Connecting Your Scientific Ambitions with Financial Possibilities
Building on the insightful discussion about LC/MS sale-leaseback in our inaugural edition last week, we are excited to dive even deeper with a case-study. Let’s get into it…
Once upon a time…
Laboratory Zeta, a mid-sized laboratory specializing in clinical toxicology testing, faced a pressing financial challenge. The need for updating and expanding their existing facility was met with a lack of available capital, leaving them at a crossroads. 😢
Cue the dramatic and suspenseful music 🎹…
Their options were a bit limited: either invest a significant portion of their cash reserves or explore an alternative solution that would allow them to update their facility without compromising their financial stability.
But there is good news 😃…
Laboratory Zeta turned to the LC/MS sale-leaseback option, which offered a unique way to address their financial constraints. They decided to sell their existing LC/MS instruments to McKinley Scientific while simultaneously entering into a lease agreement with McKinley Capital Finance to continue using the LC/MS instruments for their research needs.
The happy ending 🕺🏻💃🏼…
By selling their existing LC/MS equipment, Laboratory Zeta received a lump-sum payment of $500,000*. This immediate injection of cash into the budget was contributory to their expansion goals and with some reserves to support other research and development projects.
Their fixed monthly payments on the LC/MS equipment allowed for improved budgeting and financial planning directly impacting the stability for all laboratory operations. Plus, their monthly payments were treated as operating expenses – leading to some tax deductions and reduced tax burden.
Initial Cash Injection: $500,000* (received from the sale of the existing LC/MS instruments)
Total Lease Payments over 3 years: $15,000/month * 36 months = $540,000
Yes, we know! The net impact of this transaction is a cash inflow of -$40,000 over the 3-year period. However, it's important to consider the benefits beyond the immediate cash flow and the other advantages mentioned earlier.
This. can. be. your. reality…👏👏👏
The LC/MS sale-lease back can be a reality that any laboratory seeking to balance their financial needs with operational efficiency can achieve. Contact McKinley Scientific today. Your vision is our priority. #massspectrometry #lcms #refuburbished #finance
Disclaimer: Actual terms and numbers may vary based on the instrument(s) value, lease term, and other factors. Laboratories should carefully evaluate their individual circumstances before making any decisions related to sale-leaseback arrangements.