What’s the Difference between Medical Equipment Financing and Leasing

Whether a small private clinic or a large hospital, leasing has turned out to be an increasingly renowned way of getting medical equipment. In fact, industry experts say that the healthcare equipment leasing market will rise at a CAGR of 6.77 percent through 2021. In this post, you will have a glance at whether leasing or financing medical equipment centers is best suited for your requirements. 

How does medical equipment leasing work?

Leasing medical equipment works in the same manner as leasing an automobile. By getting a lease, you have the right to use the equipment without a load of ownership. 

In the medical device market, the standard lease term is between 3 & 5 years. At the end of the primary term, you have the choice to buy, renew, extend, or return the equipment. Being a technologically driven sphere, leasing medical equipment usually proves to be the most financially efficient way to make sure your practice has up to date equipment without investing significant capital. 

However, a possible drawback of leasing medical equipment is that, over an extended period of time, the continued rental payments may surpass the expense of a direct buy. 

How does medical equipment financing work?

Equipment financing refers to the practice of taking a loan to pay for the equipment over time. By selecting to finance equipment, you will ultimately own the asset immediately. This works well for companies with solid credit or for assets with a long lifespan. 

Financing is popular, in part, because of the limited capital budgets. While the majority of equipment financing is collateralized debt, the loan sum may impact your accessible line of credit. Since medical devices like MRIs and CTs can cost several hundred thousand dollars, the best practice is to work closely with your financing associates. 

Another aspect of financing is the extra interest cost. Debt source & your credit will decide the interest rate which should be added into the total cost of ownership. 

The expansion of the equipment leasing and financing industry reflects how operating budgets are being examined and stiffened across the industry. Which choice is correct for your requirements will rely on what sort of equipment you need & its intended use. Take into account equipment leasing if you require flexibility & wish to conserve capital. Take into account financing your equipment if you eventually wish to own the equipment immediately. 

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