Determining what type of medical equipment to outfit your facility with can be overwhelming; don't let worrying about medical leasing be as frustrating. Staying current with any changes to financing options or the economy can help you obtain that specific piece of machinery you've been eyeing.

When you're finally ready to hire medical equipment leasing companies, have all the news available. It's best to have more information than not enough. Consider the following when examining the changes with medical equipment leasing news and trends:

1. Research online any information available on medical equipment financing changes.

2. Locate publications that discuss medical equipment loans, and pay attention to their leasing options.

3. Join associations or organizations to network with others looking for healthcare equipment financing.

Action Steps
The best contacts and resources to help you get it done

Stay current with changes regarding financing for medical equipment via online sites

The healthcare industry is a large one, so it may be difficult to digest all the information available regarding medical equipment. Try your best to stay informed about any changes in the industry regarding financing.

I recommend: GCR Capital posts news-based articles about leasing equipment. Search through its archives to find whatever information you need. Leasing News provides frequent updates to all aspects of the leasing industry. By digging a bit, you can find information regarding leasing medical equipment. Look to DOTmed.com, which is an industry leader for healthcare professionals and medical equipment manufacturers. Frequently updated, you can search through the site to find specific news on medical leasing.

Read publications based on medical equipment vendors

Medical publications are valuable sources to help you stay informed about any changes in how to finance medical equipment. Familiarize yourself with loan practices and standards as well as leasing options provided by numerous companies. This way you can compare the pros and cons, helping you decide which company is the right fit for your business needs.

I recommend: Medical Dealer Magazine serves more than 200,000 medical professionals wanting to learn more about equipment, supplies and services offered by dealers. Check out the leasing options to learn more about what it has to offer. Subscribe to the Healthcare Finance News from MedTech Publishing either through regular subscriptions or through its RSS feed.

Join associations or organizations based on medical leasing

Organizations are a resourceful way to network with others interested in similar aspects. Become a member of so you can ask questions or share tips with other members in similar positions. Certain organizations may also sponsor conferences and send newsletters to keep members informed.

I recommend: Join the Equipment Leasing and Finance Association, where you obtain a directory listing of other members. This is an ideal way to network and find the best deal possible. Look into the Healthcare Financial Management Association and its 35,000 members to assist with any medical financing questions you may have.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Go straight to your medical equipment vendors and ask with which financial companies they work. Do research to see if the financial company may be better than any other option you've found.

Sometimes it’s more cost effective to lease medical equipment than to purchase it. For example, medical equipment leasing might save money in the long run if you expect a particular device to become technologically obsolete in the next few years and you want to ensure that you continue to use state-of-the-art equipment. It can also make sense to lease medical equipment if you don’t have the cash for a down payment on extremely expensive equipment that your medical practice requires.

Among the most common medical equipment lease financing options:

1. A true lease (also called an operating lease). Your lease payments stay the same during the life of the lease. When this medical equipment lease ends, you return the equipment to the leasing company. It’s a good choice for equipment that might become outdated in the near term.
2. A fair market value lease. When the lease period ends, you can purchase the equipment for its fair market value. If you expect the equipment to remain useful to your practice, this type of medical equipment lease financing can be a smart option. Just make sure that the fair market value is written into your lease contract.
3. A $1 purchase option lease. You can buy the equipment at the end of the lease term for $1, with no additional charges. The IRS treats medical equipment rentals of this type like a loan so you can claim depreciation and interest expense deduction.

Action Steps
The best contacts and resources to help you get it done

Consult experienced medical equipment leasing companies

Look for medical equipment leasing companies that understand the technology and have good relationships with medical equipment manufacturers. When in doubt, ask the equipment manufacturer for a referral.

I recommend: Leaf Financial Corporation, Bankers Healthcare Groupand Henry Schein offer multiple medical equipment leasing options and experienced lease consultants. To brush up on equipment leasing terminology, consult the Equipment Leasing and Finance Association’s equipment leasing glossary.

Check directories for more medical equipment leasing companies

There are scores of leasing companies that provide medical equipment rentals. Save yourself from hours of web surfing by consulting a directory.

I recommend: Locate members of the Equipment Leasing and Finance Association of America who offer medical equipment lease financing by consulting the organization’s directory. MD Publishing also offers a list of medical equipment leasing companies.

Lease medical equipment directly from the manufacturer

Many medical equipment manufacturers offer their own medical equipment lease financing programs.

I recommend: Among the many equipment vendors that will lease medical equipment directly to healthcare professionals, are Philips, GE Healthcare and Steris.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  When calculating the potential financial benefits of leasing medical equipment, take into account the additional personnel and supplies you may need to operate the equipment.
• •  Check your medical equipment lease agreement for so-called 'evergreen' provisions. For example, if you decide not to purchase the equipment at the end of the lease but you don't give the leasing company enough notice, you could be obligated to continue leasing the equipment for several more months.
• •  If you don't have insurance for the equipment you're leasing, the medical equipment leasing company may include an insurance premium in your monthly payment total. They may also charge you an administrative fee. Confirm that the fee is reasonable.

