NEW YORK, June 15, 2011 /PRNewswire/ -- Advances in medical technology offer many advantages to today's physicians, but equipment is evolving so rapidly that practitioners need to think twice before purchasing it outright. Leasing presents an attractive alternative, but only to those who fully understand both its potential benefits and risks and then leverage that understanding during an informed and productive negotiation, writes Raymond W. Dusch, a partner in the New York City office of LeClairRyan, in an article in the May 25, 2011 edition of Medical Economics, titled, "Leasing Office Equipment Offers Advantages Over Purchasing (Beware of the Fine Print)."
Premature obsolescence is one of the obvious risks of purchasing expensive medical equipment outright, but there can be an immediate financial downside as well. "In financing the purchase through a bank, medical practices typically are forced to pay fees on their lines of credit or to make down payments of 20% to 30% of the loan," Dusch writes in the article. The lack of flexibility in loan terms common among banks lately and widespread use of multiple liens may also curtail a practice's future borrowing options.
In contrast, organizations that might have trouble qualifying for a bank loan often are able to lease equipment with relative ease. One reason is because leasing companies have considerable security n the equipment itself, Dusch points out. "They (leasing companies) also evaluate prospective deals based on the cash flow of lessees' businesses. Knowing that physicians tend to have steady cash flows, leasing companies offer robust menus of financing options for medical equipment," he writes.
Along with easier access to the latest equipment, Dusch notes that leasing offers other advantages to medical practices, including:
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