HENGFENG

It refers to the transaction in which the lessor purchases the leased object from the seller and provides it to the lessee according to the lessee’s choice of the seller and the leased object, and charges the rental fee from the lessee. On the premise that the lessor retains the ownership of the leased property and charges the rental fee, the lessee obtains the rights for possessing and using the leased object and for making profits from it during the term of the lease contract. This is one of the most typical means of Financial Leasing.

Rent-sharing leasing is a new leasing form, which combines certain characteristics of investment. The discussion about the level of the rent between the leasing company and the lessee is not based on the fixed or floating interest rates, but on the yields related to the leased equipment or the gains of the enterprise related to the leased equipment. If the equipment is frequently used or the company’s gains related to the lease equipment are high, the rent will be high; otherwise it will be low. The rent in this leasing mode is called “contingent rental”.

Leveraged lease is basically a form of tax-cut leasing. The lessor invests 20% -40% of the total purchase price of the leased object, and most of the remaining fund is loaned from the bank in the name of the lessor, to buy the leased object and lease it to the lessee. The lessor is required to use the leased property as the mortgage and transfer the related equities to the lender. 　　This form of leasing is more complicated in structure; however, the benefits are that the lessor can both have the ownership of the leased property and enjoy the same tax benefits as he can obtain if he fully invests in the leased property; in addition, part the benefits of tax cut are transferred to the lessee through reducing the rental fee; therefore the lessee can bear lower financing cost than otherwise. 　　Leveraged lease metaphorically uses the lever principle in physics, that is, a heavy object can be lifted with less force by making use of a fulcrum and a long arm. In leveraged lease, the leasing part is the lever, and by means of the leverage function of finance, and by taking full advantage of the tax benefits of local country of the lessor, the parties of the transaction, especially the lessor, the lessee and the lender, can obtain more economic benefits than common leasing modes. Leveraged lease is generally suitable for aircraft leasing and other leasing items of larger monetary values.

In the entrusted leasing, the lessor accepts the funds or the subject matter of leasing from the trustor and goes through the leasing business with the lessee designated by the trustor according to the written authorization of the trustor. The ownership of the leased object belongs to the trustor, while the leaser only charges the rental fee, but does not take the risks. As a trustee and a nominal lessor, the leasing company is mainly responsible for investigations and recommendations for lessees, the specific operating of leasing projects and the long-term tracking and management of leasing projects. This investment mode provides a new way of investment for clients with spare money or idle equipment.

Leaseback refers to the leasing form in which the lessee sells their own objects to the lessor, and enters into a lease contract with the lessor, and then leases the object back from the lessor. The leaseback service is a special leasing method in which the lessee and the seller is the same person. Such a method is conductive for enterprises to realize their existing assets. It can also be used to raise equity capitals and funds for mergers, acquisitions and so on.

It is a form of lease corresponding to “financing lease”. Precisely speaking, it is a form of leasing in which the risks and returns related to the leased object are borne by the lessor. Enterprises adopting this form of leasing do not seek to possess the ultimate ownership of the property, and the leased property is not presented as the fixed assets of the company in its financial statements. If an enterprise wants to avoid risks related to the equipment, or it needs the off-balance-sheet financing, or it needs to make use of some tax policies, it is willing to adopt the operating leasing.