Medical Practices: The Advantages of Owning Equipment

December 28, 2018 by CNH Finance, LP in category “Financing”

Frequently, medical practices mull over whether it is more financially sound to lease equipment instead of purchasing equipment to own. The truth is that many medical practices are short-changing themselves by leasing equipment, and closing doors to financing options other than debt-based loans.

Owning Equipment Build Business Equity

When a medical practice leases equipment, they are not adding any value to their business portfolio. Because the equipment is owned by another company, medical practices do not gain any equity, nor do they add any actual assets to their business. This means there is no increase in potential collateral for additional funding, nor is there anything that can be leveraged for debt-free financing. On the other hand, owned medical equipment has an intrinsic value which can be used to increase the amount of working capital available to a practice.

Using Owned Medical Equipment for Working Capital

The equity value of owned medical equipment can do much more than simply look nice on a business profile. Medical practices can use the value of owned equipment to create a revolving line of credit. When combined with other assets, such as receivables, vehicles, property, and more, the asset based line of credit can help cover costs ranging from medical supplies to mergers and acquisitions. The line of credit offers a more viable alternative to loans and similar financing methods because no debt is placed on the books. Medical practices can access the line of credit as needed, and the amount available is renewed every time the balance is repaid, providing a perpetual source of working capital. As medical practices acquire more equipment, the amount of financing available through the revolving line of credit increases. This encourages growth while reducing or eliminating the need for loans. Having a revolving line of credit without the restrictions of traditional bank financing allows medical practices to flourish without feeling trapped under the burden of debt.

At CNH Finance, we specialize in asset based lines of credit for medical practices. Whether you run a private practice, a large healthcare center, or head up a group of practitioners, our asset based lines of credit offer a much more flexible source of working capital than either bank loans or cash advances. Contact CNH Finance today and tap into the hidden value of your equipment and other assets.

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