Starting a new clinic can require a significant investment in medical and therapeutic equipment, not to mention office furnishings and other supplies.
Medical and health related technology is constantly evolving, inevitably becoming more accurate, safer and effective.
In this new world, Canada’s public healthcare system and private health clinics are turning to leasing their equipment as a way of lowering overall costs, freeing up cash flow and more importantly, providing the most up to date patient care.
Over the years we have financed all types of equipment for health practitioners. In some cases it started out with one piece of equipment and as the medical professional began to understand the benefits of leasing, they came back to us to finance additional equipment and even their medical supplies.
We can even finance management software for physiotherapists chiropractors and laser therapy technicians.
One of the benefits they enjoy the most is that leasing allows them greater flexibility to keep their equipment up to date.
How does that work? Well, when the lease term is over, they simply acquire the latest model and maintain their lease payments at about the same level. So if, for instance, we finance laser therapy equipment for a medical clinic, after a three year lease the older laser technology may soon be out of date. If the clinic purchased the equipment with cash and they now want to buy more state-of-the-art equipment, they will have to find a buyer for the old equipment, trade it in or send it to the scrap heap. Either way, they have to deal with another large cash outlay which may put pressure on their time, cash flow and lines of credit.
When they lease their equipment, they can choose to buy it out, usually at a very low price, or return the equipment and replace it with a brand new state-of-the-art laser equipment. Typically, end of lease buyouts are 10% of the original purchase price.
Using the latest technology will not only make them more efficient, it will also help build the patient’s perception of their clinic as being more modern and preferable to competitive options. This perception also attracts highly skilled technicians who prefer state of the art equipment.
There is no limit to the types of equipment that medical and health practitioners can lease. The list can include:
- Chiropractic Tables and Equipment
- Physiotherapy Equipment
- Laser Therapy Equipment
- Therapeutic Massage tables
- Dental Equipment
- MRI Equipment
- CT Scanners
- X-ray Machines
On top of all that, the clinic writes off 100% of the lease payments, instead of calculating and writing off only the depreciation amount on the equipment at the end of every year. This is one of the main reasons we recommend clinics and practitioners should lease depreciating equipment and only pay cash for appreciating equipment.
Medical and health practitioners should lease depreciating equipment and only pay cash for appreciating equipment
Here is a list of 7 reasons why in most cases you’ll be better off leasing medical equipment rather than buying.
- Your bank will require a 10 – 20% down-payment on a loan, while a Lease can be done with only one monthly payment in advance.
- Leasing allows you to more easily upgrade your equipment, giving your patients access to the latest in technology which provides you with efficiencies and a competitive advantage.
- Leasing improves your asset management and frees up capital for other expenditures.
- You can plan for the future because your lease payments are fixed and won’t fluctuate with rising interest rates.
- With leasing, you avoid obsolescence because you simply upgrade to the next model at the end of your lease.
- Leasing provides flexible payment options and oftentimes no down payment is required. With leasing, you can secure one hundred percent financing, which means the hardware, software, training, maintenance, shipping and installation can all be included in your lease agreement. We’ll even finance 100% of your Medical Practice Management Software.
- Leasing provides tax benefits as you may be able to write off 100% of your lease payments.
With benefits like these, it’s easy to understand why Canada’s healthcare system and especially private health clinics of all kinds are turning to leasing.
Given the rate that equipment technology is advancing, and becoming safer and more effective, leasing makes a lot of sense for your clinic if you believe it’s important to use the latest technology and maximize your cash flow.
If you are starting or currently operate a clinic contact us to determine if leasing make sense for your specific situation.
Source: http://www.taycor.com/news/ the-advantages-of-medical- equipment-leasing-over-loans/