The biggest advantage of finance lease is that it has other financial institutions such as banks do not have the expertise, provide added value to the lessee finance leases. It works using the right machinery and equipment, and transfer of usufruct rights optimal allocation, managed separately, so that stakeholders can work together to take risks and control responsibilities and achieve win-win cooperation.
Finance lease, the new financial tools and marketing tools are gradually changing the development mode of construction machinery industry. It originated from the
Business model innovation
Business model innovation is to use different ways to meet the needs of the various stakeholders. Property can be divided into the right to use and transfer of usufruct rights. Since it is a series of rights, if you assign the rights to their different needs most stakeholders, can greatly increase the total value of the transaction. In fact, the business model is formed by the decomposition of property rights, is the use of the same rights assigned to different transaction value and transaction costs of different stakeholders generated. If some of the stakeholders to the advantage of this right to the limit, we can produce the maximum value of the transaction.
Construction Machinery Financial Leasing took advantage of this business model, which utilizes co-lessee will use the right engineering machinery and equipment, as well as the transfer of usufruct rights managed separately, the lessee to pay royalties, lease property protection; lessor and transfer of usufruct rights has gradually recovered funds, risk-sharing and control responsibilities, to obtain a reasonable profit and achieve win-win cooperation. From the point of view of property rights in the ownership of the machinery and equipment lease financing remains belong to leasing companies, so when the tenant can not pay the rent according to the contract, the lessor may recover immediately turn leased equipment leased to other tenants, in addition to the current rental income being outer loss, almost no other losses. And according to the law, when the lessee bankruptcy, the lease does not belong to the estate lessee, the lessor may recover by law. On the other hand, because the lessor may immediately withdraw the lease when the tenant can not pay the rent, the tenant is bound to make reasonable arrangements for funding, making the rent can be paid according to the contract.
Finance leases, as the name suggests is to provide financing to businesses, it is essentially a way of financing and bank credit no essential difference. Due to the high value of construction machinery, construction enterprises purchase of equipment would take a lot of money, but the payback period has to for a long time, although you can buy equipment through a bank loan, but bank lending restrictions are more funds available for a long time, hinder the construction business purchases of equipment. The value of finance lease is the ability to pay the sustainability of future cash flows of the lessee, so the payment method does not need to pay huge sums of money can be obtained once the right to use large equipment, this way more and more SMEs favor in the market attractive. When the lease expires, the lessee has the option to purchase, on the lessee flexibility is also strengthened. Also, the rental equipment is not as liabilities appear in the user's balance sheet, assets and liabilities caused by the refinancing problems can be effectively improved, enhanced ability to borrow lessee, saving additional funds for other uses. Therefore, in terms of the lessee, the biggest feature is the finance lease financing, so that users can use a small amount of money to obtain and use the device, the device through proceeds to repay rent, eventually you can also choose whether to fully own the equipment. Department of finance leasing companies to provide users with commercial credit companies, representing banks, credit programs generally simple to obtain funds through such financing more quickly.
Vendor finance leasing companies for tenant-based, it is a good marketing tool. The biggest advantage of vendor-based finance lease is that it has other financial institutions such as banks do not have the expertise, provide added value to the lessee finance leases. For example, United has a financial leasing company as a vendor leasing company background, not only in financing equipment saves customers time and cost, and its parent company - Zoomlion Heavy Industry is a professional large-scale machinery and equipment manufacturers, in when the customer can select a device to provide professional guidance to help customers choose the most consistent with the requirements of its production equipment. Vanda financial leasing company can also produce according to the customer's time characteristics, customized repayment plan, so that the expected future cash flows and adapt, to a certain extent, played a role in asset management.
Finance lease only in the down payment greatly reduces the pressure on the enterprise funds, on a subsequent payment of funding, financing companies can continue to achieve innovation in a big fuss. For example, in some alpine areas of construction, every year face downtime longer, sometimes up to three or four months, the monthly rent is not realistic, Liugong finance leasing companies from the user's actual needs, innovation out also rent a new way, in total payments under the same premise, the number of construction companies can be repayment within one year by 12 times reduced to eight times, so you can stagger the downtime, only sufficient funds 8 months of repayment. This method of repayment of construction enterprises have changed the situation for four months with no income prepared in advance appropriate funding, increased the number of construction enterprises capital flows, conducive to the smooth construction of the construction business.
Good flower green leaves also help
Even the best model, also need to have excellent professional and technical capacity, good security system and risk control measures as support. Financial leasing industry, there is a saying: "the banking system is not short of money, not lack of market makers department, independent leasing companies are missing." Engineering machinery manufacturers to establish their own financial leasing is not only a powerful promotional tool, but also an important profit sources. In recent years, Caterpillar Financial Services Corporation penetration continues to rise, we can see that about 80% of its equipment is realized through the financial services company, and its contribution to the net profit is very large, accounting for about 20%. In the
Caterpillar was founded in 1981 a wholly-owned subsidiary, "Caterpillar Finance Corporation," 1983 began formal provision of financial services, including for customers to buy their products to provide equipment financing services (retail financial services), as well as Caterpillar distributors provide product receivables or inventory financing (wholesale financial services). Compared with the traditional "banking system" or "independent line" equipment finance companies, financial leasing companies vendor lines of its ability to play in the professional area. Engineering machinery and equipment as a means of production, which inevitably arise in the course of loss in value, which leads to the need to re-estimate the value of the product. Professional engineering machinery, if not to solve this problem is more difficult. As the saying goes, "buy sell fine." Unfortunately, at present only able to conduct such operations Caterpillar, because of its design from the initial stage to take a re-manufactured into the favor remanufacturing process and technology.
Equipment manufacturers will re-evaluate the lease expires, then their rent or sell, vendors can use the device again profitable, leased or used by businesses will also get benefits. So, in addition to supporting the remanufacturing process and technology level, but also inseparable from Caterpillar used equipment certification system. Buy used equipment, the biggest problem is to dispel the customers due to the purchase of second-hand equipment and feel concerns. Caterpillar personnel specially organized to promote their used equipment certification by the classification established a credible assessment of the value of the benchmark, significantly reducing transaction risks. Caterpillar finance company with a strong industrial sector equipment maintenance, refurbishment, certification and re-distribution service capabilities, reduce equipment in the course of the decay rate, as much as possible to increase its value, in order to manage risk throughout the financing process. By providing engineering machinery related financial services, the use of industry-led Caterpillar to rely on financial and nurturing industry wheel driven model eventually became the world's largest construction equipment manufacturer.
Since the finance lease is a financial tool, then there must be some financial risk, its essence is non-financial activities of financial institutions. The biggest risk is the lessee lessor ability to pay on time, which directly affects the leasing company's operating performance and survival; coupled with a wide range of construction machinery and equipment, customized for different devices require different financing lease program, so the risk is greatly enhanced. XCMG financial leasing business development, in addition to conventional crane projects, to further expand the business scope, the excavators, heavy trucks and truck rental, also included in the range, which also expanded the risk of an increase in revenue, while a test XCMG risk prevention capability. XCMG on three basic elements of finance lease very seriously: one client assets, credit and operational capacity; Second specification when implementing finance lease; third is to control the early risk.
With the further development of