Medical Equipment Lease
CapitalManagers, LLC will work with our Funding Sources to customize a loan program for any licensed healthcare professional with a credit score of 600 or better.
The Funding Sources we represent that have a variety of loan programs including debt consolidation, equipment finance, acquisitions, start ups and working capital.
- Up to 84 month terms
- Application only to $100,000
- Credit Approval in 48 Hours from Application Submission
- Funding possible within 5 Days
Our products can be used as you see fit to enhance your practice.
We have funding sources that cater to the medical profession, working capital, dental practice refinancing, medical equipment leasing.
Leasing Gives Providers a Way to Acquire Medical Equipment
Leasing gives the healthcare provider the opportunity to enjoy the exponential growth rate of medical equipment technology. The medical community may now offer diagnoses based on information about a patient's condition that we couldn't accurately obtain using older equipment. The problem is that most organization's capital budgets just can't keep pace with the quickening of technology advances.
The problem is getting worse
If you're like most medical care providers, you are facing the dilemma of how to provide cutting-edge care to your patients but don't have the financial reserves (cash or credit) to make the purchase of new equipment. One could argue that it is economics that slows down the delivery of medical care. Standard accounting practices allow for the assets to be depreciated over five years. What do you do when the equipment needs to be replaced in some amount of time less than five years? One option is to try selling the outdated equipment on eBay or somewhere else in the open market.
There is a better solution
There is another option that many astute organizations use. They simply lease the equipment. Why lease? It's all about cash flow. Typical leasing standards require you to put just two payments down in cash. In addition, an operating lease will allow you to write 100% of the cost of the equipment as expense on your firm's income statement. By treating the asset as an operating expense you don't have to deal with depreciation on the leased medical equipment. Plus the lease does not show up on your credit report, possibly freeing you to make other necessary purchases.
Is leasing for you?
While most organizations need to be in business for at least 3 years, savvy shoppers can find leasing companies that have no time-in-business requirements. Even without documenting your financial statements, you should be able to enter into leases up to $150,000. By providing a bit of financial information, you can lease items with a much higher dollar figure.
Does this sound like a viable option?
Typical lease terms are two to five years, and are affected by the typical useful life of the item you are leasing for your business. Some leasing companies have the flexibility to buy back newly acquired equipment assets and convert them into leases. Do you normally pay shipping, installation, training and other soft costs on top of the actually hardware?
You can search out leasing companies that will include these items in the lease. Have a lease with unfavorable terms? Most do not know it, but you can actually refinance leases into one with more favorable terms. Be wary, however, of expensive penalties that may be outlined in the lease agreement.
If you're strapped for cash, or just want to conserve it for other business purposes, leasing will enable you to obtain a much needed piece of business (medical or otherwise) equipment without a large outlay of cash.
Tax and Cash Flow Benefits of Leasing Medical Equipment
As medical technology is ever changing and new equipment enhancements are developed, renting equipment is a logical choice for a variety of reasons. Medical equipment leasing can keep their balance sheet intact, as monthly equipment lease payments can be classified as operating expenses. This would also allow the provider to benefit from tax deductibility.
According to industry research, over $3 billion of medical equipment was leased last year in the United States. In its simplest form, the lessor purchases the equipment and then rents it to the lessee. At the end of the lease term, the lessee has the following choices:
Buy the equipment
Re-lease the equipment
Rent new equipment
Return the equipment
The worth of medical equipment does not come from owning it, but rather from the results of its use. With renting, there are no large down payments so the lessee's capital reserve remains intact. Equipment is also more easily attainable than from bank financing, which requires extensive documentation and even personal guarantees. Most any piece of medical equipment can be leased, including CT scans, surgery tools, lab testing machines, x-ray machines, heart rate monitors, and sonograms.
Other benefits from leasing medical equipment:
Flexibility: As the provider's practice grows and equipment technology increases, leasing allows for the owner to easily add-on or upgrade their package. It is important to build in upgrade features at the inception of the lease. Also, installation and maintenance, and other services can be added to the lease.
Speed: As opposed to bank financing, leasing can provide the needed equipment in a matter of days. Typically, a one-page lease agreement is executed and approval can occur in a matter of hours. It often takes bank loan committees several weeks to approve an equipment loan.
Tax Advantages: An operating lease (also known as a true lease) generally allows the lessee to write off 100% of lease payments made during the year. The equipment write-off is tied to the lease term, which can be shorter than IRS depreciation schedules, resulting in larger tax deductions each year. The deduction is also the same every year, which simplifies budgeting.
Keeping equipment at a state of the art level: As mentioned previously, structuring an add-on or upgrade provision in the lease is critical due to the ever-changing technological advances in healthcare. Adding these clauses in the lease agreement lessens the peril of being stuck with outdated equipment. Maintains capital reserves: Leasing allows you to buy the equipment and tools you need today while spreading out all the payments over time. This provides you with a cash reserve for day to day expenses. Since a true lease is not a long term obligation, it will not show up on your balance sheet, so the company will be more attractive to a conventional lender when or if one is needed in the future.
A physician starting a practice or even acquiring one can benefit from entering into an equipment lease. Purchasing a medical equipment package can cost several hundred thousand dollars and put the provider behind the eight ball from the very beginning. Not only can medical equipment leasing alleviate that dilemma; it also provides budgetary, tax, cash flow, and upgrade benefits that can allow the provider to flourish for years to come.