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Medtech Business Review | Thursday, March 16, 2023
Medical practices seeking new equipment can apply for SBA loans, which require lengthy application processes and considerable paperwork.
FREMONT, CA: Medical practices may require equipment upgrades for various reasons and at any moment. Whether you are just starting and outfitting your practice for the first time, have been in business for some time and need to upgrade to the latest technology, or are dealing with an unexpected breakdown and need a replacement immediately, you may need to secure third-party funding to help finance the purchase of new equipment.
Small Business Administration (SBA) loans are a popular choice for medical offices seeking to purchase new equipment; however, the application procedure and documentation requirements for these loans are lengthy. Conventional lenders such as banks also offer financing for medical equipment, with the equipment serving as collateral and similarly stringent approval standards. If your practice does not meet SBA or bank regulations or if you require cash immediately, alternative lenders may be a better option.
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Let's examine how alternative funding can assist medical clinics with equipment upgrades.
Why You May Need a Loan for Medical Equipment
Medical equipment is essential for the practice of medicine, the accurate diagnosis of patients, and the operation of a business, but it is expensive to purchase and repair.
With a medical equipment loan, these products might be relatively inexpensive for new and established clinics to purchase or repair. Only some businesses have tens of thousands of dollars available to support equipment acquisitions, so obtaining a typical loan, medical equipment financing or alternative funding is often necessary.
Purchasing medical equipment with financial assistance
Loans can be used to purchase the following medical equipment:
Typical equipment, such as examination tables and software
Imaging devices, including x-ray and ultrasound machines
Lab equipment
Additional specialist equipment pertinent to your area of specialization
Why Should Alternative Financing be Considered for the Purchase of Medical Equipment?
Alternative funding is often easier to obtain than traditional funding from SBA and banks. Some lenders may have higher interest rates and fees. Still, their approval standards are more flexible and based on the general health of your business rather than your credit history and financial documents. Alternative lenders are more likely to present loans to newer enterprises, whereas the SBA and banks normally need at least two years of operation.
Their streamlined online approach allows alternative lenders to approve your application considerably more quickly than the SBA or a bank. Alternative finance is excellent for medical practices that need money fast to pay for unforeseen equipment repairs or to take advantage of limited-time chances to purchase new equipment at a discount. Approval can be obtained as early as 24 hours.
Alternative lenders offer a variety of short- and long-term financing options based on the needs of your medical business, including:
Merchant Cash Advances: In exchange for a portion of your daily or weekly debit and credit card sales, you are "advanced" a large sum of cash through a merchant cash advance. Advances in merchant cash are appropriate for medical offices that conduct a high volume of debit and credit card transactions.
Lines of Credit: This operates similarly to commercial credit cards but with higher limits and longer durations. Lines of credit provide your firm with a continuous stream of working capital that may be used and reimbursed as required. You pay interest on the amount you borrow, and as long as you make payments, you can access the funds at any time.
Why is Non-Traditional Financing the Best Option for Buying Medical Equipment?
Alternative funding is perfect for purchasing medical equipment because it has a quicker application processing time, so you don't have to plan or wait months to develop your business.
Flexible approval conditions also make it easier to secure money from an alternative lender, mainly if you are a newer firm, have a low credit score, or do not fit the SBA's or a bank's stringent criteria. Additionally, collateral is rarely required, so your assets will not be at risk if you cannot make payments.
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