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Lease products in the medical and health area

1. Product features

The medical institution wants to buy new medical equipment but does not have enough capital or does not want to pay the money in a lump sum, or wants to sell the medical equipment it owns and then rent it back to get mid-to-long-term financing in order to improve financial structure. The medical equipment manufacturer wants to increase sales through financial lease.

2. Product profile

According to different demands, there are three products, direct lease, sale and leaseback and manufacturer lease, to choose from. During the lease term of the three products, the lessee pays rent to the lessor. After the expiration of the lease term, the equipment belongs to the lessee.

Direct lease product: The medical institution (the lessee) chooses the equipment it intends to buy at first, settles the conditions such as specifications, model, quantity, price and so on and makes the application to China Huarong Financial Leasing (the lessor). The lessor will buy the equipment and lease the equipment to the lessee to use.

Sale and lease back product: The medical institution (the lessee) uses the medical equipment it owns to make application to China Huarong Financial Leasing (the lessor) and sell the equipment to the lessor at a reasonable price agreed by both parties. Then the lessee will sign a financial leasing contract to rent the equipment back.

Manufacturer lease product: The medical equipment manufacturer establishes strategic partnership with China Huarong Financial Leasing (the lessor). The manufacturer recommends equipment buyer (the lessee) to the lessor. The lessor will pay the price for the equipment and provide financial leasing to the lessee recommended by the manufacturer. The manufacturer provides guarantee or equipment buy-back for the lease project and does follow-up equipment asset management. 

3. Applicable area

Various moderate-sized public or joint-stock medical institutions want to buy new medical equipment or use existing equipment to raise money, improve asset liability structure or cash flow structure, or medical equipment manufacturer want to increase sales and collect payment quickly.

4. Advantages and functions

(1)The lessee chooses equipment by itself and is supported by the lessor which runs financial leasing business in the medical and health area. The commercial condition is more favorable.

(2)Whether direct lease, sale and leaseback or manufacturer lease, the equipment is used by the lessee normally.

(3)In the form of direct lease, the lessee can use the money previously used to buy the equipment in the operation of other business or project investment. The lessee will have more flexible finance.

(4)In the form of sale and leaseback, the lessor pays the equipment selling price in lump sum. The lessee can get the capital needed to activate its existing assets, improve asset liability structure and cash flow structure, resolve capital liquidity problem and increase investment.

(5)In the form of manufacturer lease, it will help the manufacturer increase sales and market shares and the manufacturer can collect sales payment quickly. In addition, the professional credit rating and risk management ability of the lessor will help the manufacturer choose more high-quality and long-term business partners.

(6)The lessor can negotiate with the lessee and make a financial leasing plan according to the actual demand of the lessee. It will make the rent payment and business revenue of the lessee more compliable. The lessee can use the rent to adjust operating cost, which will have a better tax saving and postponing result.

(7)After the lessee pays up all contracted rent as scheduled, it will hold the ownership of the equipment, or the two parties may agree to purchase back the equipment at a lower price.