Leasing’s explosive growth as an equipment finance option in China primarily has benefited multinational companies to date, a trend that Chinese regulatory authorities hope to counter by making leasing more accessible to small and mid-sized businesses, said Jonathan L. Fales, senior managing director of The Alta Group and chairman of the upcoming China Leasing Summit 2011.

“Most lease transactions in China involve large enterprises and big-ticket equipment such as ships and aircraft. These companies have no trouble finding lease financing, but it has been tough for the small and medium enterprises (SMEs),” said Fales, who is based in the U.S. and works closely with Alta’s Chinese offices to provide equipment leasing and finance consulting services to banks, leasing companies and equipment vendors.

“China does not have a credit market comparable to what we have in the west, with easy access to credit information. Normal due diligence often takes a week or longer, and banks and lessors obviously would rather spend that effort on a $30 million transaction than a $30,000 deal,” Fales explained.

As a result, China’s Central Bank Regulatory Commission (CBRC) has held conferences encouraging bank-owned lessors to lease to SMEs. The Ministry of Commerce (MOFCOM) has asked commerce bureaus and committees in Chinese provinces to carefully scrutinize local investments, Fales added.

In other industry developments, Fales noted: