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Paul Kendall
Running a medical practice is hard enough these days, especially when you account for the amount of doctors, clinics, and hospitals out there. Trying to stay ahead of the others is difficult and almost impossible without the new medical equipment on the market. To stay competitive, you should consider medical equipment leasing as an option to obtain the newest technology and be able to provide service to a larger number of patients.
Let's say you're operating a small medical practice then minimal equipment is needed, but you still need top of the line equipment to provide thorough diagnostic care and be able to treat the majority of the patients that may come your way. Since equipment is so expensive these days, medical equipment leasing is the obvious choice to allow you to be able to get the newest technology and provide the best care to your patients. This also opens the door to expanding your practice and serving more people within your community.
If you are choosing to expand by adding other doctors to create more business or just offer more diagnostic services, then obtaining the equipment you need may require some help. Medical equipment leasing allows you to provide your patients with cutting edge technology as well as grow your practice without having to charge them exorbitant fees or break your savings to purchase all the healthcare equipment you need. If you are ready to make a change in your practice and are looking for a way to grow, then consider medical equipment leasing to help you move in that direction.
Tax Breaks on Medical Equipment Leases are Beneficial
Once you have made the decision to look into medical equipment leasing as the way to expand your medical practice, then you can begin to focus on the benefits that you can get with it. One of the best is the tax breaks that a lease provides to you. Most leasing programs allow you to allocate lease payments as an overhead or operational expense so you benefit from the tax break right away. Medical equipment financing structured as a $1 buy out, equipment finance agreement or 10% PUT allows you to take advantage of section 179 tax savings and write off the cost of the equipment the first year you pay for it. Medical equipment leasing structured as a fair market value purchase option will give you a better tax write off over time because you can write off 100% of your payments off your taxable income because your lease payments are viewed as a rental expense.
Saving on taxes helps your business prosper and it is part of the tax law to allow you the ability to write off costs as a business expense. This can allow you to be successful in your medical practice much faster. Medical equipment leasing programs will create a window for success and profitability in your medical office.
Medical Equipment Leases Offer Flexibility
When you consider the costs of some of the medical equipment that you will be purchasing, you may be overwhelmed. But thankfully, medical equipment leasing can provide some flexibility in the costs so you can actually afford to have what you need. When you contact a medical equipment finance company, you can let them know what equipment you are looking to get for your practice and how much you can afford in your budget. Most companies are happy to work with you on the terms so that it works out for both parties. Medical equipment loan terms can be longer or shorter depending on how much you can spend so that it is affordable to provide that equipment to your patients.
Since these highly technological pieces of medical equipment are expensive, setting up a maintenance or warranty clause in the medical equipment leasing agreement is important. When one of the machines is not operating, you are losing money. Keeping them up and running as well as current on all upgrades and improvements is necessary both financially and for the wellbeing of your patients.
Technology changes for all businesses and the medical industry is no exception. Most medical equipment leasing agreements will allow you to have a trade up or buyout clause in your agreement so you can upgrade to the newer machines when they come out. These cutting edge changes could be the difference between a patient selecting you and another medical practice for their care. Keeping your current patients and growing your patient base is the point of these medical equipment leasing options, so don’t let these advantages slip away from you.
Utilize Cash or A Line of Credit in Other Ways To Buy Medical Equipment
One of the greatest benefits of providing the best care to your patients is the ability to use medical equipment leasing to free up cash and lines of credit. This type of financing allows you to save your line of credit for other areas of business that you may need it for like supplies, payroll, and inventory. Being able to preserve your line of credit at your bank allows your medical practice to not look overextended and if structured as an operating lease it allows your books to look more favorable if a possible investor comes along to look at the books.
Medical equipment leasing programs are different than medical equipment loans from the bank. Bank financing may require anywhere from a 10% to 20% down for a loan to purchase the medical equipment. In the terms of medical equipment leasing, you will have a lower down payment and the terms will be more flexible to keep costs to a minimum. The lower down payments helps to preserve cash reserves that you will need to use for other areas of your medical practice.
Buying medical equipment with a deferred payment option of $0 for the first three months will give your practice time to start marketing and generating revenues before your payments begin. Some medical equipment financing companies like Trust Capital will even offer you $99 for the first 6 months followed by a term up to 84 months.
When you have the advantage of saving cash and keeping it available due to your medical equipment leasing agreements, you have the ability to use that cash to help grow your practice. Some of the areas that you can use that cash in are for payroll to add employees to cover the increased amount of patients you are going to acquire with the new equipment, advertising to help the prospective patients know about your practice, and any supplies that your office is going to need to grow.
Utilizing a medical equipment leasing program is hugely advantageous for your medical practice. Adding equipment so you can expand and add other doctors to bring in more patients is crucial to growing your practice. To be successful, create the right business plan and look into medical equipment financing to help you to achieve the success you want.
What Does Medical Equipment Leasing Cost?
What can you expect to pay every month when you apply for a medical equipment lease?
It all depends on your personal credit score, time in business and business credit history. Don't worry it's ok if you don't have any time in business. You can still qualify for competitive leasing programs.
Here’s an example: Let’s assume that you want to buy a $75, 000 worth of new or used medical equipment to be financed for 5 years with a $1 buy out.
If your practice has been running for 2 years with a good credit, then the chances of you paying $1,440 per month for 5 years is higher. A decent or imperfect credit can result in a payment of $1,525 per month for 5 years.
If your practice is less than 2 years old and has good credit, then you can expect to pay $1,575 per month for those 5 years.
However, if your business is less than 2 years old and has a risky credit, then you can expect to pay $1,785 per month for those 5 years.
These numbers are subject to credit approval and are ball park figures.
Although medical equipment financing can be available regardless of credit score, keep in mind that the riskier your credit is, the higher the monthly payment will be.
What’s my medical equipment lease interest rate?
It’s very tough for a doctor to calculate an interest rate on a lease when you’re not a financial professional. Use this equipment lease interest rate calculator to calculate what your annual percentage rate is on your equipment leasing agreement.
Many medical equipment-leasing companies won't put the medical equipment lease interest rate on the medical equipment leasing agreement. Almost all equipment-leasing agreements don't put your equipment leasing interest rate information on the equipment lease documents.
Also you can use the amortization schedule that comes with the equipment lease calculator to give to your accountant during business tax season to help him decide the best way for you to get the best tax write offs now and in the future to lower your taxable income.
Click here to get access to the most trusted medical equipment lease interest rate calculator. This equipment lease calculator computes the lease interest rate based on a known payment amount, lease amount, residual amount, and lease term.
Lastly, medical equipment breakdown and the associated service costs can be very expensive. Anytime you purchase medical equipment, the manufacturer or dealer will offer maintenance service plans and warranty options. It is important for you to understand what is covered and what is not covered in the warranty and maintenance plan you are going with. Take the time to review this information carefully, and choose the maintenance and warranty plan that suits your need. Having a good maintenance service plan and warranty is well worth it.
As you can see, there are many options and each option will be popular for different business situations. Make sure to understand where your business is, and learn which option would work best for your need.
Call Trust Capital at 866-458-4777 to discuss how to lease medical equipment for your medical office today.
