How much can you spend on medical equipment leasing costs? This depends on your immediate and long term goals.
Whether your health facility is an established one or a start-up, leasing medical equipment is the preferred alternative to equipping your facility with the best available equipment.
High-priced modern equipment is introduced into the market everyday and a significant amount of money is required to obtain this equipment. Unlike a loan or a direct cash purchase, leasing gives you the opportunity to free up a large amount of capital by saving thousands or even millions of dollars.
How much you can spend on medical equipment leasing costs depends on the tactics that you use to save money on your lease. Many health facilities do not know the ins and outs of leasing medical equipment and this ends up costing them a lot of money. You can save yourself the headache of paying large sums of money by focusing on these aspects of equipment leasing.
Medical Equipment Leasing Costs: How To Save Money On Your Lease
1. Pick The Right Leasing Company
The starting point for saving money on your lease is choosing the right equipment leasing company. This will go a long way in helping you dodge substandard lease transactions. Choosing the wrong equipment leasing company will result in a poorly designed lease transaction, hidden fees, inability of the lessor to deliver and slow approval.
To ensure that you save on costs in your lease, ensure you look for a lessor who:
- Can perform
- Has a good reputation
- Has relevant experience and knowledge in leasing medical equipment
- Has good references
- Has a relationship approach
Ask your lessor to provide you with a list of recently completed leases and contacts for their key funding sources. Follow up with the contacts and review all the information they give to you.
2. Select The Right Lease
You can save on medical equipment leasing costs by choosing a lease suitable for your current financial situation. What are the top attributes that your lease should have?
When choosing a lease consider:
- Your health facility’s credit status
- The amount of time you will use the equipment
- Equipment obsolescence
- Flexibility of the lease
- The pricing of the lease
- Balance sheet considerations
Choosing the wrong lease can cost your facility a lot of money so you should carefully evaluate your bids. Get at least three bids and do a comparative analysis. Don’t just compare the lease rates; compare the end-of-lease options, notice requirements, interim rent, the right to terminate your lease early, and any anticipated costs. Look for a lease agreement that will cover your equipment needs for a minimum of 12 months.
3. Choose Wisely Between A Fair Market Value Option And A Bargain Purchase Option
If you intend to keep the equipment beyond the equipment lease term, then you should consider negotiating a bargain purchase price because it is cost effective. If the equipment will likely become obsolete by the time your lease ends or you plan on returning the equipment at the end of the lease, consider signing a lease with a fair market value end-of-lease option.
4. Cap Interim Rent
You can save on medical equipment leasing costs by putting a cap on interim rent. Interim rent is the amount of money you pay between when you accept the equipment to when the official lease period starts.
Lessors justify interim rent by saying that they are obligated to pay their supplier during the interim period. While this is not unreasonable, it can dramatically increase your lease cost by extending the lease period.
Most lease periods begin at the beginning of the month. So the best time to schedule delivery and acceptance of your medical equipment is near the end of the month. Another approach is to limit the interim period.
How much you can spend on medical equipment leasing costs largely depends on how well you can save a bundle on your lease by focusing on the four critical areas. Keep in mind that these are not the only areas that you should focus on. Consider hiring a finance specialist to help you analyze your medical equipment leases properly to see if they suit your health facility’s needs.
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