Comprehensive Guide to Healthcare Equipment Financing.
Healthcare equipment financing is a financial solution designed to help healthcare providers acquire necessary equipment without the burden of paying the full cost upfront. This type of financing allows healthcare facilities to spread out the cost of expensive equipment over time, improving cash flow and enabling them to invest in advanced technology that enhances patient care.
Types of Loans Available for the Healthcare Industry through Liberty Capital
Equipment Loans: These loans provide the funds needed to purchase medical equipment. The equipment itself often serves as collateral, which can lower the interest rate.
Term Loans: These are traditional loans with a fixed repayment schedule. They can be used for various purposes, including equipment purchase, facility expansion, or working capital.
SBA Loans: Small Business Administration (SBA) loans offer favorable terms and lower interest rates. They are partially guaranteed by the government, reducing the risk for lenders.
Working Capital Loans: These loans provide funds to cover day-to-day operational expenses, ensuring that the business remains solvent while waiting for revenue from insurance companies or patients.
Lines of Credit: A flexible financing option that allows healthcare providers to draw funds as needed up to a certain limit, similar to a credit card.
Invoice Financing: This option allows businesses to borrow against their accounts receivable, providing immediate cash flow based on outstanding invoices.
Benefits of Healthcare Equipment Financing
Preserves Cash Flow: Spreading the cost over time helps maintain liquidity for other operational expenses.
Tax Benefits: Payments on leased equipment can often be deducted as business expenses, reducing taxable income.
Access to Latest Technology: Financing allows for the acquisition of advanced medical equipment, improving patient care and competitive advantage.
Improved Budgeting: Fixed monthly payments make financial planning more predictable.
Reduced Upfront Costs: Minimizes the need for large upfront capital outlays.
Advantages of Healthcare Equipment Financing
Flexibility: Various financing options can be tailored to meet the specific needs of a healthcare provider.
Speed: Financing can often be arranged quickly, allowing for timely acquisition of necessary equipment.
Scalability: As the practice grows, additional equipment can be financed without significant strain on cash flow.
Retention of Capital: Allows healthcare providers to retain capital for other critical areas of the business.
Types of Leasing
Operating Leases:
- Short-term leases with lower monthly payments.
- Equipment is returned at the end of the lease term.
- Ideal for equipment that may become obsolete quickly.
Finance Leases:
- Long-term leases where the lessee essentially finances the purchase of the equipment.
- The lessee has the option to purchase the equipment at the end of the lease term.
- Higher monthly payments compared to operating leases.
Fair Market Value Leases:
- Provides flexibility to purchase the equipment at fair market value at the end of the lease term, continue leasing, or return the equipment.
- Lower monthly payments than finance leases.
$1 Buyout Leases:
- At the end of the lease term, the lessee can purchase the equipment for $1.
- Higher monthly payments but guarantees ownership.
How Liberty Capital Can Help
Liberty Capital specializes in providing customized financing solutions for the healthcare industry. They offer:
- Competitive Rates: Tailored to the healthcare industry to ensure affordable financing.
- Expertise: Knowledgeable about the specific needs and challenges of healthcare providers.
- Speed: Fast approval and funding processes to ensure timely acquisition of equipment.
- Flexible Terms: Various loan and lease options to fit different financial situations and goals.
- Support: Ongoing customer support to help manage and optimize financial arrangements.
Healthcare equipment financing is a vital tool for healthcare providers looking to acquire advanced medical equipment without straining their finances. By leveraging financing options through institutions like Liberty Capital, healthcare providers can ensure they have the necessary resources to deliver high-quality care while maintaining financial stability.
How Equipment Financing Works
Financing Considerations When Acquiring Business Essential Equipment.
Equipment financing is one of many avenues a business owner can entertain when acquiring business essential equipment. A type of loan also known as “equipment lease” that enables businesses to acquire equipment without paying the full equipment cost upfront. This type of financing is crucial for industries that rely on heavy duty equipment and machinery, commercial equipment, medical equipment, commercial trucks and trailers, or technology hardware are just the few types of equipment that are typically financed when purchase.
Definition:
Equipment financing is a form of business financing for any industry, where you acquire business essential equipment for a specific term rather than purchasing it outright using borrowed or your own working capital. At the end of the term, you may have the option to buy the equipment, renew the lease, or return the equipment if there’s a buyout. Here are the top three forms of equipment financing.
FMV Lease – Fair Market Value – (True Lease): Payments are deductible as business expenses. No Section 179 deduction available because the lessee does not own the equipment.
***Alternatively, there is 10% FMV LEASE where regardless of the market value, your buyout is predetermined at signing rather than letting the Market Value dictate your buyout.
