Healthcare equipment loans let healthcare providers obtain essential tools they require to operate their business without the need for substantial capital to make upfront payments.
Loans can have a powerful impact on healthcare businesses, improving operational efficiency and levels of patient care while helping them expand and serve a wider patient base. Loans for healthcare equipment can be broadly classified as equipment financing.
Equipment financing
An umbrella term, equipment financing is designed to allow healthcare to providers immediate access to all-new equipment that they require, or replace existing equipment that is out of date or no longer fit for purpose. Financing lets healthcare businesses pay for the equipment or use of the equipment over time in manageable monthly repayments, and usually with interest over an agreed timeframe.
Equipment leasing options
There are multiple finance options available that let healthcare providers lease equipment. These include finance leases and operating leases. An operating lease enables healthcare businesses to secure equipment for a fixed period and gives them the option to upgrade equipment to an advanced model while leasing. Finance leases involve the lender buying the equipment and leasing it to the borrowing business. Over the lease, the healthcare business makes regular repayments plus interest to cover its cost.
With an operating lease, the lender is responsible for the maintenance of the asset, while a finance lease puts the healthcare business in charge of insuring and maintaining the equipment.
Asset refinance
Asset refinance lets healthcare companies unlock the value of their assets by selling them to finance companies and leasing them back. This frees up cash to purchase other equipment without the company needing to sell its assets outright.
Hire purchase
Hire purchase (HP) helps healthcare firms that want to own the equipment they acquire outright. After every repayment has been made, the equipment becomes an asset of the enterprise and can be sold or used to borrow against.
Rental agreements
There are multiple healthcare equipment rental agreements that also let businesses access the equipment they require without paying large upfront amounts. Such arrangements offer flexibility and allow for equipment to be upgraded, returned or owned after the terms of the agreement have been met.
Equipment working capital loans
This finance type provides healthcare firms with short-term funds to help manage their daily operations, and this includes the purchase of healthcare equipment. However, these loans are different from loans employed for long-term investments in equipment and focus on covering more immediate expenses like payroll, inventory and rent.
Loan types
There are a variety of different loan types that can support the purchase of healthcare equipment, including secured and unsecured loans. Secured loans require collateral but have lower interest rates. While unsecured loans have higher interest rates, they don’t require collateral. On the other hand, in the US, new healthcare providers can access SBA loans; the closest UK equivalent is applying to the government backed Start Up Loan scheme.
If your healthcare company is seeking a loan to purchase new equipment, get in touch with us today at AJL Finance to find out how we can help.
