For those that are in the medical industry, having access to all of the best equipment is very important. However, since the type of medical equipment is constantly changing, keeping up with the competition can be a challenge. While it can be expensive to pay for this equipment out of pocket, another option to consider is to finance your equipment. There are several benefits that come when you get financing for your medical equipment purchases.
Improves Cash Flow
One of the main benefits of financing your medical equipment purchases is that it can improve your cash flow. If you feel the need to buy new equipment on an annual basis, you will quickly find that it can be very expensive to do so. For many medical practices, this can end up being a cash expense that they cannot afford. In these situations, you would be much better off financing the equipment. While you will have a monthly bill that you need to pay, you also will not have to dip into your cash reserves, which will greatly improve your cash flow position.
Tax Benefit
Another benefit of financing your medical equipment is that you can receive a tax benefit. When you purchase equipment out of pocket, you will not incur any ongoing expense. While this can be good from a monthly cash flow perspective, you also will not receive any tax benefit. When you choose to finance this equipment, all of the money that you spend on rent will be considered an operating expense. This will directly reduce your net income as a business owner, which will allow you to see a reduction in your tax liability.
Repair Assistance
Another advantage of financing your medical equipment is that you can get help if you are in need of repair. When you finance the equipment, someone else will own it until the financing is paid off. Along with the rental payment, you will also likely get assistance with repairs and replacements when necessary. This can provide you with valuable protection that you likely will not get when you choose to purchase the asset and equipment in cash.
End of Lease
Once your medical equipment financing term is over, you will have a number of options to choose from. One option would be to upgrade the equipment and then enter into a new lease. Another option would be to purchase the equipment that you were previously leasing. These options provides you with great flexibility that can help you to make the best business decision for your organization based on the changes in technology, state of your business, and a variety of other factors.
