When you finance your equipment, you will own outright whatever you purchased with the borrowed capital. Ownership can have immediate tax advantages for you and your practice. Based on current (2004) tax laws, under Section 179 ownership allows the buyer to expense in the first year up to $102,000 of the cost of qualified new equipment placed in service during the tax year, with progressively higher amounts, adjusted for inflation through the tax year beginning 2007. The remaining cost, for equipment acquisitions in excess of $102,000, is depreciated over 3, 5 or 7 years depending on equipment/software type. This business expensing deduction will reduce your tax liability by increasing your tax deductions, thus reducing your taxable income.

If you choose to lease your equipment, you may be in a better position to step up to the very latest in technological advances as they become available. You will have the use of the equipment that makes you productive, while preserving your savings and working capital. Over-extending your finances by purchasing costly equipment may depleted your cash. This can leave your practice vulnerable to the whims of the economy. Moreover, this lack of liquidity can also prevent you from taking advantage of timely investment opportunities. By leasing you can use the equipment you need without reducing your borrowing power and since lease payments are generally regarded as fully deductible expenses, leasing may be a wise choice with solid tax advantages.

If you are interested in lease financing, various lease structures are possible, from the traditional $1.00 buyout (financial lease) and 10% fair market value option (operating lease for tax purposes), to step leases, etc. All of the following leasing companies are active in the ophthalmic industry and have worked with us: