If there ever was a time that a qualified eye health professional could hang up their ophthalmoscope and wait for the customers to roll in, that time is long past.
The enthusiastic adoption of online shopping, and aggressive marketing campaigns by the optical giants requires independent practitioners to develop a point of difference.
New equipment can be expensive, so you want to make sure you’re making the best decisions for your practice and your patients.
First, make sure you have a clear picture of your future plans for your business. Will the equipment you’re purchasing cater for your future growth plans?
As the equipment is used for professional purposes you may be entitled to claim the interest payments as a tax deduction, plus you can also depreciate the value of the equipment…
Think of the layout of your practice. Decor is the first thing your patients see – and first impressions last. Will your new equipment fit into your existing space or will you need to change your layout?
Consider the potential to market your investment – will you be able to explain the benefit to your patients? How will you market your new equipment to your existing and new patient base?
Set a budget. How much are you going to spend? Where will the money come from? Understanding that there are options available for you to fund the purchase of optometric or ophthalmic equipment is
of the utmost importance.
The right equipment is an asset to the ongoing growth of your practice. It gives you the ability to improve the quality of treatment you give to your patients. By choosing the appropriate financing method to suit your circumstances you may also be able to maximise your financial return and leverage savings through various channels.
Medical finance expert Barry Lanesman, from Investec Specialist Bank which has more than 20 years’ experience working with medical professionals, outlines the three common options for purchasing equipment.
Cash
“They say “cash is king” and if you buy something outright then you don’t need to worry about interest payments or complex tax implications. However, by investing all your cash outright in your equipment it will take you longer to recover that investment and you may lose the opportunity to use your cash more efficiently by investing in other growth assets,” said Mr. Lanesman.
Chattel Mortgage
“Chattel mortgages orasset purchase agreements are common financing arrangements. Essentially, you purchase the equipment with the assistance of a financial institution then pay back the loan over the period of the agreement.
“As the equipment is used for professional purposes you may be entitled to claim the interest payments as a tax deduction, plus you can also depreciate the value of the equipment for its lifetime. The exact depreciation amount claimed each year depends on your self-assessment, tax advice and the chosen depreciation method, so it is important to get the advice of your accountant when setting this up.”
Lease
“A financial lease means that the finance company is the legal owner of the asset throughout the duration of the lease. However, the lessee has control over the asset providing them the benefits and risks of (economic) ownership.
“Rather than claiming depreciation as an expense, the entire lease rental (principal and interest) becomes tax deductible.
“To understand your options and make an informed decision you need to speak to a professional with experience in financing for healthcare professionals,” said Mr. Lanesman.
Disclaimer
The information contained in this article is general in nature and has been provided in good faith, without taking into account your personal circumstances. While all reasonable care has been taken to ensure that the information is accurate and opinions fair and reasonable, no warranties in this regard are provided. The opinions expressed in this article do not necessarily reflect the opinions of the author or Toma Publishing or its subsidiaries.
