ICBC Financial Leasing Co. Ltd. ：“Easy-leasing” promotes the development of small medium enterprises

Company Profile
ICBC Financial Leasing Co. Ltd., ICBC Leasing for short, was founded in December 2007. The company, approved by the State Council as a pilot business and subsequently approved by the China Banking Regulatory Commission, is the first financial leasing company affiliated with a bank in China. Currently with 11 billion yuan of registered capital, ICBC Leasing is a wholly-owned subsidiary of ICBC.
Focusing on the leasing market of aircraft and vessels, we have also made efforts to develop the Big Equipment market in key fields such as energy and power, rail transport and construction machinery and offered many financial and industrial services including equipment leasing, rent transfer, investment funds, investment asset securitization, transaction in assets and asset management. After seven years of development, ICBC Leasing has become the most innovative, profitable and market-leading company in China, as well as having the largest asset base. By the end of 2014, the total assets of ICBC Leasing stood at 256 billion yuan domestically and outside China. Its market share, asset size, return on capital, operating income and the total profit of the company rank the first in the whole industry.
Challenges
As the main force of national economic development, small medium enterprises play an important role in stabilizing growth, creating jobs, promoting innovation, prospering the market and meeting people’s needs. The small medium enterprises generally have problems of high asset-liability ratio, unsound financial system and low corporate credit. Banks have high requirements for the loans of small medium enterprises, so it is often with complicated mortgage procedures and limited approval authority. Moreover, China is lack of relevant laws and supporting policies for small medium enterprises financing. All of these lead to the difficulty in financing and credit, which hinders the development of small medium enterprises.
ICBC Leasing has strengthened the SME leasing business since 2010, and has made it become the strategic requirement for market competitiveness and sustainable development. , To explore a financial leasing model for SME and dig out the market potential of SME is the urgent challenge that ICBC Leasing needs to deal with.
Solutions
As the leader of Chinese financial leasing, ICBC Leasing released “Easy-leasing”, exclusively serving small medium enterprises. the ICBC Leasing buys some new equipment or enterprises owned equipment from suppliers according to the requirements of small medium enterprises, , and then, rents to the enterprises according to the contract , providing financing support for small medium enterprises to buy advanced equipment and make technical transformation .. Because of the ownership of the leased asset, ICBC Leasing can overcome the SME credit risk and the difficulty in identifying, controlling and preventing, effectively helping the small medium enterprises to solve the problems in financing and credit.
Linkage Mechanism with Wide Coverage
The “Easy-leasing” business model of ICBC Leasing can totally take advantage of ICBC network and set up a linkage mechanism between banks and leasing companies. The company can entrust ICBC branches to do investigations before financing for small medium enterprises, which not only improves the financing efficiency but also provides convenience for small medium enterprises. The linkage mechanism between ICBC Leasing and ICBC makes “Easy-leasing” cover most parts of China, so small medium enterprises can perform transaction in the regions that have ICBC branches.
Innovative Leasing Model
Easy-leasing includes two leasing models which are SME Equipment Leasing and Manufacturer Equipment Leasing. Since many small medium enterprises have not enough money to afford technical equipment, the large equipment market was disrupted. To help these manufacturers, ICBC leasing finds the clients who have needs but no money, then, guaranteed by large manufacturers, provides financing leasing for those small medium enterprises to make them can buy construction machinery and other equipment produced by large manufacturers more easily. This can strengthen the cooperation between small medium enterprises and large manufacturers, promote the vertical or horizontal cooperation between both sides, optimize the industrial economic relations and realize the risk-sharing within the industrial economy.
Flexible Financing Terms
The business process of “Easy-leasing” is comparatively easy and has fewer requirements. Some small enterprises were established newly, so they lack credit records and mortgage. It is hard for them to adapt the credit business. However, “Easy-leasing” focuses more on the asset quality and management capacity of companies. The small medium enterprises, requiring for equipment lease financing, can apply to ICBC branches, and then the ICBC branch will investigate the management capacity and asset quality of the small medium enterprises. After the investigation and recommendation, the ICBC Leasing can make approve of the companies and  make them buy the equipment.
Reasonable Price Advantage
There is a new product innovation in ICBC Leasing that all the equipment that has strong versatility, stable market value and stable use value can be the lease. This satisfies the diverse equipment financing needs of small medium enterprises. What is more important is that ICBC Leasing fully considers the hardship of small medium enterprises, designs in rent payment according to the actual operating cycle and effectively reduces the repayment pressure and financial burden for small medium enterprises.
Achievement
By the end of 2014, ICBC Leasing has already offered 8.192 billion of equipment financing leasing to over 200 small medium enterprises in more than 20 provinces, involving more than 10 industries such as construction, machinery manufacture, textile, printing, package and food. This provides important financing support for small medium enterprises to buy advanced equipment and further make technical transformation and effectively solves the financing problems in fixed asset investment for them. By “Easy-leasing”, small medium enterprises use new technologies, crafts and equipment to realize the rapid transformation and upgrade of enterprise and improve business productive efficiency.
Due to the “Easy-leasing”, ICBC Leasing has expanded the size of its market, optimized the asset structure and improved the management level of lease and income level. “Easy-leasing” got the Outstanding SME Service Product Award in 2011 and Top Ten Financial Products Marketing Award in 2012.
Prospect
China’s economic development and reform have entered a new stage. Financing leasing will also develop rapidly with the reform of economy and finance. As the tie connecting finance and industry, financing leasing will keep on providing strong capital support for the transformation and upgrade of our economy, offer better service to SME financing and contribute to the development of China’s economy.