Financing and loans of medical equipment
If you are in the healthcare industry, you most likely use some sort of medical equipment, whether it is an x-ray machine, ventilator, or even needles for blood collection.
Usually, medical equipment doesn’t come cheap, and when you find yourself in need, you may not have the cash to cover a large expense.
This is where medical equipment loans can come in handy: They provide the working capital you need to get the equipment your business depends on.
How Medical Equipment Loans Can Help Your Practice
Small business loans can allow you to purchase medical equipment when cash flow is unstable. Your doctor’s office needs the equipment to help patients, and a medical equipment loan can ensure you don’t miss a thing if one piece of equipment breaks down and you need to replace it. yesterday.
It can also make sure you have the latest equipment so you can better serve your patients. If you’re using outdated equipment because you don’t have the working capital to upgrade it, a loan can help you do that.
What you need to know about financing medical equipment
The needs of your healthcare business are like no other. This is why it is important to explore all the options for financing medical equipment. Your specific business needs, as well as your credit history, will affect the types of financing you are eligible for.
How does the financing of medical equipment work?
Business owners who need working capital for their medical equipment needs have several options (which we’ll cover in the next section) when it comes to financing.
While each may have slightly different requirements, in general, once you receive the lump sum, you will need to start making monthly payments on the loan, credit card balance, or line of credit. Once this amount is paid off, you may be able to borrow again.
What types of medical equipment can be funded?
You can fund various types of medical devices and equipment, including x-ray machines, MRI scans, and ventilators.
Some lenders will allow you to finance both used and new equipment, but check the fine print before assuming that you can use the funds you borrow on used equipment.
You may also be able to take advantage of medical equipment rental to finance medical devices. With a medical equipment lease, you pay a lower monthly payment to a leasing company than to a finance company if you purchased the equipment directly. At the end of the lease, you would return the equipment. There are benefits for both.
Can you finance used medical equipment?
Some equipment finance companies may be open to you using medical equipment finance to purchase used equipment. Some types of financing, such as small business loans or credit cards, do not contain a stipulation on what you can buy with the funds as long as it relates to your business.
If you are working with a healthcare equipment finance company, make sure you know if you are able to purchase used equipment before you apply.
Types of medical equipment loans
There are several types of medical equipment loans as well as lenders offering different financing rates. Explore each to see which one is best suited.
You may be able to get a term loan from a bank or credit union and get good rates if you qualify. While the bank you’re already doing business with is a good place to start, shop around with other lenders as you may find a better rate elsewhere.
Another popular option is the Small Business Administration’s 7 (a) loan program, which offers low rates and long repayment periods.
If you’d rather have access to cash when you need it rather than a lump sum cash, a business line of credit might be a good solution. After being approved for a fixed amount, you can borrow up to that amount, pay it back, and borrow it again.
Equipment loans are specifically intended for the purchase of equipment. And the equipment you buy serves as collateral, so you can often find good rates on these loans.
If you need smaller medical equipment, such as needles or plastic gloves, you might be better off using business credit cards. Remember: most have high interest rates, so you’ll want to pay off your balance in full each month so you don’t incur additional charges.
Short term loan
If your business cannot qualify for any of the above options, perhaps because you have bad credit, consider short term loans. There are short-term lenders who take into account factors other than credit scores, which can make it easier for you to qualify. Be aware that these loans have high interest.
Interest rate on the financing of medical equipment
Finance companies that cater to the healthcare industry, as well as small businesses in general, can offer a wide range of interest rates for loan products. There are many factors that go into how a lender determines your rate, and this “secret formula” will vary from lender to lender.
Just rest assured that even if you have bad credit there is a loan for you, although you will have to pay higher interest rates to get it. If you have the time to do so, learn how to build small business credit and increase your credit scores before you apply to maximize the terms available to you.
How to qualify for medical equipment loans
Healthcare professionals who want to apply for medical equipment financing should be aware of some of the criteria that lenders look at.
The first concerns yourself and your business credit history. If your business has not established its own credit history, your personal credit will be assessed. The higher your credit scores, the better the rates you qualify for.
Lenders also care about the length of your business. The longer your business appears, the more stable your business will appear and the better the rates you may be eligible for.
How to apply for a loan of medical equipment
While the application process may vary slightly from lender to lender, here is generally what you can expect.
You will be asked questions about your business, including address, industry, and time spent in business. You may also be asked questions about you as the owner (and any partner, if you have any), including your contact details and social security number.
You will also be asked for the amount you wish to borrow and you may be required to provide your bank account number so that your funds can be deposited into your account during credit approval.
Once approved, you’ll be presented with your financing options, including the interest rate and the number of monthly payments you’ll need to make. Your refunds begin a few weeks after receiving funds.
Nav Verdict: Funding for medical equipment
Financing solutions like the ones we’ve discussed here can help you get the medical equipment you need without having to empty your bank account.
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