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Myth: Leasing will use my lines of credit
Fact: Not so.---Leasing your equipment has no impact on your bank credit lines. It protects your borrowing power for other business needs or opportunities. Whereas, purchasing the equipment will show a debt obligation on your credit report, thus altering your ability to borrow.
Myth: Leasing Equipment obligates me to long term contracts.
Fact: Not so. Healthcare and Medical technology is changing at a rapid pace. What meets your business' needs today may become obsolete tomorrow. Leasing can eliminate equipment obsolescence. Leasing the equipment allows you the flexibility to maintain a competitive edge by giving you today's best technology and allowing you to upgrade when the equipment has outlived its useful advantage.
Myth: Leasing payments are variable.
Fact: You will have fixed payments throughout the term of the lease Unlike bank lines of credit that usually have variable interest rates, lease payments are fixed no matter what happens in the market. By choosing to lease you will prevent yourself from becoming a victim of skyrocketing interest rates.
Myth: Leasing is bad for my business.
Fact: Traditionally, protecting cash flow has been the primary reason for leasing, since a practice can use a leased asset to generate revenue with little to no money down, and pay for it over time. The lessee (doctor) may also be able to take advantage of tax breaks in the form of lower lease payments. What motivates a company to lease equipment? Increased cash flow, favorable tax treatment, convenience, and sometimes, off-balance-sheet accounting treatment. The convenience of leasing equipment quickly, and not having to worry about certain maintenance issues, has always attracted smaller, less-capitalized healthcare businesses to leasing, and off-balance-sheet treatment of assets has been viewed as a benefit for some, although it has never been a prime motivation.
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