What are the current rates for leasing dental equipment? They may not be as high or as low as you may think.
Medical practitioners in general and dentists in particular require the latest medical equipment to perform their tasks effectively. Acquisition of dental equipment is bogged by two main disadvantages.
First off, the initial acquisition costs could be too high leaving a strain on the dental practice’s operating finances. Then, the medical field is a dynamic field which, coupled with technological evolution, would render the equipment obsolete sooner than expected.
Apart from leasing dental equipment, the dentist can purchase via financing. With the latter, the dental operation acquires a loan, purchases the equipment and later repays the loan. This contrasts with the lease arrangement where the company obtains the equipment as a lessee and makes monthly rental payments to the leasing company.
Young and growing dental practitioners in need of capital will find leasing arrangements particularly pleasing. There are two types of lease that also apply to leasing dental equipment. These are capital lease and operating lease.
A capital lease is a buyout lease where the lessee assumes ownership of the equipment eventually. Rental payments include capital payments for purchase of the equipment.
In an operating lease, the lessee pays to use the equipment and at the end of the lease, returns it. Buyout leases are suitable for long term equipment while operating leases are suitable for equipment that either has a short working span or may become obsolete in the near future.
Factors Influencing Rates For Leasing Dental Equipment
It goes without saying that the company involved in financing the lease agreement heavily influences the leasing deal. There are companies that specialize in leases for medical equipment and even further just dental equipment. Manufactures can also give a good deal or sometimes they prefer to arrange with a leasing company.
The equipment in question also influences the pricing of rental agreements. A typical dental consultancy requires several pieces of equipment such as dental chairs, radiography equipment for X-rays, mirrors, probes, chisels and drilling equipment, sterilizing equipment among others. Some of this equipment is easily obtainable without leaving a dent on your dental practice’s finances.
Obtaining a favorable leasing arrangement begins with a comparison of the various lease rates prevailing in the market. Get a general idea of the prices from manufacturers but more realistically from cash sellers. Proceed to obtain leasing arrangements from the companies involved in leasing dental equipment from purely dental companies, to banks and wholesalers.
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Most leases cover a few months to several years. Shorter leases tend to be operating leases while longer leases are capital leases where the you end up owning the equipment.
Both have advantages and disadvantages. For example, with capital lease, the company will end up owing the equipment in the long run thus also enjoying capital allowances for tax purposes. However, the equipment could become obsolete.
For operating lease, the rental payments could be treated as dental expenses. The company can cancel the lease at any time and enter into a better lease in addition to any other benefits such as equipment servicing by the lessor. On the flip side, the company will need yet another lease agreement in the end.
Typical Rates For Leasing Dental Equipment
Many companies involved in leasing equipment will make it easier for you to evaluate the ensuing financial obligations. Many will list the rates on their website and some online platforms such as LeaseQ will give you a free and instant quote. However, other factors such as cash flow of your dental operation, credit worthiness and prevailing economic conditions may more often than not be put into account.
Obtaining The Best Deal
Leasing dental equipment unlike other leasing arrangements is only done by few leasing companies. Still, it is possible for a prospective lessee to obtain a great deal. Begin by doing a proper research on the various dental equipment leasing agreements available. Send requisitions to the companies. Narrow down to two or three and negotiate before selecting the best deal.
The financing company, more often than not evaluates its business based on the ability of the customer to meet periodic rental payments, the asset under lease, the customer’s credit worthiness and prevailing market rates among others.
You should do enough research and prepare your financial documents in a manner that stipulates a true and fair view of your company’s financial position. This will be crucial in negotiating for rental agreements conducive to your company.
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