Asset financing

Type

1.Short-term(uptooneyear)financing

Discountbyinvoice,oraccountreceivable/inventorycycleMainlyloan.Invoicediscounting:SMEssellpartoralloftheiraccountsreceivabletoassetfinancingproviderstoarbitragecash(usually60%-90%oftheinvoicevalue).Inthefuture,whenthefinancingproviderreceivesthepayment,itwillreturnthedifferencetothecompany.AccountsReceivable/InventoryRevolvingLoan:Arevolvingloanprovidedbythefinancingproviderbasedontheperiodicreportsontheaccountsreceivableandinventorysubmittedbytheloanapplicant.

2.Medium-term(onetothreeyears)financing

Mainlybasedonthecompany’sexistingunsecuredplantandproductionequipment,ininstallments,leases,Loanmoneybymeansofsaleandleaseback.

3.Long-term(threetosevenyears)financing

Long-termloansbasedonrealestateownedbyenterprises.

Features

Asacorporatefinancingmethoddifferentfromequityanddebt,assetfinancingiswidelyrecognized,mainlybasedonthefollowingfeatures:

1.Substitutingassetcreditfortheoverallcorporatecreditmayreducecorporatefinancingcosts

Whetheritisequityfinancingordebtfinancing,itdependsonthecompanyasawholeTherighttoclaimforfuturecashflowfromoperations.Theevaluationofwhetherthisclaimcanbefulfilleddependsonthecompany’soveralloperatingrisks.Therisksthemselvesarediverse.Themutualinfluenceofvariousfactorsandtheasymmetryofinformationmakeitpossibletoaccuratelyevaluatethevalueofthecompany.Impossible,investorsusuallyuseacertaindiscounttoavoidrisks,whichactuallyincreasesthecostofcorporatefinancing.Throughassetfinancing,theevaluationofassetvalueisrelativelyeasy,anditishelpfultoreduceassetdiscountscausedbyinformationasymmetry.Therefore,financingwithassetcreditratherthantheoverallcreditoftheenterprisemayreducefinancingcosts.

2.Ithasopenedupnewfinancingchannelsandrealizedthefulluseofthevalueofcorporateassets.

Thepurchasevaluealsocomesfromthediscountedvalueoftheexpectedfutureincomecreatedbytheasset.However,foralongtime,thesourceofthesecondtypeofvalueofassetshasnotbeenrecognized,whichactuallycausedthevalueofassetstobeidle.Byre-understandingthevalueofthesecondtypeofassets,itispossibletoopenupanewfinancingchannelforenterprises.Evenforthoseassetsthatdonotexistinphysicalform,suchaspatentrightsandmanagementrights,theycanbeusedasassetsforfinancing,thusrealizingthefulluseofthevalueofcorporateassets.

3.Assetfinancingrealizesoff-balance-sheetfinancing,whichisconducivetooptimizingthefinancialstructureoftheenterprise

Assetfinancingisdifferentfromtheoriginaluseofassets,suchasAsignificantdifferencebetweenmortgageorpledgefinancingisthatitisnotreflectedinthecorporatebalancesheet.Assetfinancingisonlyreflectedinchangesintheoriginalassetstructure,anddoesnotaffectliabilitiesandowner’sequity.Thisisforcertainliabilitiesandequityfinancing.Forrestrictedenterprises,off-balance-sheetfinancingundoubtedlyprovidesthemwithanewfinancingchannel.

Fees

Accordingtodifferentfinancingmethods,assetfinancingchargescanincludegeneralservicefeesandinterest.Insomecases,becauseassetfinancingdoesnotrequirecollateral,thechargemaybeslightlyhigherthanthatofordinarybankingservices.

Evaluation

Asacreditactivity,assetfinancingisbasedontwoaspects.Thefirstisthereplacementvaluecausedbythedirectavailabilityofassets;Thediscountedpresentvalueoffutureearnings.Theinitialuseofassetfinancingmainlyreliesonthereplacementvalueoftangibleassets.Withthedevelopmentoffinancialmarketsandtechnology,thevaluesourceofassetfinancinghasgraduallychangedfromtangibleassetreplacementvalue(calledthefirsttypeofassetvalue)tointangibleThediscountedvalueofexpectedearnings(calledthesecondtypeofassetvalue)expands.Forexample,acompanyownsacarasaphysicalasset.Itusedtobeabletoobtainfundsonlybysellingcars,butnowitcanfinanceonthebasisofthecashflowgeneratedbycaroperations.Withthischangeofthinking,avarietyofnewfinancingtechnologiesandmethodshaveemergedoneafteranother,suchasthe"riskisolation"technologydevelopedtoensuretheindependenceandstabilityoftheassetsthatgeneratetheexpectedcashflow;toensuretheachievabilityoftheexpectedcashflowAndthedevelopmentof"creditenhancement"technology,thesetechnologiesfinallybecamethestandardpracticeofthiskindoffinancing,andpromotedthefurtherstandardizationofassetfinancingasassetsecuritization.Asanadvancedformofassetfinancing,assetsecuritizationhasbroughtabouttheimprovementoftheentirefinancingtechnology."Securitizingyourdreams"hasbecomeatestamenttothewidespreadacceptanceofthisapproach.Thedevelopmentofassetfinancinghassatisfiedmanyfinancingneedsthatwerepreviouslyunsatisfactory,andthevalueofpreviouslyidleassetshasalsobeenfullyutilized,whichisundoubtedlyanimprovementinefficiencyfortheentiresociety.