Office Equipment: Buy or Lease?

Balancing your practice’s needs with financial reality.

To provide your patients with high-quality care, you need to stay up-to-date on the latest advances. And to do so, that often means having the right equipment. You’re familiar with the hefty price tags attached to this equipment, which puts you in the position of having to decide whether to lease the equipment or buy it outright.

Both leasing and purchasing have positives and negatives, and these vary according to the specific equipment you’re considering. Renting is, at least at first, the more affordable option[1], but you need to think about the long term if you can. Here are some factors to help you make the decision.

Some of the pluses of renting versus buying:
• Since you haven’t committed to ownership, you have the option to upgrade to newer technology as it becomes available.[2]

• You can evaluate the equipment as you use it, and change to another brand or model without repercussions. (Note: You should examine your lease agreement carefully before signing it[3].

• Many leases include maintenance as part of the agreement, potentially saving you money and the hassle of finding someone to make repairs[4,5].

• Buying equipment usually involves a time-consuming process of applying for credit[6]. But when you start to consider how long you’re going to have and use this equipment, and how necessary it is to your practice, other issues may come to the fore.

Some of the drawbacks of renting versus buying:
• If this equipment is necessary to run your practice and you use it over many years, you’ll end up paying more in rental or lease fees than you would if you purchased it.[7]

• The equipment won’t count as an asset to your practice should you ever decide to sell.[8]

Keep in mind that much depends on your practice, your ability to qualify for financing and what type of equipment you need. You may have an easier time qualifying for a loan than you anticipate. You might also consider getting the best of both worlds and signing a lease agreement that includes an option to buy. If you choose this option, be sure to examine the agreement carefully.[9]

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Important Legal Disclosures and Information

  1. https://www.sba.gov/content/leasing-business-equipment

  2. http://www.tigerleasing.com/medical.shtml, https://www.sba.gov/content/leasing-business-equipment

  3. http://medicaleconomics.modernmedicine.com/medical-economics/content/tags/buy-equipment/medical-equipment-should-practices-buy-or-lease?page=full, https://www.sba.gov/content/leasing-business-equipment

  4. http://medicaleconomics.modernmedicine.com/medical-economics/content/tags/buy-equipment/medical-equipment-should-practices-buy-or-lease?page=full

  5. https://www.sba.gov/content/leasing-business-equipment

  6. http://medicaleconomics.modernmedicine.com/medical-economics/content/tags/buy-equipment/medical-equipment-should-practices-buy-or-lease?page=full

  7. https://www.sba.gov/content/leasing-business-equipment, https://www.sba.gov/blogs/equipment-leasing-weighing-pros-and-cons

  8. https://www.sba.gov/blogs/equipment-leasing-weighing-pros-and-cons

  9. https://www.sba.gov/content/leasing-business-equipment

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Neither PNC Bank nor any other subsidiary of The PNC Financial Services Group, Inc. will be responsible for any consequences of reliance upon any opinion or statement contained here, or any omission. The opinions expressed in these materials or videos are not necessarily the opinions of PNC Bank or any of its affiliates, directors, officers or employees. Banking and lending products and services, bank deposit products, and Treasury Management products and services for healthcare providers and payers are provided by PNC Bank, National Association, a wholly-owned subsidiary of PNC and Member FDIC.

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