Accounts Receivable Financing、Analysis and research on financial leasing and leveraged buyout financing (recommended dry stuff!)

Accounts Receivable Financing、Analysis and research on financial leasing and leveraged buyout financing (recommended dry stuff!) Since the reform of the economic system，my country's small and medium-sized enterprises have created huge social wealth，Promoted the rapid development of China's economy。But shortage of funds and financing difficulties are a very common problem。This article discusses accounts receivable financing, a common financing method used by small and medium-sized enterprises.、Discussion and analysis of financial leasing and leveraged buyout financing。

one、Accounts Receivable Financing (1) Accounts Receivable Financing Definition and Methods Accounts Receivable Financing Definition：The amount of accounts receivable is large，causing a cash shortage，Can be mortgaged or sold to raise funds，That is, the financing of accounts receivable，Enable enterprises to obtain cash in a timely manner，Solve the urgent needs of production and operation。Two specific methods of accounts receivable financing：1． Accounts receivable mortgage。

Accounts receivable as collateral，Lenders not only have the right to repay accounts receivable，And also exercise the right of recourse when accounts receivable are not repaid as scheduled.，Companies that borrow from banks using accounts receivable as collateral must bear the losses incurred as a result.。2． Accounts receivable sale。Refers to the borrower selling its accounts receivable to the lender，and when the borrower's customers fail to pay their accounts receivable，The lender cannot exercise recourse against the borrower，You have to bear the losses yourself。

(2) Accounts receivable financing costs and advantages Accounts receivable costs have：1． opportunity cost。Corporate credit sales mean that the company cannot collect payment in time，could have been used for other investments and earned income，opportunity cost。2． manage

cost

。Customer reputation survey fee、Account Recording and Custody

cost

、Collection

cost

、Collection

cost

、Collect information and other

cost

constitute management

cost

。3． bad debt cost。

Bad debt losses that grow proportionally with size，become the biggest risk。Advantages of Accounts Receivable Financing：1． Improve asset-liability ratio。Enterprises can obtain funds without increasing liabilities，Use funds received to accelerate development。2． Very highly elastic，When sales increase，A large number of purchase invoices can be directly and automatically converted into funds。3． relatively low cost。

Accounts receivable as collateral，Good customer credit status，Ability to obtain loans at lower interest rates。4． Short financing time、High efficiency。Lower-cost and more efficient professional credit review services provided by financial institutions increase efficiency。5． Promote enterprises to strengthen management，Scientific decision-making。Must start from finance，Accounting，Improve management in all aspects such as production, marketing and human resources，Create conditions for its financing with good reputation and credit standing。

(3) Environment construction for accounts receivable financing 1. Establishing a business's business credit When a seller's business gives business credit to a buyer，Consider the other party’s creditworthiness，To ensure that accounts receivable can be recovered。Establishment of business credit，Fundamentally, it depends on the profitability and growth ability of the enterprise.。

2． To establish good bank credit, my country’s commercial banks need to improve their bank credit，First, state-owned commercial banks should be restructured，Increase competition among banks；The second is to strengthen the qualification review of bank executives，Promote and improve the credibility of the financial community；The third is to establish a credit system，Improve financial order；The fourth is to increase financial legislation，Strengthen industry self-discipline。

3． Establish an accounts receivable financing company. The financing company will conduct accounting checks on each enterprise according to the credit department.、Credit evaluation of each bank business，Consider risks and benefits，Decide whether to accept corporate applications。4． Establish a credit rating agency. A professional credit rating agency must investigate the buyer's credit and the seller's credit.，to reduce credit risk。

5． Strengthen the construction of the legal system for accounts receivable. Commercial credit and bank credit must rely on legal regulations to rebuild and maintain，Financing companies’ risks must be shared by insurance laws。

two、Financial lease (1) Definition and main characteristics of financial lease Definition of financial lease：Finance lease refers to the lessor based on the specifications proposed by the lessee and the terms agreed to，and enter into a lease contract with the lessee，Conditional on payment of rent，Enable the lessee to obtain the required factory、A method of trading capital goods and other equipment。Main features of financial leasing：1． The combination of capital movement and physical movement. The combination of commodity form and capital is the main feature of financial leasing.。

Leasing companies do not provide direct loans to enterprises，Instead, we purchase machinery and equipment on behalf of users.，Substituting financing for financing。2． Separation of two rights and final transfer of ownership during the lease relationship，Only the transfer of use rights occurs；There are three ways to deal with lease expiration：return、Renew lease、Stay and buy。3． Pay rent in installments，Once the advance value-of-use contract comes into effect，The lessee obtains the right to use the equipment，so as to benefit the lessee。

Rent to be paid，will be repaid in installments during the lease term。4． Both trade、Investment function financial leasing is the integration of borrowing money and borrowing things，Has the dual characteristics of financing and trade。Leasing companies grasp the direction of use of funds through physical ownership，Become an attractive investment tool in the capital market。