By leasing medical equipment, you have the option of maintaining a top-of-the-line health care facility. By doing this, you minimize the risk of patients transferring to other facilities for treatment.

As with any business decision, there are several factors to consider when pricing a medical equipment lease. Set a budget for the monthly lease payments to make sure it does not affect your company's bottom line. When examining the medical equipment leasing basics, consider the following:

1. Go straight to the source, and secure financing for medical equipment from lenders who specialize in leasing equipment.

2. Apply for loans from banks to finance medical equipment.

3. Consider medical equipment leasing companies that let you lease to own.

Action Steps
The best contacts and resources to help you get it done

Search for leases from lenders who specialize in medical equipment loans

Pay particular attention to companies that specialize in medical equipment loans and leases; these businesses know the industry well enough to answer any questions you may have. Look to spend several thousand dollars to outfit your facility with any high-end machinery you may need.

I recommend: First City Capital prides itself on leading the country in equipment leasing. Through its application system, you have access to a loan up to $250,000. Look to LeaseSource and its options for medical equipment and software. It prides itself on possibly structuring the lease so your company can benefit from Medicaid reimbursement. Bullseye Financial Services has been in business for more than 20 years and can provide leasing options for medical equipment. It doesn't require financial statements for transactions up to $150,000.

Apply for financing from lenders to secure medical equipment financing

Go straight to the source of the money, and apply for a lease through financial companies. You can have access to more money this way, up to several hundred thousand dollars. But be wary that interest rates may fluctuate, forcing you to pay more through your loan. If the Federal Reserve raises rates, then you may need to pay more interest.

I recommend: Look to Sovereign Bank and its financing options for those in the medical industry. Customize a plan that works for you, whether you're interested in new or used equipment or if you need a plan that has terms up to 72 months long. U.S. Bank has a business equipment financing plan for those looking for equipment ranging from $5,000 to $100,000.

Look to lease-to-own medical leasing options

Lease-to-own options are ideal if you don't have the funds available currently, but you'd like to own the medical equipment someday. This is also a good idea if the equipment you're interested in doesn't depreciate in value too much; you don't want to spend large sums of money on equipment that won't be worth much. That defeats the original purpose of leasing vs. buying. Look to spend extra money if you end up purchasing the equipment; check with the lender to see what options are available.

I recommend: First Financial Funding offers a lease-to-own financing option where you can own the equipment for an extra $1, $100 or 10 percent, depending on the state in which your business is located. Continental Health Equipment provides lease-to-own options among its many financial solutions to business owners.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  When you lease medical equipment, you may be able to claim the entire lease payment as a tax deduction. Check with your tax adviser to see if this is true in your case.

Medical equipment leasing involves the rental of tools needed by hospitals and physicians. If a practice’s medical equipment becomes outdated, a leasing program allows for a low-cost upgrade with little overhead.

Different types of medical equipment can be leased, including imaging equipment, diagnostic tools, non-disposable lab supplies and more. Medical equipment leases involve making a monthly payment to cover operating the equipment and potentially buying the equipment at the end of the lease term.

Action Steps
The best contacts and resources to help you get it done

Cash flow

You're likely to hear the term cash flow tossed around frequently when looking at medical equipment leasing providers. Cash flow involves keeping cash on hand instead of paying to own pricey equipment. Conserving funds allows a business to thrive by not going into debt for medical equipment purchases.

I recommend: First City Capital lists and details the advantages of medical equipment leasing, including improved cash flow.

National Association of Equipment Leasing Brokers

The National Association of Equipment Leasing Brokers is an organization where you will find providers of medical equipment financing. This organization provides leasing educational materials to their members in order to help them thrive in the market.

I recommend: The mission statement on the site of the National Association of Equipment Leasing Brokers explains the organization.

True lease

One type of medical equipment lease is what is known as a true lease. A true lease involves the operation of equipment and the return to the supplier at the end of the lease terms. No buy-out option is offered.

I recommend: Business Finance explains true lease and explains this option when compared to a loan for medical equipment.

Synthetic lease

Another type of medical equipment lease is a synthetic lease. A synthetic lease allows you to claim the medical equipment as an expense for tax deduction purposes while still appearing as a lease for your accounting department.

I recommend: Get an overview of a synthetic lease from All Options Equipment, a provider of medical equipment leases.

Lease term

The terms of the lease will affect how much you will have to pay each month for the medical equipment. Longer leases will have a lower payment rate, but the pieces of equipment are likely to depreciate by the time the lease agreement ends.

I recommend: LeaseIdeas has a glossary definition on lease terms and how these terms affect the type of equipment lease that you choose; its business/industry section discusses lease terms for medical equipment.

FICO scores

FICO scores will often be used by a company to determine eligibility for a medical equipment lease. FICO scores are your credit score, typically between 330 and 880, that reflect your credit history. Higher FICO scores will more likely be approved for medical equipment leasing options.

I recommend: Look at the Credit 101 page at Five Point Capital to see how FICO scores are calculated, then click on the medical equipment link at left for lease program information.