Understanding Finance from scratch

Chapter 32 What to do when you are short of money, how to become a master of capital operation - learn some financing knowledge every day (3)
Financial leasing, as a very common financing tool in mature capital market countries and banks and listing financing, has become a very important and effective means for a large number of enterprises to achieve financing, and to a certain extent reduces the difficulty of financing for small and medium-sized enterprises.At the same time, the combination of financial leasing and other financial instruments such as creditor's rights, equity and trusts has produced a large number of financial innovations.At present, nearly 1/3 of the world's investment is completed through financial leasing. In the United States, 31.1% of the fixed asset investment quota is realized by leasing, the proportion in Canada is 20.2%, and the proportion in the United Kingdom is 15.3%.

Several key elements that constitute a financial lease are the subject of the lessee, the subject of the lessor, the term, and the subject matter of the lease.With the development of the market and the diversity of demands, the forms of financial leasing have become rich and diverse, and many new types of leasing services have emerged, such as leaseback, entrusted leasing, sub-leasing, synthetic leasing, and risk leasing. There are no more than two basic models, one is that the lessor purchases the subject matter and hands it over to the lessee for use, and the other is that the funds for purchasing the subject matter are handed over to the lessee in a manner similar to an entrusted loan, and the lessor Purchase a given subject matter.The basic feature of financing through financial leasing is that the ultimate goal of the lessee is to obtain the ownership of the subject matter. Therefore, from the perspective of term and amount, the lease term is usually close to the service life of the subject matter.In a relatively mature financial leasing market, this period is generally defined as 75% of the service life of the equipment, and from the perspective of the total amount of rent, it will also be close to the purchase price of the subject matter, usually defined as 90% of the purchase price, or both parties It is agreed that the lessee will obtain the ownership of the subject matter in some way after the expiration of the term.

The scope of financial leasing is also very wide. For enterprises, it can be applied to factories, equipment, transportation tools, even software and information systems. Whether it is a large state-owned enterprise, a hospital, or a small and medium-sized enterprise, financial leasing can be adopted. Way.

At the same time, financial leasing also has the following characteristics: first, it can obtain full financing; second, it can save capital investment; third, it does not require additional mortgages and guarantees; fourth, it can reduce the cash flow of enterprises Fifth, it can play a certain role in tax avoidance; sixth, in a sense, it can be used as a substitute for long-term loans.

But at the same time, financial leasing inevitably has its own limitations. Whether it is at home or abroad, the total demand it can meet is limited. At the same time, it also has relatively strong risk-return characteristics and industry orientation.From the point of view of the total volume, the current domestic financial leasing industry is relatively focused on medical care and public utilities, but the leasing services for small and medium-sized enterprises are also gradually increasing; there are also some rigid indicators for assets and operating conditions in terms of enterprise scale. .

Financial leasing companies have a set of strict review procedures: first, they will fully assess the risks of the company and its financing projects; second, it is a judgment on the profitability of the project, which is related to the rent or interest rate charged by the leasing company and the lease term There is a close relationship, and the total cost of financial leasing is usually higher than the bank loan interest rate of the same period; finally, from the perspective of financial leasing risk control, there are strict requirements for the subject matter, usually concentrated in certain mortgage significance and realizable For equipment, plant and other items, some leasing companies also limit the subject matter to specific industries and application fields.In addition, as a financier or lessee, a certain amount of security deposit is required, which is equivalent to about 20% of the total financing amount.

Financing is not only a technology, but also an art. For financing companies, there are two most important things: first, to recognize themselves and define their own positioning; second, to combine their own positioning and find An appropriate financial instrument or combination of financial instruments.In the financing positioning and implementation process, the participation and assistance of professional institutions will be more effective.

Use pawns skillfully to let assets flow

In a pawn shop, Mr. Li is sorting out his pawn information.He has two properties as pawns, with a total market value of about 100 million yuan. Now he urgently needs some funds for the capital turnover of his own business.According to the appraised price, his real estate can be loaned up to 80 yuan.Mr. Li is from Zhejiang and is used to industrial investment.Later, by chance, he met a friend who was good at stock trading. At that time, his own industrial investment was also facing great competition pressure, but he could try his hand at the stock market. Earned 1 yuan.If you invest more money, you will be lucky, and you will earn less if you don’t lose.Mr. Li decided to devote himself to stock investment in August, and quickly invested more than 2 yuan in the stock market.But he suffered from the fact that he had no money to buy stocks when the market was good, and watched the stocks rise helplessly; and when the long-term favorable stocks fell, he could not cover his positions at a low price because he had no money.Facing lack of money, he was thinking of trying a pawn shop, and he succeeded in obtaining a loan of 8 yuan.

Whether it is an individual or a business, pawning is a relatively good way of financing.
Everyone is familiar with pawning. After all, pawning has existed for hundreds of thousands of years, but pawning has also been criticized, accused and suppressed by people, and has been treated unfairly for a long time. This situation must be gradually changed.

There are indeed many problems with the old-style pawns, and the image is very bad, which has caused a very serious negative impact on the society.For example, the small amount of pawn, the short period of pawn, the high interest rate of pawn, and the malicious operation of pawn shops have been quite disgusted by people in the past dynasties.

First, the pawn legislation of countries and regions in the world makes the legal interest rate of pawn very high.

