The Truth About Medical Equipment Loans & Medical Equipment Leases
Medical equipment loans and leases are a necessary task for many practices. Taking out a loan to get the equipment you need can have many benefits for a growing business. However, it can seem daunting to understand the qualifications and become aware of all your available options.
Read on to learn more about leasing medical equipment and everything you should know before beginning the process. We will talk about financing options and everything in between. We are here to help make the process a little bit easier.
What is Medical Equipment Financing?
Medical financing is a lease or a loan that a medical professional obtains to get funding for equipment and tools they may need. It often involves monthly payments and typically over 1-8 year terms.
Medical equipment funding is for professionals who want to improve their programs and patient care. Importantly, access to valuable technology is excellent for bringing in customers and increasing profit.
What is Medical Equipment Leasing?
Medical equipment leasing is just like leasing a car. You get ownership and use of new equipment for a set amount of time. At the end of this time, you can invest in your medical equipment lease for your business or return it to the company.
Turn to medical equipment leasing if you prefer lower payments and rates for the devices you need. Leasing also results in lower upfront costs, which is obviously helpful with the money aspect when you need to access these options.
Types of Medical Equipment
There are many types of healthcare equipment that you might find yourself in need of in your practice. We will go over a few of the most common ones that you can receive from lenders for your business.
Some types of medical equipment you might acquire for business needs include:
- Hospital beds
- Pressure mattresses
- Traction machines
- Mobility assistive equipment, such as walkers or canes
- EKG/EGG machines
- Patient monitors
- Medical Imaging Equipment
Stated above are just a few examples of equipment that might interest you, but you can finance almost any type of healthcare equipment.
Medical equipment financing can help you gain access to new equipment through payments. These medical devices can help you to expand your practice in many ways.
The Benefits of New Healthcare Equipment
You might wonder what the benefits of having new healthcare equipment in your practice are. There are many that you can expect if you decide to take advantage of medical financing.
Some benefits you might experience include:
- The ability to provide better patient care
- An improvement in efficiency
- Lower maintenance costs
- A way to perform new procedures
- More accurate procedures
All of these benefits and more can come from equipment funding.
The average customer will feel safer in your practice with advanced equipment. Improving what you have through medical equipment financing will serve you well in the future.
Can You Lease Used Equipment?
Yes. Used equipment is ideal for those on a budget. The lender will lease medical devices at a rate complimentary to the amount of wear and tear on the equipment. Also, costs are much cheaper than brand-new medical equipment.
Once you’ve finished paying on your medical equipment leasing, you can choose to buy the items out of the lease or return it to the company. Used technology and software can be just as helpful to patients as newly purchased equipment.
What are Medical Equipment Financing Rates?
When deciding if a medical equipment loan is right for your business needs, you might wonder what the current interest rates are for this process. These are vital to understanding so companies know what the lender or bank will require them to pay, and what the term and rate will be.
Examples of financing rates for medical equipment leasing programs include:
- Less than 2% for a contract through a dealer
- Between 6%-12% through money from a bank
- Around 2-20% for a medical equipment loan from medical equipment financing companies
These are just some examples of the rates you will find when looking for money. Of course, there are different factors that go into financing medical equipment. Differing lenders might have traits that appeal to your businesses, despite the rates.
Can I Finance Medical Equipment with Bad Credit?
If you have bad credit, you might wonder if you can still finance medical equipment. You will be relieved to learn that you can still obtain financing even with poor credit, however it might include higher rates.
If you have poor credit, you may need to:
- Offer collateral
- Get a cosigner
- Make a down payment
- Show good cash flow in your account
Bad credit does not have to be the end of the world. Without a doubt, there is still a way to access equipment finance.
Best Medical Financing Solutions
Our Top 5 Options
There are five loans you should consider for medical equipment financing. In terms of lending money, there are multiple routes you can explore for flexible benefits.
Below we will discuss the top 5 loan options you should explore. Each has good traits and can help you pay for and purchase loans for medical equipment that you need for your business.
Health Care Group Loans
The Health Care Group Loan is a loan for Licensed Professionals, and there are a few requirements you must hit to get this type of medical equipment financing .
Some of the qualifications you must meet for these equipment finance loans include:
- Must be a licensed professional
- 660 FICO minimum
- 75k minimum personal income requirement for the personal guarantor
- Minimum time in the business of 1 Year; however, they can entertain W2 and 1099
Related to a bank loan, this health care group loan is one of the best products in the industry. The interest and rates for this type of medical equipment loan are some of the lowest available. Terms can also go out up to 10 years.
This financing for healthcare groups is just one type of loans a small business can receive. Keep reading to learn about other types of finance you may be eligible for.