(2) Main functions of financial leasing 1. The financing procedure is simple and the financing leasing method is repaid by the benefits generated by the project itself.，The funding provider retains only a limited interest in the project，Easy credit check procedure。2． Expand financing channels，Reduce capital costs and introduce advanced technology and equipment into production earlier，thereby achieving better economic benefits。Some rents can be included in costs and are tax-free，thereby reducing financing costs。

3． To prevent obsolescence and aging of equipment, leasing companies can decide whether to rent for short or long term according to their own needs.、Make favorable choices such as purchasing or returning，To prevent equipment from becoming obsolete and aging，Avoid equipment being idle。4． Avoid inflation losses，Guard against exchange rates、Interest rate risk: During inflation, the price of equipment will inevitably continue to rise.，The rent of finance lease is generally unchanged.，，To avoid exchange rate risks caused by devaluation。

For contracts with fixed interest rates，Avoid interest rate risks caused by interest rate fluctuations。5． Off-balance sheet financing does not affect the credit status of the company. Financial leasing is off-balance sheet financing.，Liabilities that are not reflected in the company's balance sheet。(3) Financial leasing risk management and identification of various risks during the leasing operation process、control and processing，Throughout the signing of the lease contract、order、transportation、From rent collection to internal operation and management, etc.。

1． Business risk management Business risk refers to the possibility of affecting the economic benefits of the parties due to business management factors.。For the lessee，Mainly manifested by poor management、Fund transfer failure、Delay or non-payment of rent occurs。before signing the contract，Be careful about the project、Scientific consultation and research，Specify constraints and responsibilities，Minimize risk。

2． Credit risk management Credit risk reflects the possibility of losses incurred by both parties to the lease due to the failure of the other party to perform the contract on time.。Mainly manifested in the lessor's inability to provide the lease subject matter on time and in good quality and quantity.，Affecting the lessee’s normal production and operations。The lessee is in the midst of technical negotiations and equipment inspection，Be detailed、Comprehensive understanding。

3． Market risk management Market risk refers to changes in market prices and demand due to，The risk that the expected economic benefits and residual value income of the leased property will not be realized。The lessee must conduct an in-depth study of the feasibility of the project，Conduct research and forecasts on similar products。4． Natural Disaster Risk ManagementNatural Disasters Including Wind Disasters、flood、lightning strike、Earthquakes, etc.。In addition to trying to prevent and rescue，For this risk, you can also purchase property insurance of different types from an insurance company.。

three、Leveraged buyout financing (1) The meaning and basic characteristics of leveraged buyout financing Leveraged buyout refers to obtaining control of the target enterprise mainly through debt financing，A method of corporate mergers and acquisitions that repays debt from the target company's cash flow。Use the assets of the acquired company as collateral，Raise some funds for acquisitions。Normally，Borrowed funds account for 85%~90% of the total acquisition funds，Others are divided into own funds。

Basic characteristics of leveraged buyout financing：1． The proportion of free funds used by acquisition companies for acquisitions is generally 10% to 15%。2． Most of the acquisition funds for the acquiring company are borrowed。3． The target will actually end up paying its selling price。4． In addition to investing very limited funds (own funds), the acquiring company，No obligation to invest further。

(2) 1. It has opened up a new financing method and only needs to invest a small amount of capital to obtain a larger amount of bank loans.，To acquire target companies。2． The acquirer only bears limited financial risks. Debt repayments arising from debt financing are borne by the target company.。In addition to investing very limited funds, the acquirer，No obligation to invest further。

3． On the one hand, it is conducive to enhancing the profitability of the acquirer.，Acquirers can benefit from leveraged buyouts；The other party can sometimes obtain unexpected asset appreciation by using leveraged buyouts.。(3) Risk control of leveraged buyout financing 1. Operating Risk Control Operating risk is the risk that the acquiring company will not be able to earn enough revenue to pay interest on its debt and other cash obligations.。The acquiring company must have a long-term development plan、Very good management level、Good product structure。

2． Market risk control Market risk refers to the lack of competition in the company after the acquisition

Advantages

，Low market share。The acquirer must conduct in-depth market research on the product，Make accurate market positioning，to consolidate and increase market share。3． Financial risk control Financial risk refers to the risk that the acquirer lacks sufficient cash flow to repay maturing debts.。The acquirer needs to pay attention to the period when repaying the acquisition liabilities.，No large funds for renovation。

The product should have a relatively stable market，Make the cash flow after the acquisition relatively stable。Conclusion：Every small and medium-sized enterprise faces financing since its establishment.，Financing will be provided throughout the establishment of the enterprise、growing up、stages of development and maturity。Usually accounts receivable financing is used in the growth stage of the enterprise，In the rapid development stage, financial leasing is used to expand production scale.，Leveraged buyout financing is an important way for enterprises to expand and grow in the mature stage and is the core of capital operations for small and medium-sized enterprises.。

Enterprises should use accounts receivable financing based on internal operating and management conditions and market competition.、Financial leasing and leveraged buyout financing。Every stage of an enterprise is inseparable from financing activities，Every successful financing activity of the enterprise，It will promote the enterprise to a higher level，Every leap forward development of an enterprise is inseparable from successful financing activities.。

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