Dollar Buyout Lease: Treated more like a purchase for tax purposes. Lessee can claim Section 179 deduction.
Equipment Financing Agreement: Treated as a loan. Lessee can claim Section 179 deduction.
Leasing vs. Buying
- Equipment Leasing: Lower initial costs, ability to upgrade to newer technology, and tax benefits. Leasing companies may offer flexible terms like deferred payments. Your business can grow through financing without giving up equity or profit.
- Buying: Higher initial costs, lost opportunity to use cash for other profitable investment. Fixed asset shouldn’t be paid cash especially depreciating assets. Ownership of the asset yes but can’t monetize it for potential cashflow. You can collateralize it for other loans for better long-term cashflow funding.
Loans and Financing Options
- Bank Loans: Traditional financing through banks has the most competitive interest rates and terms; however, only for well-qualified borrowers who are well organized who can jump through hoops to get it. Going to the bank is guaranteed you’re going to an A Credit Lender. So, are you an A Credit borrower? Do you have your audited financial statements? Do you have personal financial statements prepped? How can you tell whether you’re bank approvable or not. Having good credit isn’t the only criteria they look at. Remember the “5 C’s” in credit underwriting requirements?
- Equipment Financing Companies: Specialize in commercial equipment. Equipment leasing and equipment loans my differ, offering tailored financing solutions like equipment finance agreement where it’s financing rather than leasing. There is no balloon or buyout at the end of the term.
Vendor Financing: Many Trailer manufacturers offer in-house financing options to make purchasing their equipment more accessible. Vendor financing doesn’t always cover those with low or marginal credit. Our Equipment Vendor Financing programs cater to all types of credit. Our credit requirements are wider than most the benefit of working with a reliable and trusted equipment loan broker
Types of Financing and Leasing Options
- Equipment Loans
- Term Loans: Fixed-interest loans with set
monthly payments over a predetermined period.
- Lines of Credit: Flexible borrowing options
where businesses can draw and repay as needed.
- SBA Loans: Government-backed loans with
favorable terms for small businesses.
- Equipment Leasing
- Operating Leases: Short-term leases with lower
monthly payments and the option to return the equipment at the end of the
lease term.
- Capital Leases: Long-term leases that function
similarly to loans, often with a buyout option at the end.
- Fair Market Value (FMV) Leases: Leases with the option to
purchase the equipment at fair market value at the end of the term.
- Lease-to-Own Programs
- Combines the benefits of leasing
with the option to own the equipment at the end of the lease term,
typically for a nominal fee.
Choosing the Right Financing Company for your company.
Research: Look for reputable financing companies with experience in the industry. Make sure lender or broker is licensed. Don’t pay for any deposit or application fee upfront.
Compare Terms: Examine the terms and conditions of multiple financing companies. It’s not what they say over the phone it’s what’s in the agreement that matters to you. To them it’s what they say, just sign and don’t worry about what I say. That’s not how it works with Liberty Capital. We make sure we explain the contract and the language of the terms should you need to understand, and all the lender’s financing disclosures explained.
Typical Equipment Financing Terms no matter where you go:
- Lease Term duration between 3 to 7 years.
- Most will not finance used equipment over 10-year-old, some go older.
- Equipment is not illegal or obsolete.
- Down payment will be requiring up to 40% for most start-ups.
- Down payment will be required for most low credit who are eligible to get an approval.
- Monthly payments with very little upfront capital outlay are hard to come by unless you have been in business long enough with strong credit.
- Interest rates ranges based on personal credit, equipment type, equipment age, whether you’re buying from a dealer or private seller.
- End-of-lease options- lease to own is always $1.00 buyout, or Equipment Finance Agreement where there is no buyout. Some states require $101 buyouts.
Are you an Equipment Vendor??
If you sell new or used X-ray machine or other medical equipment, we’d love to partner with you to offer highest approval rate for your clients. Our goal is to get them approved no matter what their credit profile might be. Working with Liberty Capital will give you a wider credit window so you can stop shopping for your clients. We do soft-inquiry for each applicant.
- Check out how you can grow your vendor business using our financing options. View our credit guidelines
- Download our equipment vendor package
All we need from your clients is a simple application.
- ONLINE APPLICATION:You can fill out our application, upload and authorized us to process your application. We do soft-inquiry, and our lender will do hard inquiries once you are approved for Equipment Financing only.
- Equipment Invoice orQuote for the truck or equipment you want to buy. Multiple vendors accepted. We’ll lump them into one monthly payment for you. We’ll accept bill-of-sale for some private sale.
- Banks statements (3-4 months) – Proof income, proof of banking, and proof funds availability in case down payment is needed and to match for ACH Payment Drafting – as an auto pay.
