Is it necessary for leasing companies to exist in leveraged leasing?

To tell the truth, leveraged leasing is not widely used in China, because our laws, regulations and economic environment are obviously different from other places, but we still say that leveraged leasing is meaningful.

In response to your question, I think the main reasons are as follows:

1. For banks, their own risks are greatly reduced by cooperating with leasing companies, because most of the risks are transferred to leasing companies.

2. If the bank lends itself, the lessee's qualification may not meet the bank's credit requirements, or the amount may exceed the credit line. At this time, the business operation can only be carried out through the leasing company, which is equivalent to granting credit to the leasing company.

3. According to different categories, leasing companies can enjoy different financial leverage ratios, and the lowest in China is 10, which can further expand the total business volume and continue to cooperate with many banks to maximize the leverage effect.

4. Leveraged leasing often involves a lot of business. Simple mortgage loans or other forms of loans, most of the time can not meet the requirements, which requires the lessee's enterprise to have a large number of fixed assets.

In fact, many leasing companies in China are doing factoring business now. Simply put, they also get funds from banks, especially the mode of factoring loans first and then buying leased properties (this mode is not common). Isn't it more similar?

6. In many cases, the financial tax of the lessee will change due to the different ways of obtaining funds. For example, some leased goods and certain industries can gain more financial advantages through the bills provided by financial leasing companies (take a closer look at the tax regulations after the reform of the camp).

7. By the way, because you haven't restricted the leasing of properties, I remember that some industries and leased properties can also enjoy national or local policy subsidies according to the different purchase methods. The simplest thing is to understand financial leasing and agricultural machinery subsidies.

I don't agree with what you said about "paying a fee to a leasing company that gets something for nothing", but I don't want to say anything more. Anyway, you are definitely not from the leasing company, hahahaha.

The simplest truth is that if this happens, then the leasing company must have played an indispensable role, right?