How to Purchase Equipment

1. Introduction
Many equine veterinarians purchase a piece of equipment because it is something they “want.” It is a new “toy” for them. What is often overlooked is if the purchase is going to improve the profits of the practice. This session will teach the attendees how to properly purchase a piece of equipment.

Step 1: Is the equipment going to generate a profit? (Fig. 1)
Step 2: Is it better to buy or lease the equipment? (see purchase option versus lease option)

• If you are buying, are you able to pay cash or will you need to borrow?
• Do you have the ability to borrow?
• Purchasing usually requires a down payment, whereas leasing often does not. Can you afford the down payment?
• Can your practice cash flow the monthly payment in either scenario? Lease payment terms are generally more flexible.
• What is the difference in costs of borrowing versus leasing? Leasing usually has higher “financing” costs.
• If you lease, will you essentially own the piece of equipment at the end of the lease term?
• Will the equipment quickly become obsolete?

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