Research On The Business Model Of Chinese Financial Leasing Industry

Financial leasing had become the third important financing tool for enterprises in the world, which is next to financing tools bank credit and securities. Financial leasing adheres to the actual industries, combining industrial capital and financial capital effectively. In recent years, our country attaches great importance to the financing issues of enterprises, especially the small and medium-sized enterprises. Financial leasing has lower threshold, less self-raised funds and more flexible tenancy. Financing leasing increasingly gets more attention and accepted by more and more enterprises.The emphasis of current domestic research of financing leasing stays on the stage of discussing the industry status of financing leasing, and research of business model is less. Based on the previous studies by former researchers, this paper further studies the financial leasing, including the economic utility of financial leasing, the status quo of China’s financial leasing industry, the business model of China’s financial leasing industry, the prospect of future China’s financial leasing industry with reference to American business model and domestic Far East Horizon Limited business model. This paper focuses on the study of feasibility of financial leasing industry business model which is based on bank credit. Contents of this paper mainly answered the following questions:the economic utility of financial leasing, the status quo and development space of China’s financial leasing industry, the business model of China’s financial leasing industry and its feasibility, the development proposals for China’s financial leasing industry. This paper aims to deepen the reader’s understanding of China’s financial leasing industry through this paper, contribute to finding a better solution to the existed problems of China’s financial leasing industry, promote the development of the whole industry. This article intends to let readers know financial leasing industry more comprehensively, find better solution to the problem of financing leasing in china, promote the development of the whole industry.The main innovation of this paper is demonstrating the feasibility of the financial leasing business model which is based on credit spreads, analyzing financial leasing enterprises’financing cost of bank credit, tenants’financing cost of bank credit, tenants’financing cost of financial leasing. As the capital of enterprises is heavily reliant on bank credit, this paper points out that financial leasing enterprises can take advantage its ability in managing capital and borrow money from banks, then transfer this advantage to small and medium-sized enterprises. This is beneficial to bank, small and medium-sized enterprise and financial leasing enterprises. This paper analysis the future business model of China’s financial leasing industry with reference to American financial leasing business model and the development of the domestic Far East Horizon Limited, such as lowering the credit financing costs, increasing spread income, strengthening professional management, increasing residual income and reducing entry barriers, enhancing business process supervision. On account of the arguments of regulation form option and the regulation level, this paper points out our country should insist institutional regulation form, lower the barriers to financial leasing industry entry and strengthen the supervision of business process.Due to the limited research level, the research method of this paper is not mature and the conclusion needs to be proved by practice. The fourth section puts emphasis on the business model of general financial leasing enterprises and its credit financing costs, not involving in bank leasing enterprises is the shortage of this paper. At the same time, the sample data used in this paper is comparatively little as the financial information of leasing enterprises is not so public and difficult to get, so there is only financing costs of Far East Horizon Limited. Furthermore, the selection and calculation of index are not mature too during the research of the feasibility of business model which relies on credit spreads, needing to be tested by practice.