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Tata Capital > Blog > Equipment Finance > A Complete Guide On Medical Equipment Financing

Equipment Finance

A Complete Guide On Medical Equipment Financing

A Complete Guide On Medical Equipment Financing

The latest advancements in technology mean that the state of art medical equipment is available to provide patients with the best quality healthcare. Access to the latest medical technology is no longer a luxury but a necessity to improve medical services.

However, purchasing the latest medical equipment involves a significant financial outlay, and you may not want to block your working capital. Opting for medical equipment financing, where you take an equipment loan and make the principal and interest payments from the future cash flows, is an optimal solution. The loans available have reasonable interest rates accompanied by quick processing and a speedy disbursal process.

A medical equipment loan finances the purchase of medical equipment and is a business loan for doctors. The amount financed depends on the experience, credit history and financial status of the borrower and the expected profitability and cash flows from the use of the medical equipment.

Loans in this category are given to self-employed doctors, dentists or small hospitals and healthcare facilities. You may consider leasing equipment, but you may not secure ownership of the equipment at the end of the lease period. If you take a medical equipment loan, the equipment itself will serve as the collateral, and additional collateral need not be provided. A medical equipment loan can be used to finance X-ray machines, MRI machines and CAT scan machines, hospital beds and other equipment, Dental instruments, optometry instruments and surgical instruments, to name a few.

The main advantages of a medical equipment loan include:

  1. Ability to conserve your liquidity and cash flow
  2. Ability to update your technology
  3. Better financial management of different outflows

Medical Equipment loan from Tata Capital

Tata capital provides medical equipment financing to enable your business to meet all its financing requirements. A Medical Equipment Loan is one of the options provided. Purchasing the latest equipment and updating your technology is the lifeblood of a healthcare business. It doesn’t matter if you are an established player or an emerging start-up in the healthcare business; Tata Capital has medical equipment financing or medical equipment leasing to suit everyone’s needs.

Against the collateral of the medical equipment, Tata Capital provides a loan to a value percentage of 70% to 80%. You can maintain the profitability of your hospital and earn good returns on investments with reasonably priced Tata Equipment Loans.

Loans from Tata Capital can also be customized according to your requirements. Medical equipment financingor medical equipment funding from Tata Capital can be sourced digitally by applying online, and they are divided into two categories which are explained below: -

Types of Equipment Loan:

  • Term loans
  • Buyers Credit
  • Term Loans: Term loans help by offering financial assistance over a more extended period and enable you to upgrade technology and acquire new equipment. You can enjoy fast credit and loan approvals with a flexible loan tenure. As mentioned above, the loan-to-value ratio is 70% to 80%, with the equipment pledged to Tata Capital.
  • KYC documents required include address and identity proof of the company and Directors. CIBIL scores of the Company and Directors of more than 750, the last 12 months' bank statements, audited financial statements for the past three years, Sales Data for the past 12 months, Declaration of all existing outstanding and loan balances, Purchase invoices for the equipment or machinery showing the Value of the machinery.
  • If you want to import users' Credit: If you are looking to import medical equipment from abroad, Tata Capital encourages you by providing a buyers credit programme. In this against a Letter of Credit, overseas lending institutions provide you with credit to fund the purchase of the medical equipment. You can access this facility from Tata Capital without exhausting your other lines of credit or borrowing facilities and access cheaper lending sources from abroad which may reduce your overall costs. Interest rates in this facility are linked to LIBOR, margin money requirements are also lower than traditional banks, and your EMI payments can be structured so that you enjoy a moratorium post-installation period.
  • The KYC and other documentation requirements are the same as above.  
  • Loan Amounts: Loan amounts vary from Rs 5 Lakhs to Rs 75 lakhs.
  • Loan Tenures: Loan tenures range from 12 months to 3 years. Loans are also available for longer terms.
  • Interest Rates: Interest rates start from 19% p.a. and trend upwards.
  • Fees: The fees under various heads can be viewed by visiting the Tata Capital Equipment financing, interest and fees section. 
  • EMI calculator: There is an EMI calculator which helps you to find out the interest payments and number of EMIs if you input the loan amount, loan tenure and the interest rate.

EMIs can be fixed where you pay a fixed instalment of principal and interest every month or can be structured where you can customize your EMI payments according to your cash flows.

Key Takeaways

Getting a medical equipment loan from Tata Capital is an easy way to stay ahead of technological innovations in the medical field. Know more about Tata Capital equipment finance loan division today online.

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