other businesses approved by the approval department；
2. Financial leasing of service objects directly serves the real economy，Promoting the development of equipment manufacturing industry、SME financing、Enterprise technology upgrading and transformation、Equipment import and export、It plays an important role in commodity circulation and other aspects，It is to promote the integration of industry and finance、An important means to develop the real economy。

From the perspective of industry distribution，Tenants can either be from the manufacturing industry、transportation industry、Communications industry、Textile industry、Agriculture and various types of financial institutions，Service industry companies，It can also come from public departments or institutions of the government，such as hospital、Government agencies, etc.。

three、Foreign commercial factoring

1. Definition: Commercial factoring refers to the seller transferring the accounts receivable arising from the goods sales (service) contract entered into with the buyer to the factoring company.，Trade financing provided by factoring companies、Comprehensive business services such as accounts receivable management and collection。
2. Business ScopeTrade Finance；Sales account management；Customer credit investigation and evaluation；Accounts receivable management and collection；Credit risk guarantee services。

Four、Similarities between the two

1. Both departments are under the jurisdiction of the Ministry of Commerce.；
2. Both have two or three parties。Finance leases generally involve the seller、Financial leasing company (buyer)、lessee、The seller and the financial leasing company have a sales contract，The financial leasing company and the lessee have a financial leasing contract；Commercial factoring generally involves the buyer、seller、Commercial factoring company。

The buyer and seller are sales contracts，The seller and the commercial factoring company have a factoring contract；

1. Both belong to trade finance。Financial leasing provides financing services to the lessee during the equipment sales process；Commercial factoring provides financing services to sellers of goods on credit during the sale of goods.；
2. Both boost sales。

Financial leasing can promote the sale of equipment by purchasing the leased property and leasing it to the lessee.；Commercial factoring provides financing to the seller through the transfer of accounts receivable to promote the seller's sales.；five、The difference between the two

1. The two have different rights。Financial leasing is based on the property rights of the equipment and the claims arising from the lease.；Commercial factoring is based on debt financing generated from open account trade；
2. Different levels of risk。

Financial leasing is based on property rights and creditor's rights，Compared with commercial factoring claims, the risk level is lower；Commercial factoring is based on debt financing under trade，high risk；

1. credit risk。The main credit risk of financial leasing comes from the lessee；The main credit risk of commercial factoring comes from the buyer and seller；
2. Customer financing limit。

Financial leasing is mostly based on large equipment，Generally the amount is relatively large；Commercial factoring generally provides customers with relatively small financing amounts，But financing is fast；5、Service scope。Generally provide equipment financing leasing、Equipment maintenance、Equipment residual value processing and other services；Commercial factoring generally provides trade finance credit guarantees、Accounts receivable management and collection services。If you still need to know more about this，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。