Medical Equipment Business Loans
With a constantly growing population, increased life expectancy rates, government regulations dedicated towards healthcare, and vital, innovative technological advancements, the medical supply industry remains an essential business for the United States economy. The medical supply industry definitely has large, major players; however, a majority of the medical supply industry is made up of small and medium sized businesses. This has led to an incredibly diverse and competitive industry, but the medical supply industry has proven to be resilient. Even during the Great Recession, the medical supply industry remained steady. Today, there are a variety of areas that are changing the way medical supply businesses operate, produce products, sell products, and reach key demographics.
There are two major areas that comprise the medical supply industry, but there are also a few other areas to specialize in the industry:
- Medical Devices: This niche of the medical supply industry includes any article, instrument, apparatus, and/or machine that is used to prevent and diagnose an illness or disease. There are a variety of medical devices that can detect, correct, and/or modify a structure or function of the body to improve overall health.
- Medical Equipment: Where medical devices require user training to be implemented and successfully utilized, medical equipment is typically used in addition to other products by medical professionals to diagnose, treat, or rehabilitate a patient. This typically excludes implantable, disposable, or single use medical devices.
- Other Medical Supply Specialties: The other subsectors of the medical supply industry include: in-vitro diagnostic substances manufacturing; electro-medical and electrotherapeutic apparatus manufacturing; irradiation apparatus manufacturing; surgical and medical instrument manufacturing; surgical appliances and supplies manufacturing; dental equipment and supplies manufacturing; and ophthalmic goods manufacturing.
While most medical supply businesses offer a variety of both medical devices and medical equipment, many medical supply stores have found niche areas to focus on. Even though the medical supply store industry is incredibly resilient and has made its mark in the healthcare industry, many small and medium sized medical supply businesses have found the benefits to keeping inventory low while focusing on key products. Through the next five years, the medical supply store industry is expected to see continued growth driven by constant demand for better quality healthcare services. The decreasing unemployment rate and more insured patients has also fueled, and will continue to fuel, this demand.
Medical Equipment Industry Trends
The medical supply industry is here to stay, especially with growing innovation and technology based products and services throughout every industry. There are many important trends that are helping to grow the medical supply industry, however there are a variety of government and regulatory pressures that will continue to disrupt this vital industry. For small and medium sized medical supply businesses in particular, staying on top of current industry trends is essential to remaining profitable in this highly competitive industry.
- Government Regulations: With 2016 being an election year, the Affordable Care Act has been under intense scrutiny. For now, there are many uncertain outcomes for government regulations relating to health insurance, Medicare, and Medicaid. In 2013, a 2.3 percent excise tax was placed on the domestic sale of medical devices and equipment to healthcare providers in an attempt to raise more than $30 billion for Medicare and Medicaid expansion, but unfortunately this tax has left many smaller medical supply businesses losing money – especially for medical supply companies that focus on unsophisticated medical goods (i.e. tongue depressors, etc) that already have thin profit margins. The medical supply industry is still struggling to adjust to these taxes, but unfortunately, everything is still up in the air until the new president is in office. As mentioned above, the possibility of too many Americans being uninsured if the Affordable Care Act is dismantled could pose many issues for the medical supply industry. Since the Affordable Care Act, medical supply businesses have had the comfort of knowing that hospitals have the ability to purchase necessary, expensive medical items, but the industry may be in for some unexpected outcomes in the next few years. Staying on top of the changing government regulations will be one of the most essential trends for the medical supply industry.
- Home Healthcare: As mentioned in other industry analysis’s, the home healthcare industry is the fastest growing sector of the healthcare industry today. Actually, the home healthcare industry is growing faster than almost any other industry in general. More and more aging adults want to stay in the comfort of their own home, and advanced technological medical equipment and devices are making this possibility a reality for so many people. Even though the medical supply industry is heavily reliant of other healthcare sectors such as hospitals, there is a rapid shift towards a medical supply products to facilitate home healthcare needs. The home healthcare industry was once thought of as a passing fad, but studies have shown that this industry is here to stay, becoming a vital component of the overall healthcare industry. This is a major niche area that many successful medical supply companies are starting to cater to.
- Technology and Innovation: Innovative technological products are influencing every single industry today, but for the medical supply industry in particular, focusing on the newest innovations is incredibly important. In such a competitive industry, medical supply businesses will have to invest capital into startup medical research companies that show promise. To stay ahead in this diverse and competitive industry, many small and medium sized medical supply businesses are focusing on finding the latest niche product that will revolutionize the medical supply and healthcare industries. The most important technological innovation that all sectors of the healthcare industry are starting to focus on is 3D printing.
- 3D Printing: Many different industries are starting to implement 3D printing for a variety of purposes, but for the medical supply industry, this implementation is relatively new. Through 3D printing, the medical community is finding a variety of essential uses: custom designed hearing aids, custom designed bone replacements (i.e. knees, hips, etc), dental and other implantable, prosthetic reconstructions, and so much more. The uses are endless, and many medical supply businesses are dedicating plenty of time and money into making this futuristic product a reality.
Types of Medical Supply Company Loans
| Types | Rates | Terms | Funding |
|---|---|---|---|
| Bank | 6-10% | 3-7 years | 14-30 days |
| SBA | 6-10% | 3-7 years | 10-30 days |
| Line of Credit | 5-15% | 1 – 3 years | 7-30 days |
| Alternative | 6-25% | 1-5 years | 5-7 days |
| Cash Advance | 1.16-1.55 | 3-24 months | 1-3 days |
Medical Supply Company Bank Loans
Conventional business financing provided by a large, small and community bank or credit unions. Financing offered by traditional lenders can be both term loan and line of credit. Traditional financing uses can be used for a wide range of business uses, including working capital, refinancing and consolidation, acquisitions, equipment purchases, and just about any other business purpose.
Medical Supply SBA Loans
SBA enhanced financing can help a small business that have been unable to get approved for a bank loan to obtain bank-rate financing. The SBA guarantees a portion of the loan to reduce the lender’s risk to help encourage more lending to small businesses.
Alternative Medical Supply Loans
Medical supply companies and wholesalers that are unable to get approved for traditional financing should look to alternative lending sources to finance their businesses. While the rates aren’t as good as conventional loans, they are affordable and offer very fast funding.
Medical Supply Company Cash Advance
Merchant cash advances are the sale of the medical supply company’s future receivables, credit card transactions or bank deposits in exchange for easy business financing at a discount to the funding company.
