The greatest con of dental equipment leasing is also its greatest pro. It is important to analyze if some of the advantages of leasing are beneficial to your business and if the cons actually outweigh the pros. Some of the pros and cons of dental equipment leasing will be discussed here.
A leasing company can give your dental practice great flexibility in the manner that it acquires its equipment. At the same time, it can also restrict the way the equipment is used. Many dental practices in North America are of the opinion that leasing solutions are more expensive than other forms of financing.
Ironically, many practices still flock leasing companies when they need to acquire equipment. How can a finance solution that is thought to be the most expensive be the one that many practices prefer over the cheaper options?
Pros Of Dental Equipment Leasing
In business, it is never all about the price. The reality is that dental equipment leasing comes with many other benefits that outweigh any concerns about interest rates and costs. One of the pros of leasing dental equipment is the fact that it has no impact on your credit lines. This gives your practice the flexibility to use available credit on other areas of your business like improving facilities or marketing. You might also find that this credit line will come in handy now that banks are restrictive on extending or lending credit.
Another pro of dental equipment leasing is the cost. The initial cost of renting equipment is much lower than the down payment you will have to make at the bank when asking for a loan or when making a cash purchase. The high costs might come in towards the end of your lease. The company that you are leasing from might overestimate the value of the U.S dollar heading into the expiration of your lease and this might cost you money. However, if the company underestimates the value of the dollar, then you can save hundreds if not thousands of dollars.
You can choose your own lease rates unlike when you go to make a purchase or get a loan from a bank. Does this mean that you can get the lowest rate there is? Absolutely. All you need to have is a good credit score and the ability to negotiate. A good credit score can give you a higher advantage as leasing companies will be willing to lease equipment to you at a lower rate. It also gives you the upper hand when negotiating for a better rate. Does this mean that you cannot get approved for a lease with a damaged credit score? No. You will still get approved because many leasing companies have special programs for practices with damaged credit. They will, however, charge you higher rates.
You will have fewer maintenance responsibilities because your lessor will be responsible for repairing, maintaining and disposing the equipment.
Medicine is a field that often uses machines whose technology is often changing. Even practices that purchase their own machines often lease the larger more expensive machines if the technology keeps changing. This protects them against obsolescence.
Cons Of Dental Equipment Leasing
One of the cons of dental equipment leasing is the fact that some leasing agreements may be very complex and full of hidden charges. These charges can eventually come back to bite your practice in the long run. The good news is that you can avoid this by going through your contract carefully. Some leasing companies have a way of using jargon or twisting the language they use in their contracts to trick you into signing a very expensive or impractical lease. Have a lawyer who is experienced with leases go through your contract before signing it.
Another con of dental equipment leasing is the fact that you do not get to own the equipment. For as long as you are leasing the equipment, ownership cannot be transferred to you so there are no big tax breaks. Your practice can write off the direct cost of leasing the dental equipment but the benefit would be much higher if you actually owned the equipment. Fortunately, you can get into a lease-to-own agreement with your lessor where you will own the equipment at the end of the lease term.
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