Do you know what some of the factors that influence medical equipment lease rates are?
Institutions or individuals that specialize in medical procedures need the latest medical equipment if they are to make the best impact on their patients. However, acquiring medical equipment is not easy because of the high costs.
Again, technological changes would render equipment obsolete sooner than expected and investing heavily in equipment that will not be in use for long is not practical for many health facilities. Two ways to obtain medical equipment is via lease financing.
Fast growing medical firms which may be in need of working capital often opt for lease agreements. Use of a lease necessitates a firm to be aware of the health care equipment prices, costs of affecting a lease and rental or leasing rates.
Factors That Influence Medical Equipment Lease Rates
Equipment used in health facilities is expensive and most of it demands high technological improvements. Some of the equipment that you can lease includes MRI machines, surgery equipment, computers, EMR software, X-ray and ultrasound machines, surgery tables, imaging and diagnostic equipment.
You should begin by doing a lease vs. buy analysis in order to ensure that you are making the best financial decision. Start by comparing equipment prices different major manufacturers and comparing lease quotes from several medical equipment leasing companies.
One of the factors that influence medical equipment lease rates is the period of the lease. Most leases last from one to five years. Most leasing companies will expect you to pay only the depreciation amount that the equipment will experience while you are using it.
Also, medical equipment lease rates vary depending on whether the agreement is a capital or operating lease. Capital leases may be more expensive because you will end up retaining ownership of the equipment and as such you can enjoy capital allowances. On the other hand, operating leases are pure rental agreements and the rental payments are regarded as expenses so they are not included in the balance sheet.
Typical Medical Equipment Lease Rates In The United States
Depending on the equipment itself, cost and of course credit worthiness of your health facility, medical equipment lease rates will vary and sometimes significantly. For every $1000 value leased, you will pay between $40 and $60 per month. Thus for example, a $20000 machine will require between $400 and $600 per month in lease payments while a hundred thousand dollar machine will require $4000 to $6000 per month. The payments may be modified into quarterly, monthly or annual payments to suit your health facility’s cash flow situation.
Most leasing companies and medical in particular will have equipment lease calculators on their websites to help lessees estimate how much they would spend on their lease. Using a lease rate calculator is however not recommended because most of them generate false numbers which can lure you into entering bad lease agreements.
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Lease Options For Medical Equipment
There are typically three options though a hospital can use to reach an agreement that is favorable. The most common lease is the fair market value lease. Under this leasehold, your medical institution can purchase the equipment at the end of the lease if you so wish. Valuation will be done using the fair market value of the equipment at the time.
Another option is the ten percent buy out lease. Under this lease, you will purchase the equipment at ten percent of the value of the equipment. The third option is a $1 buyout lease in which case you will pay one dollar at the end of the period of lease.
Lease companies dealing in medical equipment may offer either new or used equipment. The used equipment will of course be cheaper and sometimes refurbished. The average leasing monthly period is a minimum of 12 months and a maximum of 60 months. The maximum of course varies and some leasing companies have been known to offer as high as 84 months. If you decide to pay zero at inception of the lease, the lessor may include soft costs such as insurance, training and shipping in to the subsequent lease rentals.
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