Leasing medical equipment is an easy financing option for many health care facilities but it comes with many challenges.
Healthcare professionals such as doctors, vets, dentists and opticians require special equipment for their work. For those in private practices, acquiring such tools is an expensive affair and leasing is a viable option. There are companies that offer such medical equipment for lease with reasonable payment schedules. There are a number of advantages of leasing for medical professionals and those in the health sector.
Some of these include easy access to new and state of the art equipment that are difficult to purchase. Another benefit is the ability to upgrade any of the tools with ease. It is difficult to sell of used medical equipment. But if you are on a lease, all you have to do is terminate and get another one with the new tools you want. Regardless of all these benefits, there are also a couple of challenges of leasing medical equipment.
Challenges Of Leasing Medical Equipment
Not Owning the Medical Equipment
Any successful practice should strive to own health care equipment. This ensures that there will always be continuity of service. In the case of leasing, the ownership remains with the company that offered the lease. This means that it can be repossessed in the event of termination of a contract. Never the less, there are certain programs that allow you to have ownership.
For example, at the end of a lease, you can decide to buy the equipment. This is normally priced at a fair cost and allows you to own one after getting enough revenues. Therefore, when you are leasing any products that you would like to own, you should inquire about this. This will allow you to plan on paying off and owning the equipment.
Obligatory Payments Even for Medical Equipment not in Use
When leasing medical equipment, you are going to sign a contract with the providing company. This normally specifies that you will use it for a given period of time and make payments in installment. This means whether or not you use it for that period you will still be required to make payments. This can be a challenge especially when you are paying for something that hardly earns any revenue.
If this is the case, it might be necessary to terminate the lease agreement. However, it is important to do a thorough evaluation and confirm that you will not need it any more. In other instances, you can terminate the contract when you want to get a new tool or when there is an upgrade. Normally, there are charges for early termination. Nonetheless, it is worth paying this amount and saving yourself the recurring costs.
In order to avoid such situations it is advisable to lease according to your needs. If there is equipment that you only need for a short time, then it is best to take out a lesser period on the lease. When this time expires, you can always renew. The same should be done with health equipment that is constantly being upgraded.
High Overall Costs
Due to the high value placed on medical equipment, leasing could be more expensive than purchase. This is especially true for those that are used for a long amount of time. In the end, when you calculate, you might find out you have spent more on the lease than if you would have bought it. On the other hand, this is still the best option for those who cannot afford the initial costs to buy it in the first place.
It is also wise to remember that a lease is only more expensive than owning equipment if you were to pay for it upfront. When you have to get a loan to make the purchase, you could incur additional expenses when paying the amount plus the interest. Therefore, in such a case, a lease is cheaper than ownership. Getting a loan for purchasing medical equipment is also more difficult compared to leasing.
When you go to a money lending institution, you will be required to demonstrate that you can repay. This might need you to surrender your credit scores and if you do not have a high rating, you will not qualify for a loan. Consequently, even if the overall costs of leasing are higher, it is always the easier and cheaper option compared to getting a loan.
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