Navigating the Leasing Process
Once you’ve made the decision to lease new healthcare equipment, the next step is navigating the options available to your organization. Although both the healthcare and financial services industries have undergone significant changes – and changes to certain types of lease accounting are still forthcoming – the process of leasing equipment doesn’t have to be complicated or intimidating.
Following are four questions to ask when assessing which equipment leasing option is right for your healthcare facility. Taking the time to think through these questions can yield great benefits in the financing process. The temptation may be to focus solely on the rate or cost of financing, and while this is certainly important, taking such a posture can leave out other important factors.
- What is the useful life of the equipment to your organization? By understanding how long you plan to use this equipment from the beginning, healthcare facilities can avoid structuring the equipment’s financing beyond its useful life. For example, if you think you may want to dispose of or upgrade the equipment in four years, you’ll most likely want to structure the financing agreement so that after four years it is either fully paid out; gives you the ability to return the equipment and cancel the financing; or allows you to purchase the equipment at a reasonable price.
While you’re considering how long you plan to use the equipment, it’s also a good idea to consider what you’d like to happen with the equipment at the end of its useful life. Many healthcare facilities choose to retain the equipment and put it to use in another, less-demanding role at the end of the lease term. Others choose to dispose of it entirely. With well-structured financing, you may be able to build in the return and disposition options for the equipment upfront.