Deciding Between Financing and Leasing Equipment

Nowadays, most healthcare facilities are advocating for better patient services with the advantage of reduced operating costs. Over the next decade, health professionals believe that there will be an increase in healthcare costs with an estimate of up to $66 billion.

As a result, hospitals are now considering the impact of bringing in new equipment. The challenge here is often on the cost since there is a need to put in a lot of money.

What are the Different Financing Alternatives?

Sometimes hospitals benefit from donations and grants that seek to help fund the acquisition of new healthcare machines. If these extensions are not available, these hospitals must then figure out new ways to make the payments. Some of them often go for the loan or lease options, both of which are discussed below.

Loans

Essentially, a loan awarded to a hospital is used to cater to all the costs of bringing in new equipment. Numerous loan options are ranging from banks to online loan facilities. The key detail about this option is that the machines serve as collateral.

This means that the hospital will only make a small initial payment, usually as a percentage of the whole amount. Payments are spread out across the machine’s lifespan and are easily manageable. There is also a depreciating tax advantage extended to hospitals to make the repayment as smooth as possible.

Leasing

You could think of leasing to be similar to renting. In this case, a hospital only pays a specific amount each month with a lower premium than a loan option. As soon as the contract runs out, the hospital has the chance of acquiring the equipment permanently or terminate the arrangement.

The good thing about leasing is that there is no need for a down payment. Acquiring equipment permanently is subject to the agreed terms and may vary in line with the requirements.

Before deciding on any of these financing options, it is best to go over each alternative’s pros and cons. Be sure to contact Whitefish Funding today to get a better perspective on equipment financing.