Why Healthcare Providers Use Leaseback Financing

Leaseback financing is frequently overlooked as a means of getting short-term working capital without going into debt.

What Is Leaseback Financing?

Instead of taking out a traditional loan, leaseback financing is structured around the equipment owned by healthcare providers. Medical equipment is appraised, and then “sold” to the company providing the leaseback financing, and used for short-term capital. However, the equipment does not go anywhere. Healthcare providers still get to keep and use their medical equipment to render services to patients. Providers simply “lease back” the equipment from the financing company with manageable monthly payments until the financing is repaid.

How Is Medical Equipment Evaluated?

When getting leaseback financing, medical equipment is rated using a number of factors. First, finance professional look at the age of the equipment. More recent models will usually fetch a higher value than outdated ones. Second, the condition of the equipment is taken into account. A newer machine with a lot of wear and tear might have a lower value than an older model in pristine condition. Third, the specialization is considered. Equipment and tools which have more specialized uses usually yield a higher value than equipment that is easy to acquire.

Is Leaseback Financing Just For Big Hospitals?

The simple answer is no. Healthcare providers of all sizes can take advantage of leaseback financing. The only requirement is that the practice has equipment, and that the equipment is owned. Equipment that is currently being leased is ineligible, because it cannot be leased twice, and would violate most equipment leasing agreements.

Tax Advantages For Healthcare Providers

Sale leaseback financing offers tax benefits for healthcare providers. When equipment is leased, any payments made can be deducted up to an amount of $500,000. Leaseback financing falls under these provisions, which means healthcare providers can claim big savings when filing taxes.

Get The Working Capital Your Practice Needs

Whether you are a specialized private practice or you own a healthcare center, Vantage Commercial Capital has the working capital solutions you need. Whether you need short-term capital to meet financial obligations, or capital for growth and improvements, our leaseback financing program can help. Contact our offices today. Our team will work with you directly to structure a financing solution that is customized to fit your needs, and help you reach your goals.