Medical Equipment Finance

What is medical equipment finance?

Given the expensive nature of medical equipment, a significant capital outlay is required to purchase it outright. This is not always the best way forward for businesses in the healthcare sector as the capital may be required in the future.  

Protecting balance sheet capital reduces the chances of businesses from declining and provides funds for emergency use or other growth projects. Fortunately, a range of funding options are available when investing in medical equipment, including lease arrangements and those based on existing assets.

Our healthcare team provides finance for a plethora of healthcare assets to businesses nationwide.

Options for financing medical equipment

Hire purchase agreement: Hire purchase agreements spread the cost of medical equipment, typically over five or six years, after which time the business gain ownership. Hire purchase involves making an initial deposit followed by fixed instalments and a final ‘completion’ payment.

Although there is a requirement to pay the VAT in full when taking out a hire purchase arrangement, this is recoverable later, and you can use a three-month deferral plan if the lump sum payment is going to impact your cash flow.

Finance lease: A finance lease involves renting medical equipment, then when the lease ends you have several options, including upgrading the equipment under a new lease. This can be a good option if you do not need your business to own the asset at the end of the arrangement.

Notably, you do not have to pay any VAT upfront when you take out a finance lease as this is paid every month. Your business may be responsible for maintaining the equipment with this option.

Asset refinancing: If your business already owns valuable balance sheet assets, you can unlock most of the equity by refinancing. In this case, the lender buys the asset and leases it back to you under a sale and leaseback arrangement.

This can be a good way to purchase medical equipment for your business, as you do not lose any usage rights over through asset refinancing. The lump sum provided by the lender can then be used to purchase your new equipment.

How does medical equipment finance work?

Financing medical equipment allows for your business to acquire assets in a financially sustainable way. Through financing, you do not own the asset at the start of the agreement, but you can use the asset for your business needs. By financing medical equipment, you can choose the term length and the deposit amount.

Is medical equipment finance a good idea for your business?

Financing medical equipment without using up business capital preserves overall stability and allows you to budget and manage your cash flow better. Hire purchase, leasing, and refinancing options all provide flexible funding choices that are adaptable to your business needs.

If your business is looking to invest in new or additional medical assets, such as diagnostic and surgical equipment, specialist finance spreads the cost and offers fixed regular payments and easier budgeting.

Applying for medical equipment finance

MAF Finance Group can compare finance from a range of banks and funders to help you determine the best financial solution for you.

If you would like to get a quote or need more information, fill out the form below and we will be in contact. If you want to speak to us directly, you can call us on 0115 958 6872 and a member of the team will be happy to speak to you. You can also email us at [email protected].