How Leasing Helps Clinics and Practitioners

State-of-the-art equipment is a way to outshine the competition. New usually means faster, more effective, and more efficient. Plus, hopefully, less maintenance and limited downtime. Whether it’s replacing existing outdated kits, or venturing into new treatments, clinics that embrace the latest technologies can help them stay ahead in the race.

Naturally that comes at a cost. However leasing is a good alternative to outright purchase. 

A leasing expert

Helen George has spent more than 30 years in the UK leasing industry. Using her insider knowledge of how lenders generate their profits she helps deliver cost savings to consultants and clinics. Here she outlines seven of the main benefits of leasing equipment, and what to look for in a provider.

1. It’s tax-efficient

For almost all businesses, lease rental payments can be offset against taxable income. Plus, as VAT can also be reclaimed, the overall acquisition cost can be significantly reduced.

2. It cuts waiting

With a lease, you pay a relatively small amount upfront – usually equivalent to a periodic rental payment – rather than having to wait until you have all the funds in place.

3. You profit while you pay

Once the equipment is in, you are ready to start earning money from it. Revenue to help, perhaps even cover, the leasing payments.

4. Get better vs. cheaper

Leasing allows you to spread the cost and to choose the highest quality or enhanced version of equipment, rather than simply the cheapest option.

5. Protects credit lines

A lease secured on equipment keeps precious lines of credit (bank loan, overdraft facility, etc.) protected, should you need money in a hurry.

6. Staff utilisation

When you’ve invested in a great team, you need to supply them with the best tools and technologies, and leasing helps you deliver these without costing too much.

7. Upgrades

Many lessors will allow you to upgrade equipment during the term of the lease. If you have made a significant number of payments, this may hardly impact the regular outgoing.

How leasing is policed

Naturally, you will check that any prospective equipment vendor can fulfil your agreement with them and stick around to honour any guarantees. With leasing, any competent funder included in the deal will also have undertaken ‘due diligence’ on the supplier. So, essentially, double the comfort. UK leasing companies are highly regulated by the Financial Conduct Authority (FCA). Only use a leasing provider authorised by them and relax knowing that the weight of the law is on your side.

Be wary

With a business loan, the Annual Percentage Rate (APR) is a simple way to benchmark a good deal. When it comes to a lease, additional factors such as creditworthiness and risk, equipment depreciation and residual value, agreement term, insurance, maintenance costs, etc. will all contribute to the costs. There is no APR for leasing as such, and so, for the uninitiated, calculating if it is a good deal can be tricky. It makes sense therefore to comb through the Ts and Cs. and to check with your accountant or an external leasing expert.

Leasing may not be perfect for all businesses. For example,

• Those with poor credit ratings or with no credit history may struggle to find a funder to accept them.
• Those who prefer to “sweat the asset” and avoid replacing or upgrading to new technology until it wears out.
• Firms that are cash-driven and averse to paying interest, prefer to see an asset on their balance sheet.

To find out how leasing could benefit you, or if you have existing leases you think you may be paying too much for, Helen can help.

For a limited time, she is offering a free lease audit to readers.

Check her out on www.hlgconsultancy.co.uk or call her on 07785 318193 for details.