Why Healthcare Professionals Should Get Equipment Lease Financing
A health economic survey performed in 2015 showed that the top priorities of budgeting for hospitals were health IT, facility renovations, and imaging equipment.
Having access to the best medical equipment is essential to being able to provide the best care possible. And how much equipment a healthcare facility needs is growing.
In 1995, the average bedside in a healthcare facility had eight devices. By 2010, that number grew to 14. And medical equipment isn’t cheap.
Even stainless steel surgical instruments and equipment cost over $100,000.
One option to keep costs down is to use equipment lease financing as an option. There are many benefits to equipment financing. Keep reading to learn what they are and why you should consider medical equipment financing.
Equipment Lease Financing Saves Money
Streamlining your budget and being able to forecast expenses are vital to running a thriving healthcare facility. Needing a major piece of equipment can easily limit growth potential unless you select the right equipment financing solution.
Leasing equipment, unlike a long-term loan or purchasing the equipment outright, enables a healthcare facility to have the equipment they need without being required to put down a large downpayment first.
Can Use Cash or Credit for Other Purchases
Instead, leasing lets you use your cash and/or credit line for other business needs. You can even keep your cash flow reserves for other unexpected necessities that may have a greater ROI (return on investment).
If a natural disaster or unexpected crisis strikes, you need to make sure your hospital can handle the needs of large groups of new patients. That means you need extra money on hand to pay for things such as:
- Extra staff
- Using equipment longer
- Extra devices
Leasing allows you to free up your funds in case disaster strikes. This allows peace of mind knowing no matter what, you can address the needs of your patients.
Economic Advantages of Leasing
While you do have to pay to lease equipment, these payments have three advantages:
- They’re paid over a period of time
- The costs are fixed
- The cost is affordable
You also don’t have to worry about inflation or unexpected spikes in the cost of the equipment while you’re leasing it.
Easier to Finance
Getting a loan means needing to fulfill certain requirements such as:
- Making a large down payment
- Showing cash-flow projections
- Producing client list reviews
You also won’t have to deal with compensating balances.
The Application Process Is Fast
Not having to produce additional financial information means the leasing process is faster and easier than it would be if you took out a traditional loan.
Also, most equipment financing companies can approve an application in only a few hours, rather than having to wait for days or even weeks.
By leasing equipment, your payments are treated as an expense on your income statement.
You won’t have to depreciate your technology over an extended period of time.
Another great benefit where costs are concerned is that the IRS classifies equipment leases as a deductible expense.
By being able to deduct those payments from your income, it reduces the overall cost of the lease.
Maintenance Expenses Are Covered
Equipment financing companies are the ones responsible for handling all your equipment’s maintenance and repairs. You’ll save more money by not having to worry about keeping enough cash on hand for unexpected equipment issues.
However, you should always verify that the heavy equipment financing company you’re working with will be responsible for all maintenance and repairs before you sign a contract.
Improved Patient Care
Patient care is always a top priority. But it doesn’t come cheap.
Staying competitive means you need access to the latest equipment. Technology changes quickly these days. Even a piece of equipment that’s only a few years old can be considered out-of-date.
Competitive Advantage With Reduced Risks
One way to stay on top of it and gain a competitive advantage is to lease equipment. Thankfully, leases allow you to become eligible to upgrade your equipment every few years.
Patient care is also improved by having the ability to remove obsolete equipment as soon as possible. This helps reduce the healthcare facility’s risk.
Providing Faster Service to Patients
Technologically advanced medical equipment often works much more quickly than their older counterparts. Hospital overcrowding has become a huge issue and medical practices are struggling to keep up with demand.
Having the latest technology allows your facility to serve a larger number of people. And most often, you’re also able to achieve better outcomes for your patients.
New equipment helps you reduce the strain on your facility while leading to more positive results throughout the entire healthcare system.
Leasing also lets you focus on expanding your facility to help more patients.
This is extremely important, especially in areas where there aren’t a lot of healthcare facilities available to meet patient demand.
Acquiring new equipment means your staff needs to be trained on how to use it properly. It’s also good to have support in case something goes wrong with the equipment.
Spending millions of dollars on equipment no one knows how to use or fix can end up costing your facility a lot more money. And these associated costs are often overlooked during the decision-making phase.
Thankfully, medical equipment financing also comes with a bundled service that allocates for training, support, and other necessary services that are necessary when operating such expensive equipment. It’s then easy for a healthcare company to budget for all costs associated with acquiring a new piece of equipment.
Types of Leases
There are two types of leases available.
A capital lease is most common. This allows a healthcare facility to purchase the equipment and become the owner at the end of the lease term.
Operating leases are most useful for hospitals and other healthcare facilities since it’s used for technological equipment that has either a high turnover rate or needs updates.
An operating lease lets you return the borrowed equipment back to the lender so you can either purchase or lease new equipment.
Request a Quote
When it comes to medical equipment lease financing, it’s not just about whether or not leasing is the best option. It’s about finding the best equipment financing company to work with.
We’re dedicated to helping you provide the best care for your patients. Find out how we can help by requesting a quote from us today.