Choosing the right Finance Institution for your Medical Practice
Looking to upgrade or add new equipment to your medical practice?
No matter what type of medical equipment you need, one thing stays the same. Equipment like MRI & X-Ray machines, Medical Lasers, Chiropractic and Dental Equipment all come at a high cost. When you’re looking at purchasing equipment that costs in the tens of thousands and above, you’ll want to do your due diligence.
If you’re thinking about paying cash, maybe you’ll want to reconsider after finishing this article.
According to Forbes, The medical industry is a 3 trillion dollar industry. It’s because of this, that there are no shortages of equipment vendors or finance options to choose from. You can choose from Dealer Financing, Bank / SBA financing, and Alternative Financing options. While we belong in the last category, there are some pros and cons going with dealer or bank financing.
Lets start with Dealer Financing
Dealer financing is when the dealer selling the equipment offers financing through themselves. Sometimes you’ll be able to stumble into a low rate, but you have to still be cautious. Many of these Equipment Vendors understand that you won’t be shopping around and give a higher rate. The biggest upside with Dealer Financing is that they’ll pretty much approve any business.
If you’re low on options and been turned down by the bank, Dealer Financing is a good option to go with. We would recommend shopping the rate with some other companies to ensure it’s competitive. You’ll want to keep your eyes out for 0-5% APR promotions.
Onto Bank Financing
Getting financing through your bank isn’t going to get you the best rates. To be honest, there’s little reason to go to the bank for financing. They’re difficult to work with, have difficult credit guidelines, don’t finance start-ups under 4 years, and the list can just go on. We hear horror stories time and time again about large national banks offering 12% rates after making customers wait weeks for a response. Applying for financing through the bank can cause added work for you as they comb through your finances to qualify you.
We only recommend this option if you have A credit and your company has been in business for more than 5 years, otherwise your chances are slim. Large Banks typically like to deal with larger six-figure deals and won’t lift a finger if it isn’t worthwhile for them.
Alternative Financing Lenders
We actually are included of this category, but we’ll be the first to say that this isn’t the best option for everyone.
There’s many dishonest national equipment leasing companies that pray on the uninformed consumer, so you’ll want to double check that the rate they’re promising you is actually the rate you’re receiving.
Besides that, Alternative finance lenders are able to finance start-ups and can work with customers with bad credit. However it is important to have realistic expectations as well. You won’t receive 2% interest rates from these companies, but rather flexible finance terms. Whether it’s longer terms to including additional funding for installation- this would be the way to go.
A recent example we’re able to provide – We were able to get a skin care practice a new Lumenis Lightsheer laser with 2 months of deferred payments. With the 2 months of deferred payments, they were able to pay for the laser with the additional income they were generating with the new laser! They didn’t have to put a large down payment and . This scenario wouldn’t have been possible without an alternative lender.
In conclusion, If you’re an established company with A credit – Try Dealer Financing. Make sure to compare rates to ensure you’re receiving the best possible package for your business.
However if you’re a newer business looking to finance with flexible terms, or have questionable history – We’ll be happy to help you explore your options. Give us a call at (800) 341-1288