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Leasing Business
Lease products in the public transportation area
1. Product features
If companies in the public transportation area want to increase the number of vehicles or the related equipment (facilities) or increase investment, they may realize financing through lease.
2. Product profile
The company (the lessee) in the public transportation area chooses the vehicles and the related equipment (facilities) it intends to buy at first, settles the conditions such as specifications, quantity, price and so on and makes the application to China Huarong Financial Leasing (the lessor). The lessor will buy the equipment and lease the equipment to the lessee to use. The lessee may also use the vehicles or the related equipment (facilities) which it uses for business operation and are not mortgaged to make application to the lessor. The lessee may sell the vehicles and the related equipment (facilities) to the lessor at a reasonable price and then rent back the vehicles from the lessor through a lease agreement. During the lease term, the lessee pay rent to the lessor. After the expiration of the lease term, the vehicles belong to the lessee.
3. Applicable area
Purchase of vehicles and related equipment (facilities) for public transportation including urban public transportation, taxis, coaches and rail transportation in tier-1 and tier-2 cities and re-financing by using the above existing vehicles and related equipment (facilities).
4. Advantages and functions
(1)Whether buying new vehicles or sale and leaseback, the vehicles and the related equipment (facilities) are used by the lessee.
(2)The lessee may allocate the money to more urgently needed usage and it will be more flexible in finance. The lessee can get the price for selling the vehicles and the related equipment (facilities) through sale and leaseback, which can improve its asset liability structure and cash flow quickly, improve capital liquidity or increase investment.
(3)The professional operation, credit and many customer resources of the lessor will help the lessee get a more favorable price for the vehicles and the related equipment (facilities).
(4)The lease term can be extended to the longest before the end of the normal service and deprecation of the vehicles and the related equipment (facilities), which can relieve the rent payment pressure of the lessee. The rent payment of the lessee will be more compliable with the revenue on daily operation.
(5)The years of deprecation of the vehicles and the related equipment (facilities) during the lease term is flexible upon the negotiation of the lessor and the lessee. The lessee can use the rent to adjust its production cost, which will have a better tax saving or postponing result.
(6)After the lessee pays up the contracted rent, it will hold the ownership over the vehicles and the related equipment (facilities).
