What's the difference between leaseback and mortgage?

Financing leaseback and equipment mortgage loan are very similar financing tools.

Before China's "Contract Law" did not use a special chapter to regulate financial leasing, many cases had diametrically opposite understandings of its similarities and differences (for example, leaseback was judged as a mortgage loan). Today, many bank credit workers and guarantee practitioners still

We can't fully understand the difference between the two, which objectively hinders the promotion of the commercial operation of the project (mistakenly thinking that the leasing company changed hands to loan sharks after obtaining loans from the bank).

The difference between leaseback and equipment mortgage loan;

First, different legal relations

There are two contracts and three parties to establish a lease (including sale and leaseback) relationship. Namely purchase and lease contracts,

It involves suppliers, lessors and lessees (in leaseback business, lessees and suppliers are the same person). In the whole transaction process, the lessor has the most comprehensive participation and the most links. The credit relationship is simpler, with only one contract (loan contract) and two parties (borrower and lender).

Second, the cash flow is different.

At the beginning of the lease, the lessor first pays the loan to the supplier, purchases the leased property (only purchases the leased property from the lessee in the leaseback business), and obtains the property right. In the lease relationship, there is only logistics (delivery of the leased property), and there is no cash outflow.

At the beginning of the credit business, the creditor will flow out the real cash to the debtor's friends. Only in the process of recovering the creditor's rights, the creditor's cash flow of lease and credit is the same in nature, that is, they are both positive cash flow people.

Third, the difference of the transfer target.

Financial leasing and credit have the same term, and the right to use the subject matter is sold at a price. However, leasing is a thing (mostly tangible machinery and equipment), and credit is a cash transfer.

4. The owner of the leased property is different from the owner of the mortgaged property.

The ownership of the leased property belongs to the creditor (lessor). Although the leased object is in the hands of the lessee before and during the lease period, it has transferred the ownership of the property to the lessor through the sale, and the lessee enjoys the right to use the equipment only because of the lease relationship. However, the ownership of the loan collateral (the right to use the machine) still belongs to the original owner (that is, the mortgagor, usually the lender), and the mortgage only enables the creditor to enjoy the priority of compensation for the item, and the ownership during the mortgage period does not belong to the creditor, but belongs to the debtor.

Five, accounting is different

The mortgaged object is now on the balance sheet of the mortgagor (usually the debtor), and the mortgagor accrues depreciation and manages assets. Financial lease items are reflected in the balance sheet of the lessee (debtor), and depreciation is accrued by the lessee, and the lessor and the lessee jointly manage the assets; Operating lease items are reflected in the balance sheet of the lessor (creditor), and the lessor accrues depreciation and manages assets.

Intransitive verbs have different sources of repayment funds and taxes.

The rental fee is directly regarded as operating expenses and included in the cost. The sources of funds for repayment of loans can only be depreciation and after-tax profits.

Therefore, when the loan of one yuan is returned, the cash outflow of the enterprise is actually one yuan more, and the extra part is the corresponding business tax and income tax of one yuan after tax. It is precisely because of the different accounting treatment methods of leasing and leasing that leasing has the function of delaying payment (income tax).

Seven, the disposal procedures are different.

If the lessee breaches the contract (fails to pay the rent), the lessor may terminate the lease relationship and go directly to the leased property. If the lender defaults (does not repay the loan), the creditor will get collateral to pay off the debt. As long as the debtor has any objection, it must go through litigation procedures before the collateral can be disposed of.

Eight, the lease item and collateral after the loss of treatment is different.

In addition to the loss and insurance liability of the leased property, the lessor may hold the lessee responsible for good management. If the collateral is lost, the creditor may require the debtor to re-establish the mortgage or guarantee, otherwise the loan relationship may be suspended and the creditor's rights may be recovered.