Medical Equipment Finance

A part of Healthcare Finance is incorporated with the objective of leveraging the growing healthcare market in India. It caters to professional doctors (both general and specialists), diagnostic centres, specialty clinics, nursing homes and small to medium hospitals involved in diagnostic/health care with specializations in fields viz. radiology, gynaecology, cardiology, ophthalmology, etc. This Facility can be availed for ECG Machines, MRI Scanners, Ultrasound Scanners, C T Scanners, X Ray Machines, Colour Doppler, Linear Accelerators, Day Camera Mammography, Cathlab, Monograph X Ray Fluoroscope (Indian & Imported Machines), Ophthalmology Endoscopes etc. Imported High End Medical Equipment’s like MRI Machines, CT Scan Machines PET CT Scan, Cat Labs, Ultrasound Machines, Colour Doppler, Linear Accelerators etc are also funded.

Features & Benefits of Medical Equipment Loan

Types of medical equipment loans

Medical equipment loans are just one type of a loan offered under the umbrella of healthcare loans but they too can be categorised into 3 main types.

Loans for doctors

This is a loan that can be taken by doctors who intend to open their own medical facilities. The amount that you will be eligible to take would depend on the bank you approach. For example if you approach Dena Bank then you can borrow up to Rs. 2 crore with a maximum margin of 25%.

Loans for non-individuals

Saying non-individuals refers to partnership firms, private companies, trusts, proprietorships, etc. These loans are different from those meant for individuals because they tend to have higher limits on the amount that you can borrow.

Loans for dentists

These loans are designed specifically for dentists and the amount you can borrow is lesser than the loan for doctors.

Eligibility criteria for medical equipment loans

The eligibility criteria for companies and individuals seeking a medical equipment loans is:

• Individuals need to have a minimum qualification of MBBS or BDS.
• Doctors specialising in Homeopathic, Unani and Ayurvedic medicine can also apply for this loan.
• The age limit for individuals applying for the loan is defined as being in the range of 25 years and 65 years though this may differ from one bank to the next.
• If a company is applying for this loan then the promoters of said company should have a minimum qualification of MBBS or BDS.
• Certain banks may also require that the applicants be members of councils.
• The credit history of individuals applying for the loan needs to be spotless. They should not be considered defaulters by any bank. If there are co-applicants for the loan then their credit history too must be completely clean.
• Some banks may also require that you should have been residing at your current address or have had you current office for about 5 years.
• They may also require that you have a minimum of 3 years of experience in running a medical facility.

Documents required

To be able to take this loan, you will need to provide certain documents to the bank. These documents may be different for each bank but some of the common ones are:

• KYC (Know your customer) documents will be required in the case of individuals.
• Some banks, like HDFC, might require that you submit bank statements for the last 12 months.
• You may also have to provide the payment details of any loan that you have paid back over a period of 12 months or more.
• In case of individuals and companies banks may require your ITR documents for the last 3 years.
• In case of private limited companies an MOU or the deed of partnership may also be required.

There may be a possibility of the bank requiring you to submit

Interest rates for medical equipment loans

Most banks offer a fixed rate of interest on the loans that are slightly above their base lending rates. This means that the interest rates can be as low as 12% per annum. However some banks even offer interest rates that are charged based on a monthly reducing balance which means that the interest you have to pay reduces as you pay the loan back.

Features and benefits of medical equipment loans

• These loans can be taken from banks and non-banking finance companies.
• Since medical equipment can be very expensive, these loans offer very high limits. Individuals can borrow as much as Rs. 2 crore and companies even more.
• Some times the amount that you can borrow may also be dictated by the city you are in. This means that if you are in a metro city then you can borrow the most as compared to other cities though this feature may be available only to companies.
• The general repayment period for these loans can go up to a maximum of 7 years with some banks offering repayment periods slight higher than that.
• Banks may also charge you a processing fee for the loan which tends to be 1% to 2.5% of the loan amount. The processing fee depends on the bank that you take the loan from.
• With online banking becoming more and more popular, many of the banks allow for applications for these loans to be submitted online.
• Some banks like Punjab National Bank are even offering a 20% discount on the up-front fee if the application is submitted online.
• In the case of some banks, the time that it takes to issue the funds will depend on the amount you want to borrow. The higher the amount the longer it takes to dispense the funds though it should not take longer than 6 weeks.
• While providing a collateral is not mandatory, banks may ask for it if your loan amount exceeds a limit set by them. In some cases there may even be a requirement for you to have a guarantor for the loan.
• Banks may have margins that you will have to pay. In the case of some banks like Bank of Baroda, there may be a margin of 25% applied in case the collateral you provide is not enough to cover the loan you take.
• This loan is not just restricted to hospitals or doctors. It can also be taken by medicals labs, diagnostic centres, nursing homes, speciality clinics, etc.
• Some lenders may allow you to pay the loan back early without charging you a prepayment fee.