For example, in western countries, the high legal interest rate of pawns is a common phenomenon.As early as in the "Pawnbrokers Act of 1872" in the United Kingdom, the highest monthly interest rate for pawns is about 2.08%, and the modern market-oriented interest rate of pawns currently implemented in the country has climbed to the level of 4% to 6% per month.From the perspective of the United States, the country can be regarded as the country with the highest legal interest rate of pawn in the world. In 1812, the New York City Council passed a law, stipulating that the annual interest rate of pawns was 25%, and the annual interest rate of pawns was only 25% only if the pawn amount was less than $7. In 1910, 17 states in the United States promulgated pawn laws, respectively stipulating the statutory interest rates of pawns, the highest of which was 10% in New Mexico and 8% in Delaware.The lowest is Arizona, which also reached 4%.By the 20s, all states in the United States had amended their pawn laws one after another. Among them, the state with the highest legal interest rate for pawns actually reached 90% per month, or 25% per year, which is jaw-dropping.

Second, pawnbrokers operate maliciously in practice, raising the capital price of pawn loans in disguise.

This is most evident in the development history of China's pawnbroking industry.For example, false origin Ashikaga is the most typical malicious operation.According to this method, when the pawn shop pays the pawn, it will discount the money first, and not give the real amount.For example, the pawnbroker should get 10 yuan in pawn money, but the pawn shop only pays 9 yuan, which is called "nine deductions".However, when the pawnbroker comes to redeem, the pawnshop charges the principal and interest at 10 yuan.In this example, if the monthly interest is 3 cents, the monthly interest of 10 yuan should be 3 cents, and the annual interest is 3.6 yuan, plus the principal of 10 yuan, a total of 13.6 yuan, so it is called "nine out and thirteen returns".Because it is a false capital, the pawnbroker's pawnbroker's gold is 9 yuan, and the net interest is 4.6 yuan, so the annual interest rate is as high as 51%.Among them, 1 yuan has not been loaned out, which is purely earning interest without capital.It can be seen that some pawnshops use this method of paying out money in full to make profits, and plunder the pawnbrokers.In the old society, there were also shady things such as "eight for ten", "ninety-eight out, full money in", etc., all of which were tricks of pawn shops.These undoubtedly make the social image of pawns inevitably suffer serious damage.As can be seen above, the high capital price of pawns is at least one of the reasons why it is difficult for them to integrate into the mainstream financing channels of a country.

The negative side of pawning has been constantly criticized by people, but the positive side of pawning is little known and has not received the attention of public opinion.For example, the earliest pawn shops in Europe appeared entirely as charities. In the 15s, the Franciscans in the Catholic Church system took the lead in establishing the non-profit "Public Pawnshop", also translated as "The Mercy Bank", which was a purely public welfare and charitable social relief organization.The purpose is to fight against the increasingly rampant usury in the society by issuing interest-free pledge loans to the vast number of urban and rural handicraftsmen and the poor.This type of pawnshop only needs to repay the principal when the pawnbroker matures, and then gradually transitions to the stage of issuing low-interest pledge loans. In the middle and late 60th century, municipal institutions such as Vienna in Austria and Paris in France also followed suit and opened public welfare pawnshops run by government organizations, which have continued to this day. In the mid-18th century, even in the United States, some charitable pawn organizations of this kind appeared one after another.No wonder Marx clearly pointed out in "Das Kapital": "Here, let's not talk about things like public pawnshops. That is an anti-usury measure... intended to protect the poor under usury." However, although the pawnshop industry It had its own brilliance in history, but due to its bad performance and more dark sides, its reputation has always been poor. As a result, there are still quite a few people who have no or half-knowledge about pawn, only knowing its bad , I don’t know its benefits, especially I don’t know its positive impact and positive role in modern society as a special financing method.This situation naturally causes some people to be biased in their understanding and philosophy.

In any case, the above understandings and concepts are obviously outdated.Modern pawning means that the pawnbroker pledges its movable property and property rights as pawns or its real estate as pawns to the pawnshop, pays a certain percentage of fees, obtains the pawn, pays the pawn interest and repays the pawn within the agreed time limit. , The act of redeeming the pawn.Pawn shops have two basic functions: financing services and commodity sales services.

For us, modern pawn is just a convenient and quick financing method, and its original characteristics do not necessarily constitute its own essential defects, such as the small amount, short-term nature and high interest of pawn.On the contrary, these characteristics are precisely some competitive advantages of pawn financing compared with other financing methods.

The range of mortgages and pledges generally accepted by pawnshops includes gold and silver jewelry, antique jewelry, household appliances, motor vehicles, means of living, means of production, commodity real estate, securities, etc. object range.At the same time, we should also notice some differences in the process of indirect financing between banks and pawnbrokers.

Although both are fund intermediaries for indirect financing, banks have more extensive sources of funds and have a huge liability business. They mainly accumulate funds by absorbing public deposits, and then use these funds to engage in asset business.On the other hand, pawnshops have relatively narrow sources of funds, and their debt management business is small. They mainly accumulate funds through capital increase and share expansion and a small amount of loans from financial institutions, and then use these funds to engage in asset business.This shows that in the process of indirect financing, banks and other financial institutions are the main force, while pawnshops only play the role of picking up the leftovers.However, both are currency operators in a country's capital market, that is, the short-term financial market. Each has its own unique market positioning and occupies different market shares.

(End of this chapter)