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:
- 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 It’s a good choice for equipment that might become outdated in the near term.
- 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.
- 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.