Lease financing or cash payment? How to choose the best option for your medical equipment?
In the healthcare sector, having access to quality medical equipment is crucial to providing effective and safe patient care. However, the question often arises: is it better to finance or buy this equipment outright? Each option has its advantages and disadvantages, and the choice depends on various factors specific to your situation. In this article, we’ll explore both options to help you determine the best solution for your business.
The advantages of paying cash for your medical equipment
Direct purchase of medical equipment offers several advantages. Firstly, it allows you to own the equipment immediately, without having to commit to regular payments. This option is ideal for companies with sufficient liquidity, as it avoids the interest and costs associated with financing.
By owning the equipment, you have total control over its use, maintenance and eventual resale. What’s more, purchasing equipment can be a financially beneficial decision in the long term, especially if the equipment has a long service life and its value does not depreciate rapidly.
The advantages of medical equipment financing
On the other hand, medical equipment financing, particularly through leasing, offers great financial flexibility. This option allows you to spread the cost of the equipment over a fixed period, preserving your cash flow for other critical needs, such as hiring staff or investing in complementary technologies.
Financing is particularly useful when you need to acquire expensive equipment, or when rapid technological advances require frequent upgrades. Leasing, for example, makes it easy to modernize your equipment at the end of the contract, by opting for a new lease or renewal with more recent equipment.
How do I choose between leasing and cash?
The choice between lease financing and cash purchase depends on several factors:
- Your current cash flow: If you have enough cash to purchase the equipment without compromising other aspects of your business, buying may be the best option. However, if you prefer to keep your funds for other investments, financing is more appropriate.
- Equipment lifespan: For medical equipment that has a long lifespan and doesn’t require frequent upgrades, purchasing may be more cost-effective in the long term. On the other hand, for rapidly evolving technologies, financing offers the flexibility of staying up to date without having to bear the full cost of each upgrade.
- Tax benefits: Lease payments, such as those made under a finance lease, are often tax-deductible as operating expenses. This can make financing more tax-efficient than purchasing, where only depreciation is deductible.
- Type of equipment: Some medical equipment, particularly that which is highly specialized or customized, can be more difficult to finance. In such cases, outright purchase may be simpler, but for standard equipment, financing generally offers more options.
Whether you need equipment for the opening of your clinic, or to renew your existing equipment within a hospital or specialized healthcare facility, our brokerage and financing specialists will be able to advise you and offer you products tailored to your specific needs.
A 100% online financing application
At Affiliated Financial Services, we know how crucial it is to make the financing process simple and accessible for the acquisition of your medical equipment. That’s why we offer you the option of applying for financing 100% online. You can submit your application quickly and easily, wherever you are and whenever you want. This online solution is designed to provide you with a smooth, stress-free experience, allowing you to focus on what’s important: growing your business.
Affiliated Financial Services, THE reference for medical equipment financing
The choice between purchasing or financing medical equipment depends on your financial situation, the nature of the equipment and your long-term objectives. At Affiliated Financial Services, we understand that every business has unique needs. That’s why we offer a full range of financing solutions to help you make the right choice for your medical equipment.
Contact us today to discuss your options and find the solution that best suits your needs.
