Research on Determination Method of Financing Lease Margin Money Based on Default Risk

Abstract

This article firstly analyzes the lessor's default risk and necessity of reasonably determining margin money in financing lease, then expounds the method to measure default risk by probability of default, and establishes the model to calculate net profit and model to calculate margin money based on default risk. Finally, a numerical example is used to test the model. The results show that the application of the model can quantify default risk into the lessor's net profit, so as to make it possible to calculate the loss at different levels of default risk, which will provide an effective basis of decision-making for the lessor to quantitatively and reasonably determine margin money.