What is the main difference between operating lease and financing lease?

The differences between financial leasing and operating leasing are as follows:

1, different functions

Financial leasing can enable enterprises to shorten the project construction period, effectively avoid market risks, and at the same time prevent enterprises from letting go of fleeting market opportunities due to insufficient funds. Operating lease enables enterprises to selectively lease assets that enterprises urgently need but do not want to own. In particular, equipment with high technical level and rapid upgrading is more suitable for operating lease.

2. These two judgment methods are different.

(1) In a sense, financial leasing is essentially a flexible way to purchase fixed assets by stages, but it is much higher than direct purchase.

(2) Different operating leases. It only transfers the right to use the assets, but the risks and rewards related to the ownership of the assets have not been transferred, and it still belongs to the lessor. The leasing enterprise only pays the relevant fees according to the contract, and the leased assets will be returned to the lessor by the leasing enterprise at the expiration of the lease term.

3. Different leasing procedures.

The leased equipment is selected by the leasing company according to the market needs, and then the leasing enterprise is sought, while the equipment for financial leasing is purchased by the leasing enterprise or directly selected by the leasing enterprise from the manufacturer or seller.

4. The lease term is different

The operating lease period is shorter than the effective use period of assets, while the financing lease period is longer, which is close to the effective use period of assets.

5. The responsible parties for equipment repair and maintenance are different.

The leasing company is responsible for operating the lease and the lessee is responsible for financing the lease.

6. Equipment disposal methods are different after the lease expires.

After the operating lease expires, the leased assets are recovered by the leasing company, while after the financial lease expires, the enterprise can keep them and purchase them at a little "nominal price" (equivalent to the market price of the residual value of the equipment).

7. The nature of leasing is different.

The essence of operating lease is not to transfer all risks and rewards related to asset ownership, while the essence of financial lease is to transfer all risks and rewards related to asset ownership to the lessee.

Extended data lease refers to the agreement that the lessor transfers the right to use assets to the lessee for lease within the agreed period.

Operating lease is an "incomplete payment" lease arranged to meet the needs of the lessee for temporary or seasonal use of assets. This is a pure traditional lease. The lessee leases assets only to meet the short-term, temporary or seasonal needs of the business, and has no intention of increasing assets.

Operating lease generally refers to all other forms of lease except financial lease. A lease whose remaining economic life is less than 25% of its estimated economic life on the lease start date is also regarded as an operating lease, regardless of whether it meets other conditions for financial leasing.

Maintenance lease

Commercial form

Operating lease is a leasing business in which the leasing department of a large production enterprise or a professional leasing company rents our products to users. The lessor generally owns its own leased goods warehouse, and once the lessee requests it, it can directly lease the equipment to the user for use. At the same time, the lessor can also provide maintenance services for the lessee.

The user pays the rent according to the lease and returns the equipment after the lease expires. This lease method is suitable for projects with short lease term and rapid technology update. During the lease period, the contract can be terminated and the equipment can be returned, but the rent is relatively high. In this way, in order to recover the investment of equipment and gain profits, the lessor has to rent the equipment several times in a row, so it is called "no liquidation" lease.

trait

(1) can be revoked. During the contract period, the lessee may terminate the contract and return the equipment to lease more advanced equipment;

Risk of operating lease

(2) insufficient payment. During the basic lease period, the lessor can only recover part of the prepaid funds of the equipment from the lease, and needs to lease the equipment to multiple lessees for use in the future to make up for the unrecovered part of the equipment investment and the profits that should be earned;

(3) The leasing institution not only provides financing facilities, but also provides professional services such as maintenance and management, and is responsible for the applicability and technical performance of the leased equipment, taking the risk of scrapping and buying insurance.

service function

Operating lease is a short-term lease business, which can be dissolved or not paid in full (financial lease cannot be dissolved at will). Its business features are as follows:

(1) The choice of the leased property is decided by the lessor;

(2) Leased items are generally general equipment or equipment with high technical content and fast updating speed;

(3) The purpose of leasing is mainly to use the equipment for a short time;

(4) The lessor not only provides the leased property, but also provides necessary services;

(5) The lessor always owns the ownership of the leased property and bears all relevant interests and risks;

(6) The lease term is short, and the contract can be terminated halfway;

(7) There are certain restrictions on the use of the leased property.

References:

Baidu encyclopedia: operating lease