Whether a large hospital or small private clinic, leasing has
become an increasingly popular way of obtaining medical equipment.
Get more details here:
How Equipment Leasing Works
Leasing medical equipment works in the same way as leasing a
car.
By entering into a lease, you have the right to use the
equipment without the burden of ownership. The advantages of a lease are:
• Lower payments as you’re paying for only a portion of the
assets
• Reduced upfront costs (if any)
• Flexible end of term options
In the medical device market, the typical lease term is between
three and five years. At the end of the initial term, you have the option to
purchase, renew, extend, or return the equipment. As a technologically driven
field, leasing medical equipment often proves to be one of the most
financially efficient ways to ensure your practice or facility has up to date
equipment without tying up significant capital.
How Equipment Financing Works
Equipment financing refers to the practice of taking out a loan
to pay for equipment over time. By choosing to finance equipment, you will
eventually own the asset outright. This works well for organizations with
strong credit and for mature technologies or for assets with a long life
expectancy.
Financing is popular, in part, due to restricted capital
budgets. While most equipment financing is collateralized debt, the loan amount
may impact your available line of credit. Since medical equipment, such as CTs
and MRIs, can cost several hundred thousand dollars, the best practice is to
work closely with your financing partners.
Advantages of Equipment Leasing
1. Control and conserve cash
You avoid the upfront costs of purchasing equipment and the lease becomes a
fixed monthly line item which can help you allocate financial resources more
effectively.
2. Built-in life cycle management
Leasing affords you the option to upgrade your medical equipment more
frequently, with lease terms typically between 3 and 5 years. This is not only
beneficial for patients but can greatly improve operational efficiency as
well. Equipment leasing allows for items which may be nearing the end of their
operational life, to be readily replaced as the normal course of business.
3. Maintain strategic flexibility
Large capital purchases can tie you into a specific strategy or technology.
Leasing medical equipment enables you to adapt as the industry evolves and
increases flexibility for you and your organization.
4. Quick and simple
application process
Provided the right financial statements, approval and execution of a lease can
be quick and easy.
Advantages of Equipment Financing
1. Acquire medical assets with little or no immediate cash
outlay
You will not have to part with a large lump sum payment to acquire the
equipment. The capital you conserve can then be allocated to other areas of
your organization.
2. Ownership
After the terms of the loan are satisfied, the title will pass to you, the
owner. For mature technologies and equipment with long useful life, this will
help you maximize your return on investment.
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