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Healthcare Equipment Acquisition in an Improving Economy

William G. Sutton, CAE, for HealthLeaders Media, May 9, 2011

The flexibility of equipment financing, especially leases, is another key benefit that can enable customized solutions for a business’ accounting, tax or cash flow needs. Leases are available that allow for seasonal business fluctuations, lower monthly payments while a project is ramping up and the equipment is not yet generating revenue, and other specific circumstances a business may experience.

For healthcare providers thinking in terms of deploying capital, projects can become a choice between one acquisition over another. However, a benefit of equipment finance is the ability to spread the cost over time. So if adding or upgrading an electronic medial record is a priority, for instance, it doesn’t mean having to postpone adding or replacing medical equipment elsewhere in the facility.

Advantages for All Business Cycles

In addition to the market-sensitive considerations that make equipment financing attractive to businesses, there are seven operational advantages that provide benefits in all economic cycles:

1.       Access to Equipment Expertise—Many equipment finance companies have special relationships with manufacturers and distributors. This expertise also enables the best possible lease payment terms since their knowledge and experience with various equipment types allow equipment finance companies to accurately set the residual rate—the value of the leased equipment at the end of the lease term—for your equipment type.

2.       Equipment Obsolescence Management—Funding equipment such as IT, communications and medical/healthcare equipment through leasing, loans or other financing arrangements helps manage equipment obsolescence by enabling updates. Certain leasing finance programs can allow for technology upgrades or replacements, so the risk of being caught with obsolete equipment is lower with leasing than with other equipment acquisition methods.

3.       No-Hassle Equipment Disposal—Financing also allows upgrading without having to manage equipment disposal and other ownership burdens. Particularly with computers and other technology devices, disposal can be a complicated issue, governed by federal, state or local regulations, which equipment finance companies are well positioned to handle.

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