Pros And Cons Of Medical Equipment Leasing

Is medical equipment leasing the right step for your medical facility? The only way that you can know for sure is if you evaluate the pros and cons and determine which one outweighs the other.

medical equipment leasingEach medical facility is unique and the decision of whether to lease medical equipment should be made on a case-by-case basis. Nursing facilities, medical practices, hospitals and private health care facilities are able to keep their budgets in line by choosing medical equipment leasing what with the continuous advancement of technologies in the health care industry.

Pros And Cons Of Medical Equipment Leasing

Whether you plan to start your own nursing home, private practice, or hospital, you can benefit greatly from medical equipment leasing.


With medical equipment leasing, you can lease practically everything. You can lease MRI machines, lab equipment, computer systems, X-Ray machines, Ultrasound systems, patient monitoring equipment and so on and so forth. It is much cheaper to obtain this equipment regardless of whether you need new ones, used ones, refurbished or re-manufactured ones.

Leases have more flexible terms and are much easier to obtain unlike when you apply for, let’s say, a bank loan. Bank loans usually involve long, tedious processes. There is a lot of paperwork that you must fill out and provide. There are meetings that must take place in order for you to get approved, not to mention the approval process may take anything from a few weeks to an entire month.

You can build your credit score when you get into medical equipment leasing. If you have damaged credit, the period during which you have leased your medical equipment will be enough to increase your credit score. If you have a damaged credit score and you approach a bank for a loan, you can be assured that chances are very high your request will be denied. In these hard economic times, banks are holding on to their money tightly and cannot risk lending it to someone who has a bad credit score. Moreover, if you are a start up medical facility, you have a higher chance of being approved for a lease than a bank loan.

You do not need collateral to get approved for medical equipment leasing. The reason is that your lessor only needs the leased equipment as security. Banks need you to provide collateral, which should be equivalent to at least 20% of the money you are asking for. This can be a very expensive option for a start up medical facility with limited cash flow.

Medical equipment requires regular upgrades because it is known to become obsolete very fast. Medical equipment leasing allows you to upgrade your equipment at the end of your lease at no extra cost. When you purchase the equipment however, the cost of upgrading will be on you.


Unfortunately, medical equipment leasing has a few risks most of which can easily be avoided. One of them is that you do not own the equipment. For as long as you are leasing your medical equipment, ownership belongs with the lessor. This can however be solved by signing a lease-to-own agreement at the beginning of your lease term. With a lease-to-own agreement, you can purchase the equipment at the end of your lease term at $1, 10% of the initial cost or at fair market value.

You are obligated to pay for the equipment even when you are not using it. This is a major disadvantage of leasing medical equipment but the good news is that you can cancel your lease. This will of course cost you early termination fees but it beats paying for equipment you are not using any more. If you are using equipment that needs to be upgraded on a regular basis, then you are better off signing a short-term lease rather than a long-term one. This way, you will not be stuck with outdated equipment.

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Bottom Line

Medical equipment leasing is a great way for start-up medical facilities and even established ones to save on money. It is a flexible option, it does not require collateral, takes a short time to be approved (usually within 24 hours) and it makes it easier to upgrade equipment.

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