6 Benefits of Medical Equipment Loan That Make it Better Choice Than Leasing
5 min read
Benefits of Medical Equipment Loan
Hospitals and clinics need the latest and best medical equipment to offer first-in-class medical care. They need X-ray machines, ECG machines, MRI machines, and various other equipment. However, acquiring them requires substantial funds.
Usually, these equipment are bought on lease. However, another popular option is a medical equipment loan. This is a type of professional loan that most financial institutions offer to medical professionals.
While both options have unique benefits, getting a loan has a few advantages that give it an edge over leasing. Read on to know these benefits of a medical equipment loan.
6 Benefits That Make Medical Equipment Loans a Better Option
Check out the various benefits that make medical equipment loans a better option.
Acquire a New Asset
When you take a medical equipment loan and get the needed equipment, you also get a new asset. Assets add more value to the business, making them a good thing. You also get access to equipment with the latest technology.
This means the equipment is at its best performance, and you do not need to worry about repairing or upgrading it frequently. Having best-in-class equipment in hand allows you to give the best medical care to the patients.
On the other hand, when you lease equipment, you generally get used products. Some equipment may also have some damage and need repairs. These often lack the latest technology and do not add any real value to the business.
Get Full Ownership
You obtain full asset ownership rights of the equipment with the financial support provided by a medical equipment loan. You get access to the equipment as soon as you start the loan. Unlike leasing, you have complete control over the asset and do not need to worry about returning it.
You do not get ownership when you lease medical equipment; it remains with the owner. Also, you have limited control over leased equipment. Damaging it is also doubly expensive, especially since owners may levy a fine, alongside any repair costs.
Modify the Equipment
Another great benefit of getting a medical equipment loan is your freedom to modify the equipment. This is because you own the equipment. You can make modifications as per the specific needs of your hospital or clinic.
This allows you to customise or enhance the equipment according to your preference. Conversely, when you lease medical equipment, you cannot modify the equipment since you do not own it. If you need to modify it, you need the owner’s approval. The whole ordeal can be time-consuming.
Free from Usage Restrictions
As mentioned, when you purchase medical equipment, you become the owner. This provides you with the freedom to use the equipment as needed. You can install it in a hospital, at a clinic, at your residence, etc. There are no restrictions on how you can use the equipment.
On the contrary, leasing often comes with certain restrictions on use. You need to follow the specific guidelines provided by the owner/lending company and use the equipment within those guidelines. This limitation can result in you being unable to use the equipment fully.
Not Bound by Any Agreement
When you take a medical equipment loan, you are not bound by any agreement except the one that states the repayment terms. This means there is no agreement on the use and return of equipment or rent terms like in leasing the equipment.
Moreover, you must follow these terms and conditions to access the equipment. As such, an agreement hinders your ability to extract the maximum potential from the equipment. On the other hand, its absence gives you freedom to use the equipment as you see fit.
Sell the Equipment Anytime
Another significant advantage of getting a medical equipment loan is that you can sell the equipment as and when you prefer. This gives you the flexibility to upgrade the equipment with a new one.
Also, you can sell the equipment if you need urgent access to funds to cover your unexpected expenses. In some cases, you may even be able to lease it out yourself and get the required funds.
On the contrary, leasing medical equipment does not allow you to sell or mortgage it as you prefer. This is because you are not the owner of the equipment. You must adhere to the lending agreement and avoid doing anything that can have severe consequences.
What are the Key Points to Consider While Getting a Medical Equipment Loan?
Here are some essential points that you must consider while getting a medical equipment loan.
Evaluate Your Requirements
Understanding your requirements is essential before getting a medical equipment loan. You must assess which kind of medical equipment you need after adequate research. Since getting medical equipment requires a substantial amount, you must make a well-informed purchasing decision.
The best way to select the right equipment for your hospital or clinic is to understand your patients, the treatments you offer, and your long-term objectives.
Compare Rates and Upfront Cost
While seeking a medical equipment loan, ensure you clearly understand the interest rates associated with the loan. This is because they directly impact the borrowing cost and vary across lenders. When you compare various options, you choose a lender that offers the best rates.
Also, when you start the financing process, you need to pay an upfront cost or down payment for the equipment. Lenders generally offer up to 90% of the equipment cost as a loan, and you will have to pay the remaining while making the purchase.
This means that if your equipment costs ₹30 Lakhs and the lender is paying 85%, you will have to pay the remaining ₹4.5 Lakhs. Some lenders may even offer 100% of the financing. However, this depends on numerous things.
Given that this amount can be substantial and you will need to make proper arrangements for it, it is essential to factor it in before applying.
Choose a Trustworthy Lender
Selecting a reputable and trustworthy lender for the medical equipment loan is essential. There are numerous lenders available that offer various types of professional loans, like CA loans, Architect loans, etc., at great interest rates and loan terms.
However, you should also pay attention to other factors to avoid any financial loss. You should research the lending institution and get in touch with past customers of the lender to get first-hand reviews.
Understand the Loan Terms
Prior to applying for a medical equipment loan, it is crucial to understand the terms and conditions that the lender offers. You should not proceed without clearly understanding all the information in the contract.
If you do not pay attention, you can miss essential information like hidden fees, variable interest rates, collateral terms, grace periods, and other details. This can result in additional costs that can cause financial strain.
As you can see, the way an architect would require an architect loan; a loan for medical equipment is a high-value tool for doctors with clinics or hospitals. These loans help you get the best resources to ensure you offer the best medical treatment.
