Traditional Methods of Medical Equipment Financing

Medical equipment financing is a topic that most medical facilities have to deal with at some point. With the costs of medical equipment going up every year, there is a growing need to finance the purchase of it. Most medical facilities do not have the cash that they need to simply purchase the equipment. Therefore, financing opens the door to many purchases that would not otherwise be possible. There are many different methods to finance medical equipment and some are better than others. Here are a few of the more popular methods for financing medical equipment. 

Commercial Bank Loan

With a traditional commercial bank loan, they are extending you the money that you need based on your credit and business history. You will typically have to have at least three years of a successful business history in order to qualify. You will also have to have a decent business credit score for them to consider lending you the money that you need. Sometimes they will offer you a loan with a fixed payment schedule that covers principal and interest. Other times you will get a balloon loan that allows you to pay the interest only on the loan. Many of these loans are not secured by any collateral but are written because of the successful business history of the company. 

Equity Financing

Another way to purchase equipment for the expansion of your business is through equity financing. This can be accomplished by borrowing against the equity in your business with a bank. You could also sell part of the equity in your business to investors. If your business is successful enough, there will likely be investors that would be willing to pay good money to get involved. They will give you the capital you need to expand and then you will cut them in on the profits of your business from there. The downside to this is that you will always have to split your profits. However, if you do not have other options, it might be a good way to get money that you do not have to make payments on.

Seller Financing

Depending upon which company you purchase the equipment from, you may be able to secure "in-house" financing from them for the equipment. They might have an introductory no-interest financing plan that converts into a regular loan after that. Regardless of the terms of the loan, this can be a very easy way to get the equipment you need. They set up these programs through investment companies that have money to lend. You fill out a simple credit application and they approve or deny you quickly. If you are approved, you can quickly get the equipment that you need and then make payments to the credit company until the balance of the loan is paid off. This gives you a nice alternative to using a bank and allows you to expand at the same time. 



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