Understanding healthcare and medical equipment finance
The private healthcare industry is a huge contributor to the UK economy, with the market size reaching an estimated £11 billion last year.
For healthcare business owners, equipment represents a major investment. It’s also an industry where technological advancements are happening all the time. As patients expect the most up-to-date care, healthcare providers must upgrade their machinery on a regular basis. It’s an enormous financial pressure, requiring significant working capital. Fortunately, there are options available. In this article, we highlight the different finance solutions available for leasing, buying and maintaining health and medical equipment.
Healthcare & Medical Business Loans
Business Loans provide a lump-sum payment, which companies can use however they see fit. This offers simplicity, with fixed-rated repayments, but also a lot of flexibility, as the money can be used to cover a wide range of needs, including buying, repairing, or upgrading expensive healthcare and medical equipment.
Healthcare & Medical Equipment & Machinery Finance
Equipment Finance along with Plant and Machinery Finance are sometimes referred to simply as ‘asset finance’, covering operating lease, hire purchase agreements and finance lease. The advantage of this type of finance is that companies can get the essential, and often expensive, equipment they need without a large upfront investment, spreading costs into manageable monthly repayments.
Below, we’ve listed some examples of the types of equipment that you can buy:
GP surgeries: Blood pressure monitors, electrocardiogram machines and scales.
Optician practices: Phoropters, slit lamps and autorefractors.
Pharmacies: Refrigerators, freezers and pill counters.
Dental practices: Dental drills, dental x-ray machines and dental suction tools.
Veterinary clinics: Ultrasound machines, vet x-ray systems and autoclaves.
Care homes: Adjustable beds, IV pumps and oxygen concentrators.
Physiotherapy clinics: Gait analysis systems, electric massage tables and hydrotherapy pools.
Cosmetic surgeries: Surgical microscopes, anaesthesia machines and surgical headlights.
As you can see from the diverse examples, you can fund virtually any type of asset that has a health or medical use – and the finance also covers installation and software costs.
In fact, what you buy doesn’t have to be limited to healthcare and medical equipment. Office furniture, retail equipment such as checkout tills, computers and any other type of asset can be acquired. You can even use the finance to pay for non-tangible assets such as websites and branding.
Healthcare & Medical Vehicle Finance
You can use Commercial Vehicle Finance for a range of vehicles like ambulances, minibuses, company cars, vans, etc. It’s flexible enough to tailor for the specific needs of the healthcare sector, such as converting a transport vehicle so that it’s wheelchair accessibleor adding refrigerators to a van.
Healthcare & Medical Equipment Refinance
In the healthcare sector, expensive specialist equipment can tie up significant capital. If your business already has a wealth of assets, but you’re looking to unlock finance for investment and growth, healthcare providers are able to refinance their equipment and machinery, including vehicles.
You’ll typically receive up to 80% of your asset’s value upfront, while retaining full ownership and continued use of the equipment.
Healthcare & Medical Fitout Finance
Whether you’re refitting your current premises or relocating to a new one, Fitout Financeprovides the funds for every part of your renovation, from construction and installation to equipment and furnishings. Again, any equipment funded can be used for rudimentary office kit, specialised medical machinery or any other asset that you need for your business. It can even be used for fixed assets like HVAC, electrical signage or an intercom system.
Healthcare & Medical New Start Finance
Healthcare is an exciting industry for startups and new businesses, whether providing services to customers or developing the next breakthrough as a HealthTech pioneer.
For those entrepreneurs who also have a vision but need some financial support to get them going, our New Start Finance product has been created to specifically help new businesses get up and running. The package provides working capital and funds for fitout works and equipment purchases.
Healthcare & Medical Franchise Finance
Several big-name healthcare providers offer franchise opportunities, such as Boots Opticians and Bluebird Care, or similar joint venture partnerships, like Specsavers and Vision Express. Franchise Finance available to support those who are looking to take advantage of such opportunities, covering the entire franchise costs, including equipment purchases.
