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Beside traditional borrowing methods, businesses can choose financial leasing as an optimal option for long-term capital mobilization. Financial leasing does not require collateral assets and offers a high financing ratio, making it an attractive choice for businesses.

Financial leasing – a popular business model

According to Labor Newspaper, in developed countries, financial leasing is a popular business model. Compared to bank loan, the procedures for financial leasing are simpler as they do not require collateral assets. Additionally, leased assets in financial leasing are diverse, ranging from various types of vehicles to construction machinery, production lines, and modern equipment that are suitable for the business operations of enterprises

In particular, some financial leasing companies offer supplementary working capital loans to customers who engage in financial leasing. In the banking sector, using short-term capital for long-term lending remains a challenging issue for both banks and businesses. Therefore, the development of the financial leasing sector will be an important support in providing capital to businesses while reducing the burden on the banking system

Financial leasing does not require collateral assets

Compared to traditional borrowing, financial leasing has several outstanding advantages, one of which is not requiring collateral assets.

Collateral assets have long been referred to as the “lifebuoy” of bank credit, as small and medium-sized private enterprises often borrow through mortgage using primarily real estate. However, according to many economic experts, excessive reliance on collateral assets can result in a stagnant capital market, especially as there are increasing industries such as information technology or service sectors that do not have tangible collateral assets for development.

Meanwhile, when engaging in financial leasing, businesses are not required to provide collateral assets, and the capital mobilized through financial leasing can reach up to 100% of the asset value. In addition, the advantages of long-term capital mobilization through financial leasing include flexible lease terms, repayment options, and no impact on bank credit limits. Businesses can effectively utilize various sources of funding while maintaining their credit limits with banks.

Thao Nguyen

References

https://laodong.vn/kinh-doanh/giai-phap-go-von-trung-va-dai-han-cho-doanh-nghiep-1219686.ldohttps://vneconomy.vn/giai-phap-de-thi-truong-von-bot-le-thuoc-tai-san-bao-dam.htm