Right time to buy
Current government incentives could make it the perfect time to purchase new equipment for your practice.
Learn MoreThe speed at which medical technology advances means it’s more important than ever to remain ahead of the pack.
Offering precise and efficient patient care is the number one priority of all medical specialists. However, even with a top-flight education and decades of practical experience behind you, achieving the best possible outcome for your patients is rarely possible without access to state-of-the-art diagnostic or treatment-focused technologies.
Simply put, the use of the right equipment has the potential to save lives through improved performance and increased accuracy.
Nevertheless, whether you’re a cardiologist, a gynaecologist or an ophthalmologist, obtaining access to assets such as magnetic resonance imaging equipment or hemodynamic recording devices requires significant capital investment.
This presents a financial hurdle that even in the most prosperous of years, can prove tough for many small practices to navigate.
Strange times
The past 12 months or so has been anything but typical and for this reason, many financial experts agree that now is a good time to consider financing equipment upgrades.
The reasons for this are varied, but essentially it is because the end of the financial year offers a number of attractive tax incentives for those medical specialists willing to bite the bullet, while there are also deals to be done with equipment suppliers looking to offload product before June 30.
It is worth noting that there are a few disadvantages to be had for medical professionals seeking to hold on to old or out-dated equipment in their clinics. According to BOQ Specialist’s Senior Finance Consultant, Melinda Goddard, not only does older equipment cost more to maintain and repair, there is a good chance it will no longer be under warranty in the event it malfunctions. “It’s prudent to consider investing in new equipment and leading edge technologies because it enables specialist practices to be more agile and responsive to client demands,” says Melinda “Not to mention it will result in increasing efficiencies and productivity while affording your practice the opportunity to gain a competitive advantage.”
Looking after your bottom line
In making a conscious choice not to invest in capital expenditure, you may be limiting potential growth—a move which may impact your bottom line.
However, by far the biggest risk medical specialists take in failing to regularly update existing assets is the fact they are no longer offering the best in patient care, Melinda says. “This is because technology evolves so quickly. Take for example, obstetrics and the advances in ultrasound over the years. The old ultrasound machines were so different to the ones that you get today. Even things that we now take for granted such as picking up genetic abnormalities or testing of nuchal folds —these weren’t available 10 or 15 years ago.”
Acquiring the latest diagnostic equipment also shows your current patients you care about their health and wellbeing, and have the necessary means to meet their needs, says Melinda.
The benefits of investing
Another significant consideration is the potential tax benefits to be had from investing in new equipment before the end of the financial year on June 30.
Conscious of the toll paid by many medical specialists as a result of the COVID-19 pandemic, the Federal Government is doing its bit to help make things easier for medical specialists, along with other businesses, to invest back into their practices.
The Government has introduced a number of financial incentives aimed at supporting the recovery of the country’s economy, with medical specialists hit especially hard by intensifying cost pressures and decreased revenue as a result of deferred or cancelled appointments.
Government incentives
The Government incentive that is likely to be of most interest to medical specialists is the temporary full expensing scheme, which allows businesses with a turnover of less than $5 billion the opportunity to instantly write-off the purchase of certain new assets, rather than over their effective life.
The Australian Tax Office (ATO) says it is applicable to eligible assets acquired and first used or installed ready for use from 7.30pm on 6 October 2020 until 30 June 2023. The tax deduction is claimed in your tax return for the income year that the asset is first used or installed ready for use for a taxable purpose.
The ATO says there is no limit on the number or value of eligible assets on which you may claim the full tax deduction.
With specialist medical equipment costing anywhere from $1,000 to $1 million-plus, Melinda says that it is important to investigate all the finance options available to you ahead of any potential purchase or upgrade. “This is to ensure that you are able to pay for equipment upgrades over time in manageable instalments,” she says.
Finance options
Chattel mortgage is the most common type of facility used to finance capital investments such as these, and eligible assets purchased using this type of facility can avail of the temporary full expensing incentive discussed above. Other finance options include finance lease, rental, operating lease, or paying cash outright, however where assets are financed through a lease or rental agreement, the lessee will generally not be eligible for the temporary full expensing deduction.
Melinda recommends seeking professional advice when deciding which finance option is right for you. “Because each situation is different, medical specialists considering purchasing new equipment or undertaking significant upgrades to existing offerings, should first discuss this with their financial advisor. They will help determine which is the best option for your unique set of circumstances,” says Melinda.
To make the most of the temporary tax incentives take a look at our equipment finance options, or contact one of our financial specialists today on 1300 160 160.