How can Origin Finance help?
The team at Origin Finance have been helping healthcare and medical providers, including pharmacies, for many years. Our specialised finance and Professional Loans service has been tailored to meet the industry’s specific needs, helping small businesses access finance to enable them to grow.
With our deep understanding of healthcare financing, we can connect you with the right lenders, saving you time and hassle. Our expertise comes at no cost to you, as we’re remunerated directly by the lender.
Get in touch for a free no-obligation quote today.
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The Recovery Loan Scheme becomes the Growth Guarantee Scheme
The Recovery Loan Scheme (RLS)has been replaced by the Growth Guarantee Scheme (GGS). The new scheme provides a 70% Government guarantee on loans to SMEs of up to £2m million in Great Britain, and £1m in Northern Ireland.
The original Recovery Loan Scheme was put in place to help SMEs grow and invest through government-backed loans. It was seen as a lifeline for many smaller firms, who were still reeling from the effects of Brexit and COVID. The scheme was also very popular, with government figures showing that it has supported almost 19,000 businesses, each borrowing an average of £202,000.
The new Growth Guarantee Scheme is essentially another extension of the original scheme, which was due to end in June 2024 (the current plan has the Growth Guarantee Scheme running until the end of March 2026). The continuation of government support is great news for smaller businesses, especially those battered by economic turbulence over the last few years.
Although we have a fresh government in place, the scheme is expected to continue. We look forward to hearing how small businesses will be further supported, especially as Labour made a pledge in their manifesto to improve access to finance for smaller businesses, especially startups.
In this article, we answer frequently asked questions about the Growth Guarantee Scheme.
What is the Growth Guarantee Scheme?
The Growth Guarantee Scheme replaced the Recovery Loan Scheme on the 1st of July 2024. Accredited lenders can offer a range of finance solutions including asset finance, invoice finance and business loans.
These lenders must first offer their standard products, but if these can’t be used, they can use a 70% government-backed guarantee to give extra security so that they can lend as part of the Growth Guarantee Scheme. It’s important to remember that this guarantee is there to facilitate the finance, but the borrower is still liable for the entirety of the debt.
An SME must make more than half of its income from UK-based trading to be eligible for a loan. The business must not be in any financial difficulty and they have to be able to afford what they’re borrowing. This means that businesses will still face all the usual credit and fraud checks.
What is classed as an SME for the purposes of applying for finance through the Growth Guarantee Scheme?
An SME is essentially any smaller business with no more than £45m turnover. If an SME is part of a group, then the whole group’s income is considered.
Can every industry use the Growth Guarantee Scheme?
Businesses from every sector can use the Growth Guarantee Scheme; however, some sectors, including agricultureand fisheries/aquaculture are subject to a borrowing cap.
What can the Growth Guarantee Scheme be used for?
One clear benefit of the Growth Guarantee Scheme is that the finance can be used for a wide range of reasons. An SME might choose to hire new staff, upgrade their equipment or buy new plant and machinery, fit out their premises or invest in new vehicles. These could also use the cash for simply boosting working capital or helping to manage their cashflow.
What is the minimum SMEs can borrow under the Growth Guarantee Scheme?
With Origin Finance, businesses can borrow from £10,000 with asset finance and invoice finance. For loans, borrowing starts at £25,001, through the Growth Guarantee Scheme.
Can SMEs borrow with the Growth Guarantee Scheme if they’ve previously used another government-backed scheme?
Yes! Even if your business has used the Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS), Bounce Back Loan Scheme (BBLS) or the Recovery Loan Scheme (RLS) you’re still able to apply for finance with the Growth Guarantee Scheme. However, if you have borrowed under a previous scheme, it’s likely that you won’t be able to borrow as much using the Growth Guarantee Scheme.
Does borrowing under the Growth Guarantee Scheme require a personal guarantee?
Not necessarily. Personal guarantees are at the lender’s discretion and will often depend on your circumstances.
How can Origin Finance help?
