Accessing Medical Equipment Financing for Your Practice
Traditional equipment financing and leasing programs might accommodate medical equipment for your practice, but they are not built around it. Why is that important? Well, for starters, medical equipment has its own unique maintenance and calibration needs, and the proper function of a medical device is almost always higher stakes than a single piece of equipment working correctly in another workplace. There’s also the fact that medical equipment financing is built to reflect the unique economics of the healthcare sector.
How Equipment Financing Works
If you have never financed business equipment before, it is a lot like financing a vehicle, just with a couple of key differences. Financing for business equipment tends to require a little lower down payment than most personal auto loans prefer and the interest rates are often just slightly higher. One strong similarity, though, is that the right financer can work with you on loan terms and rates to put together a deal that suits the down payment you can afford.
Once the combination of money down, interest, and length of the loan are negotiated, the final medical equipment financing instrument tends to be an amortizing, fixed-rate loan for the term. Of course, that is not the only option. Some financing companies also offer leasing programs, and sometimes they are the best choice for a device acquisition.
Leases vs. Loans: A Comparison
Leases tend to have comparable monthly costs but only a small up-front finance charge, as compared to the flexible but usually substantial down payment cost for a loan. The biggest advantage, though, is that you do not own the machine. If you want to upgrade it, you just decline to renew and then lease another one for comparable overhead costs. When you pay taxes, you have no depreciation to calculate and the lease is a cost of business, not a loan to invest in assets. These key differences make leasing a great idea when you only need a machine temporarily or when you see yourself upgrading frequently.
Learn More About Financing Options
Since medical equipment financing tends to be built around the needs and income of individual practices, the best way to learn about your options is to talk to a financing representative. They can talk you through the flexible range for the down payment and term options, and they’re also able to tell you how the interest rate is likely to be affected by various choices. That can help you figure out whether a loan or lease application is the best choice for financing new equipment at your practice.