Capital Lease

A capital lease is the lease structure that most closely resembles ownership. The scanner appears on your balance sheet as an asset, the lease obligation appears as a liability, you claim depreciation over the equipment's useful life, and at the end of the term you exercise a purchase option at a price that was set when you signed. For practices where ownership is the intended outcome but the monthly cash flow dynamics of a lease payment are preferable to a loan, the capital lease hits the target precisely.

Capital leases are sometimes called finance leases under ASC 842 terminology. The terminology changed; the economics did not. The asset is on your books, you are treated as the owner for depreciation purposes, and the end-of-term outcome is usually ownership at a nominal cost.

Capital Lease Mechanics for CT Equipment

At lease inception, the scanner's cost is recorded on your books as an asset at the present value of the lease payments. A corresponding lease liability is recorded. As you make monthly payments, a portion reduces the liability and a portion is recognized as interest expense, exactly like a loan amortization. You simultaneously claim depreciation on the asset side, typically over the equipment's MACRS recovery period for medical equipment.

The critical distinction from an operating lease is in the end-of-term treatment. A capital lease specifies the purchase option at signing. That option is typically structured as a dollar buyout (you pay $1 to own the equipment at term end) or a fixed percentage of the original cost, sometimes ten percent. Either way, the outcome at term end is ownership at a predetermined cost, not a fair market value negotiation.

From a monthly payment standpoint, capital lease payments are typically higher than an operating lease payment on the same equipment over the same term because no residual is excluded from the payment structure. The economics are essentially the same as a loan. Whether you call it a loan or a capital lease often comes down to lender preference and how the documentation is structured.

Practices That Prefer a Capital Lease Structure

The capital lease appeals to practices that want ownership outcomes but whose lender relationships are structured around lease documents rather than loan documents. Some specialty equipment lenders, particularly those who focus on medical imaging, prefer to document transactions as capital leases because it gives them cleaner collateral control compared to an equipment note. For the borrower, the practical difference from a loan or an Equipment Finance Agreement is minimal.

Imaging centers and ambulatory surgical centers that have existing equipment lines structured as capital leases often continue using that structure for new acquisitions because it keeps their financing documentation consistent. Adding a new CT scanner on the same lease structure as their existing MRI, X-ray, or ultrasound equipment simplifies the accounting.

Practices buying higher-specification systems like a 256-slice scanner or a dual-energy platform sometimes prefer the capital lease because the higher payment is visible on the balance sheet rather than flowing through the P and L as an operating expense, which they may prefer for their internal reporting or investor presentations.

Terms and Pricing on CT Capital Leases

Capital lease terms for CT scanners typically run 36 to 72 months. Longer terms reduce monthly payments but increase total interest paid. Most practices targeting ownership in the shortest reasonable time choose 48 to 60 month terms for equipment landing between $300k and $800k. Above $800,000, 72-month terms are common to keep monthly obligations manageable relative to scan revenue projections.

Pricing on a capital lease reflects the same inputs as a loan: the lender's cost of funds, the borrower's credit risk, the collateral quality, and the term. For established practices with strong credit, capital lease rates track closely with loan rates. For borrowers with B or C credit, a capital lease from a specialty lender may be more accessible than a traditional bank loan. We review credit situations on a case-by-case basis and work with borrowers who fall outside standard bank credit thresholds.

Applications up to roughly $400,000 can often proceed on an application and bank statements alone. Larger capital lease applications typically require business tax returns and current financial statements.

How a Capital Lease Compares to Similar Structures

Choosing between a capital lease, a dollar buyout lease, an EFA, and a conventional loan often comes down to lender preference and documentation convention rather than meaningful economic difference. All four structures result in the same outcome: you own the equipment at the end, you pay principal and interest over a fixed term, and you claim depreciation throughout. The differences are in how the agreement is documented, what it is called on your balance sheet, and which lender programs apply.

For practices weighing tax strategy, a capital lease pairs well with Section 179 and bonus depreciation elections, since ownership for depreciation purposes is established at lease inception. Your tax advisor can confirm how the specific structure interacts with your current-year depreciation elections.