Despite being a government-backed scheme, interest rates, fees, and term lengths from lenders will still vary. As a broker, we can find the best solution available for your business. This can provide huge value for you as securing a competitive rate over a length of time that works for you can make a big difference to your day-to-day finances. What’s more, we don’t charge for our services, as we’re directly remunerated by the lender.
By partnering with Origin Finance, you’ll also be speaking to a passionate team with a wealth of experience in helping smaller businesses succeed. They’ll be able to advise you on the options available and even complete the paperwork to give you the best possible chance of success.
Get in touch for a free, no-obligation quote today.
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Too many people are struggling to find finance for their businesses. Why is this?
A recent Parliamentary report on SME Finance found that “2024 is a difficult time to be an SME seeking finance” and that the situation has worsened in the last six years. In 2023, the acceptance rate for an SME applying for finance fell to around 50% (from 80% in 2018). If you bear in mind that SMEs make up 99% of all UK businesses, that means that nearly half of those who apply for finance are getting rejected.
It’s a worrying thought. SMEs are the backbone of our economy, many of which are startups that often rely on finance in their early years so that they can invest and grow to become successful.
Not only are SME’s struggling to find finance, many have become pessimistic about approaching lenders. This seems to be for two reasons. Firstly, there is a lack of trust in lenders and secondly, SMEs are worried about having their applications rejected. Finance acceptance rates for SMEs from high-street banks have been falling ever since the global financial crisis.
The report makes for depressing reading, even going as far as to suggest that many smaller businesses had given up on looking for growth (which has big consequences for the whole of the UK’s economy, affecting everything from our productivity to our employment levels). Recent economic turbulence has also caused problems for hard-working businesses, with many worrying about high interest rates affecting their ability to afford finance as a way of funding investment.It’s clear that too many businesses have just lost faith in the commercial finance industry. At Origin Finance, we share their frustration — especially as we know that it doesn’t have to be this way.
Businesses don’t realise there are other options
One of the most interesting parts of the report was that only 5% of SMEs would consider looking for another lender if their own bank rejected them. The reason given for this shockingly low figure was that many SMEs aren’t aware that there are alternative finance providers on the market who might be able to help them secure the funding they’re seeking.
An “alternative finance provider” is essentially any lender that isn’t a high-street bank. Alternative finance providers can have more flexible lending criteria than high-street banks, making them an option for any SMEs that have struggled to get finance through traditional channels. Many of these are specialists in specific areas, such as providing funding for startups and SMEs. Some may even aim their services towards certain industries like construction, etc. Other lenders will also offer more tailored solutions like Equipment Finance, Invoice Finance and Refinance. There is also the potential for securing lower rates than traditional banks.
The benefits of using a finance broker
The SME Finance report gives two main reasons why SMEs might struggle to secure finance, and using a broker can potentially overcome both of these.
Firstly, a business may have been rejected by their usual bank and not known that there were other options available to them. Believe it or not, there are actually hundreds of finance lenders in the UK — not just the big-name banks. However, nearly half of these lenders will only accept applications that have come via a broker.
Secondly, a business may not be able to afford the rates offered to them by their usual bank. Using a broker gives you a full view of the market, allowing you to look beyond your high-street bank and secure more competitive rates and better terms for your business.
How Origin Finance can help
The finance sector needs to do much more to help SMEs. But there are options out there for ambitious businesses looking for funding.
At Origin Finance, we’ll work hard to improve your chances of successfully securing funding. We do this in several ways.
We start by taking the time to get to know your business. By learning about what drives you and your plans for the future, we’ll be able to present the most suitable financial option(s) for your situation. And every lender is different. They each have their specialist criteria, and some will have a specific lending niche. We’ll use our market knowledge to match your business to a lender who has a track record of providing funding for similar companies so that they’ll understand your needs. We’ll also make your application shine. We know what lenders are looking for, so we’ll do all the paperwork to present your business in the best possible light.
Looking for funding for your business? We’d be happy to have an informal chat about your finance options. Get in touch today.
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