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FAQ's

Q. Exactly, what is equipment leasing?
A. Equipment leasing is basically a loan in which the lender (us) buys and owns the equipment and then "rents" it to you at a monthly rate for a specified number of months. At the end of the lease, you may:

  1. purchase the equipment for its fair market value (purchase option),
  2. continue leasing the equipment,
  3. lease new equipment or
  4. return the old equipment to us.

Q. Who benefits the most from equipment leasing?
A. Any business at any stage of development. For newer businesses with minimal revenues, "small ticket" leases, those of $100,000 or less, are most feasible and evaluated on the personal credit of the business founders or owners.

Q. When is the best time to start leasing equipment?
A. Anytime. Leasing lets you use the equipment only as long as you need it, and then to return it with no further obligation. If the equipment you are considering runs the risk of becoming obsolete before the end of their usable life, leasing may be a good option. Due to the nature of rapid changing technology, some equipment may not qualify for return due to obsolescence. General usage equipment however, may qualify for return at the end of the lease term.

Q. What makes leasing preferable to a loan?
A. You only pay for the usage of the equipment. Unlike bank lines of credit that usually have variable rates, lease payments are fixed no matter what happens in the market. By choosing to lease you won't be a victim of skyrocketing interest rates. Remember the 80's when rates rose from 9% to over 20% in one year? That can't happen with leasing.

Q. Why should you lease your equipment?

  1. Tax treatment: The IRS does not consider certain leases to be a purchase, but rather a tax-deductible expense. Therefore, healthcare providers may be able to deduct the lease payments from income, thus reducing the net cost of the lease. (Always consult with your tax advisor)
  2. Flexibility: As healthcare facilities grow and needs change, the business may be able to add or upgrade technology at any point during the lease term.
  3. Flexible end-of-term-options: There are typically three flexible options at the end of a term.
    i. return the equipment,
    ii. purchase the equipment or
    iii. extend the lease for an additional period of time.
  4. Easier financing than loans: With a lease, healthcare providers can avoid requirements like compensating balances, large down payments, client list reviews and cash-flow projections, making the finance process faster and easier.
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