If you are planning to purchase medical equipment for your practice or hospital you may want to consider some of the advantages of leasing medical equipment. There are good reasons why 8 out of 10 U.S. businesses lease some or all of the equipment needed to run their operations. Most medical equipment needs to be replaced in 3 to 5 years. By leasing medical equipment you can avoid technological obsolescence. If you structure the lease term to the useful life of the equipment, you can match  your payment obligations to the period the equipment will generate revenues versus paying for the equipment upfront and mismatching the lump sum payment for the equipment with the revenue stream produced by the equipment.  This will help you protect against the rate of high technology medical equipment depreciation.

There are also potential tax savings depending on the lease structure chosen. In an operating lease, the payment may be expensed rather than capitalized and depreciated like you would have with a traditional loan. The lease payments, unlike the loan payments can be expensed in the period they are paid as a general operating cost. This may result in a lower after -tax cost for the credit, which results in a lower tax liability when compared with depreciating the equipment cost and expensing the interest portion of the loan payment. Of course always check with your accountant or tax advisor.

Remember to match your lease term with your warranty coverage. For example, if you are purchasing a new MRI scanner and it includes 36  months of warranty coverage you can purchase the additional 12 months of coverage and roll it into the lease. This way you have control over your expenses for the use of the asset thoughout the lease term.