Evaluate the need for the equipment
Before you get into the finer details of what will work best for your medical practice, it is vital to assess why you need the equipment and what options do you have available to you. Consider setting up a budget of the things that you need to purchase and check to see which ones need to be constantly updated.
This can help you differentiate between equipment that will be better off financed through a commercial loan to adequately cover the costs of keeping your equipment up to date, or whether you will be better off purchasing slightly used equipment. You will also have to consider factors such as your practice expanding or specialised technology that needs to be kept up to date to get the job done. This can essentially help you decide whether leasing or buying your equipment will be the best solution for you.
There are many reasons why practitioners will opt to either buy or lease the equipment they need. According to Equipment leasing and Finance Foundation, 8 out of 10 businesses are likely to lease equipment, while less than 30% of businesses buy it. It’s vital to weigh the pros and cons of each to see which one is most suitable for your practice.
Leasing can offer a more flexible solution when it comes to effectively keeping your equipment up to date. It can be cost effective when it comes to purchasing those expensive items at a low rate and being able to update the machinery with little to no additional cost than buying it new every time. This could also be beneficial for smaller practices that may not have the assets or the start-up capital to purchase the much-needed equipment.
The drawbacks when it comes to leasing is that you could be paying more on the equipment, especially if it is a long loan term. You could also be paying for the equipment even when you are not using it.
Buying obviously has its own perks such as having ownership of the equipment. Therefore, you will be able to make some tax deductions when tax time comes around. It also means that you will have the equipment available to you all the time, and should you no longer need it you can sell it.
The drawback with such an option is that it has some large upfront costs and can be outdated very rapidly. There are also the additional costs of having to pay for the repairs and maintenance of the machinery which can throw a spanner in the works, especially if you use the machinery frequently.
Speaking to a financial advisor can give you a clearer picture of what can work for your practice without compromising your finances.