The adoption or upgrade of an EMR (electronic medical record) is a major investment for a medical practice. The type or types of financing that a practice chooses can be paramount to a successful return on investment of an EHR. There are a number of financial options available to fund this investment. The best option will depend on your practice finances, cash flow and other factors, including your creditworthiness and whether you are new to practice or close to retirement.
The following options all have benefits and disadvantages. Financing your EMR software and EHR hardware purchases does not have to be an either/or proposition. A physician can use a combination of financing methods to provide optimal solutions.
Please click a financing method below to learn more. You can also contact 4Medapproved today to have a more detailed discussion about your options.
SIGNIFICANTLY! The 'Tax Relief Act of 2010' signed 12/17/2010, extends Section 179 Deduction as well as expands Bonus Depreciation thru the 2011 tax year. Section 179 limits were increased by the 'Jobs Act of 2010' on 09/27/2010 – allowing businesses to write-off up to $500,000 of qualified capital expenditures subject to a dollar-for-dollar phase-out once these expenditures exceed $2 million. Read more on this deduction by visiting http://www.section179.org.
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Request a more detailed discussion regarding leasing and financing options by contacting us today.
The advantage to outright purchasing of an EHR is the benefit of ease and time spent in comparison to lease or bank financing solutions. An outright purchase avoids interest costs and leaves credit lines open in the case of emergencies.Hardware purchases up to $500,000 qualify for significant tax savings under the section 179 deductions.
A bank loan in which a borrower is given a set amount of funds from a banking institution with a fixed interest rate and a typical loan timeframe of 3 to 5 years allows the borrower to own the system outright upon payment in full.
A line of credit is a revolving loan typically used to finance short-term or seasonal expenses. Like a credit card, the borrower only pays interest on outstanding balance and can "charge" up to a pre-defined amount.
There are a number of different types of leases that vary according to the terms and which will fit particular needs.
Finance Lease/Conditional Sale Agreement is traditional fixed term equipment financing. At the end of the term, the property can be purchased for a nominal amount, such as $1.00. This lease is a full-payout, non-cancellable agreement, in which the lessee is responsible for the maintenance, taxes, and insurance.
True Lease is one that the lessor assumes the residual risk of equipment value and obsolescence so the monthly payments are lower than a finance lease. Typically, the payments are tax deductible.
Operating Lease is a short term lease, 3 years or less, often used with technology. Similar to a true lease, the lessor assumes the residual risk associated with asset ownership. This allow for a lower (usually tax deductible) monthly payment.
Advantages - Click to view our Advantages of Leasing Guide
ASP, also known as SaaS EHR (Software as a Service), or Web-based EHR is the option to lease the software license on a subscription basis. This method is internet-based and allows users to access the EHR software without the costs associated with ownership.
For more information on stimulus incentives for EHR implementation, visit our HITECH reimbursement page.
Last Updated: May 14, 2013
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