The Benefits of Equipment Financing for Capital Medical Equipment
Nowadays, the motto that many hospitals live by is to reduce the costs and improve the patient results. As technology advances, spending increases. This is because medical equipment is crucial to patient care. Unfortunately, hospitals often have to weigh the pros and cons of investing in new equipment to treat patients. If you’re a practice with cash flow issues, then you may not be able to pay for critical equipment.
The way that most hospitals handle this problem is through equipment financing. With flexible financing options, you have access to new technology and equipment, despite how much cash you have. Capital equipment is the equipment that produces commodities or services. It has an acquisition cost of over $5,000. In addition, it has to have a lifespan that extend beyond a year.
If you need capital equipment, what options are available to you? The answer is a lease or a loan.
Medical Equipment Leasing
With medical equipment leasing, it is essentially like renting equipment. You pay a monthly fee, lower than a loan payment so that you may use the equipment. At the end of the term, you decide if you want to purchase it or return it. The lease often requires very little cash up front, if it requires cash at all. There are buyback options that vary based on your agreement. You may have to pay some type of residual to keep the equipment. This type of equipment financing is great because it does not dip into your cash flow.
Medical Equipment Loaning
When you receive a medical equipment loan, it provides your practice with enough cash to cover any professional-use medical equipment. You may use an online lender or a local bank. These loans often have flexible terms and the processing is fast. These equipment loans tend to require a small down payment and then you use the equipment itself as collateral. You can even finance the costs of tax, installation and delivery. Of course, that is, if the costs do not exceed over 25 percent of the loan value. The payments usually spread across the life of the equipment and stay low. Once you pay off the loan, you own the equipment entirely. In addition, you can take advantage of a depreciation tax benefit
When you can’t afford to pay for equipment outright, medical equipment financing becomes the best option available. You need the equipment to take care of your patients and to draw in more clients.