Equipment Leasing & Financing
Equipment financing and leasing are two different ways to obtain access to equipment. Leasing allows you to rent equipment for your patients, permitting your company limited access. Financing is a series of monthly payments that permit you to invest in the item for yourself.
Leasing tends to be a less expensive purchase, while financing is a bigger payment that allows you to own the device. Companies can find either one beneficial to purchase for their companies.
An SBA loan, or Small Business Administration Loan, provides financial solutions to small businesses that can’t quite seem to receive funding from a bank. Since backed by the government, SBA loans come with an excellent interest rate, typically 3-4 points over the federal reserve prime rate.
To qualify, your medical practice needs:
- Must be a for-profit business
- Must have business owners who have invested equity
- Must be based in the US
- Need to meet SBA credit and revenue requirements
Meeting these means you might be able to qualify for this loan with your practice. Learn more about SBA Loans.
Working Capital Loan
A working capital loan is used to finance the operations that happen on a day-to-day basis in your office. This can include paying your staff, paying rent on the building, cash flow and other items critical to the existence of your business. However, you can also use working capital to finance medical equipment.
This type of loan is ideal for your business if you need help with the smaller stuff and can be funded cash within 24 hours. It is especially beneficial if you have seasonal times where there are more customers than other points in the year to get you through until income goes up again. Working capital loans are good for uncertainty in a business. What is working capital?
Business Line of Credit
A business line of credit is a way to gain access to short-term funding in the industry. If you need support for items like payroll or new equipment, this is a loan that could work for your team as a revolving line of working capital.
A business line of credit is great if you need to adapt fast. Call Upwise Capital to give you more information about the rate on line of credit offers. This can be an alternative form of financing for medical equipment. You only pay interest on the cash you draw, and can save on interest and receive lower rates by paying the financing back early. Read more about lines of credit.
Which Healthcare Equipment Finance Options Are Best For You?
If you want to select loans for medical equipment, you might wonder which one is best for you. How are you to tell which location is best for the future of your company?
When selecting a term loan, make sure you keep in mind:
- Funding time: How long will it take for you to receive the money? What are the rates and terms?
- Term Length: How long will it take you to pay off what you owe?
- Customer Service: Are they a good and reputable company to acquire term loans from?
Paying attention to these items will help you select a great loan option.
Choosing the right loan is critical for the funding of your practice’s future. Ensure you take the time to find one right for you.
Pros and Cons of Financing for Medical Equipment
As with anything involving capital and funding, there are some pros and cons to consider before financing medical equipment. You should consider these before making a final decision.
Some of the pros that come with financing include:
- Potential expansion for your business
- Small payments on the equipment you need
- Standard application process
- Multiple Financing solutions
- Ability to acquire customers
- Upgrade of available services
These are a few of the pros that come with using financial loans to help your medical practice grow in new and fantastic ways.
On the other hand, some of the cons that come with financing include:
- Rates & Terms Determined by Credit and Equipment
- Higher Rates for Lower Credit Scores
- Loss of money
- Potential for debt
- Down payment
Having the capital to deal with financing is the first step to successfully receiving funding for your items. If you cannot afford to payback your loan, there is little point in taking on medical equipment loans.
How Do You Qualify for Loans for Medical Equipment?
If you find that getting a personalized loan for medical equipment is right for you, you might wonder how to qualify with a bank or lenders.
To qualify for loans for medical equipment:
- Be aware of your credit score and have a good history of paying on time
- Make sure you know what you’ll use medical equipment for
- Create a strong financial team to handle your funding
These few steps will keep you on track and help you qualify for a loan.
It can be a little tricky to get funding for medical equipment, but the process is worth it. Your medical practice will benefit in many ways.
How to Apply for Medical Equipment Financing
There are many places you can apply for healthcare equipment financing. One of the best locations is Upwise Capital. We will go over the application process to apply for medical equipment financing and can provide an offer within 24 hours.
To apply for medical equipment financing, you’ll need to provide:
- Basic information about the owners of your business
- Basic information about your business
- Any previous debt or current loan information
- Equipment List or Invoice of items you’d like to finance
- Business Bank statements and financials
- Completed & Signed Application
These steps will complete your application for medical equipment financing companies.
If you are approved for loans for medical equipment, you can increase patients care for your small business. Undoubtedly, medical device financing can definitely take your goals far.
Our equipment financing team at Upwise Capital is here to assist you with every step of the way to secure whatever equipment is needed to help your business grow. We know the medical and healthcare industry, specializing in equipment loans for you. If you have any questions regarding how equipment leasing or financing works, please call our team at 77-55-UPWISE or email [email protected]. You can also apply online for equipment financing, so you can get back to work and running your business.
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