Covers many types of equipment
Easier to get than a traditional business loan
Less paperwork
Fast processing time
Less stringent requirements for qualifying
No collateral needed, the equipment is the collateral
May require less credit score for you and your business as well
Bank Hopping for Equipment Loans: Why It’s Time-Consuming and How Liberty Capital Can Help.
Searching for the right equipment lender especially if you’ve already been turned down by your bank, by hopping from one bank to another just trying to figure out whether they will approval you can be a time-consuming and frustrating process, especially if you have challenging credit. Each application involves time-consuming paperwork and potential rejections. If you get turned down, how many more lenders will you apply to before seeking better options from a loan broker?
Special Financing programs
Ø $0 Down for qualified lessee
Ø 1 Advance Payment
Ø 90-day deferred payment
Ø $1 buyout, no prepayment penalty
Ø Monthly payment up to 5 years
Ø Equipment finance Agreement
Ø Low Admin and doc fee
Ø $99 for first 6 months
Working with an equipment loan broker like Liberty Capital can streamline the process, saving you both time and money. Brokers have access to multiple lenders that can structure any credit profile specific to you, even if your credit is less than perfect. With their expertise and network, brokers can navigate the complexities of loan applications and increase your chances of approval. You may not know all the intricacies of equipment financing thus a loan broker will be able to help you navigate.
So why go through the hassle of bank hopping when Liberty Capital can do the work for you, ensuring you get the best possible deal?
What do I need to apply?
1. ONLINE APPLICATION: You can fill out our application, upload and authorized us to process your application. We do soft-inquiry, and our lender will do hard inquiries once you are approved for Equipment Financing only.
2. Equipment Invoice or Quote for the truck or equipment you want to buy. Multiple vendors accepted. We’ll lump them into one monthly payment for you. We’ll accept bill-of-sale for some private sale.
3. Banks statements (3-4 months) – Proof income, proof of banking, and proof funds availability in case down payment is needed and to match for ACH Payment Drafting – as an auto pay.
Equipment financing is vital for businesses that need expensive equipment to operate efficiently. Companies in construction, manufacturing, healthcare, and other heavy equipment-intensive industries benefit significantly from these financial solutions. Understanding the options and working with top financing companies can help businesses acquire necessary equipment while managing cash flow effectively.
When it comes to equipment financing, Liberty Capital Group, Inc. offers several advantages over traditional lenders:
Ø Corp-Only Availability: We cater exclusively to corporations, providing tailored financing solutions for businesses. Corp-only doesn’t apply to start ups. Corp-only doesn’t substitute for having bad credit. Corp-only doesn’t automatically apply because your company is corporation or LLC.
Ø Up to 120% Equipment Cost Coverage: Our financing options can cover not only the equipment cost but also associated soft costs.
Ø Flexible Funding Amounts: Access financing ranging from $250,000 with a simple one-page application to $5,000,000 with full financial statements.
Ø Quick Approval Process: Benefit from next day funding approval, ensuring minimal downtime for your operations.
Ø Approved Equipment Vendors: We work with approved packaging equipment vendors, streamlining the acquisition process for our clients.
Ø Lowest Industry Rates: Enjoy competitive rates for qualified borrowers, reducing the overall cost of financing.
Ø Eligibility for New and Used Equipment Financing: Whether you’re purchasing new or used equipment, we’ve got you covered.
Ø Minimal Impact on Personal Credit: Our equipment financing solutions do not appear on personal credit reports, preserving your personal credit history.
Ø No Early Payoff Penalties: Enjoy the flexibility of paying off your equipment financing or leasing early without incurring early payoff penalties.
Where can I apply?
1. ONLINE APPLICATION: You can fill out our application, upload and authorized us to process your application. We do soft-inquiry, and our lender will do hard inquiries once you are approved for Equipment Financing only.
2. Equipment Invoice or Quote for the truck or equipment you want to buy. Multiple vendors accepted. We’ll lump them into one monthly payment for you. We’ll accept bill-of-sale for some private sale.
3. Banks statements (3-4 months) – Proof income, proof of banking, and proof funds availability in case down payment is needed and to match for ACH Payment Drafting – as an auto pay.
Our small business financing experts are available to guide you through the funding Process.
Despite technological advancements, loans, especially in healthcare equipment financing, predominantly involve personal interaction with an underwriter to ensure as fraud prevention. Automation may not suffice, particularly when dealing with a third party like the vendor and the complexities of equipment purchase. In such scenarios, business owners are often better served by collaborating with a Business Loans Broker like Liberty Capital Group, Inc., who can steer them in the right direction.
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