If you're looking for a way to finance your next digital x-ray system to help make your business more efficient and productive, read on to find out about some of the different financing options available and what you should be looking for.
One dollar buyout lease
The first is a lease with a one dollar buyout. This comes into play at the end of the term which may have been anywhere from 24 months to 72 months, or occasionally longer. This option is usually based on credit, however for an equipment lease with one dollar buyout at the end of the term, you end up owning the equipment by paying one dollar.
Equipment lease
The other type of lease is equipment which is more accurately described as an equipment loan, rather than a lease. It's very similar to leasing but you own the equipment from the start. Additionally, the bank is regarded as the leaseholder, and could use the equipment to collateralize the loan.
Rates
For these options, the rate is subject to change based on your credit. In the current market, a 5.5% interest rate is typically a good rate. That rate can fluctuate based on your situation, for example, whether or not your business is a startup.
You may also want to consider if you have other businesses that you can utilize as collateral. For example, you may be opening up a new practice, but you've already been licensed and you have had an established practice for many years.
As mentioned earlier, in most equipment loans or leases, the term is anywhere from 24 to 72 months. The rate will fluctuate with the lowest rate being around 5.5% and upwards. For a startup business you could be looking at anywhere from 10-15%. Those with more challenging credit can see anywhere from 10-20% and even higher.
Licensing
Licensing of equipment is also important when determining leases and rates. For example, say your business is a startup but you have previously worked in a clinic and held your license for five to six years. Many times the underwriting conditions will consider your business as not a startup and will get you into preferred programs. Almost all of these licenses do not require a down payment, however, it will once again be based on credit.
Application
When financing digital x-ray equipment or medical imaging equipment, you can typically finance up to two hundred fifty thousand dollars with what we call an app. An application means you're not supplying financials or anything other than a standard credit application.
Similar to determining interest rates on leasing options, this also means the financier is going to look at your business, including; how credit worthy it is, and any trade lines that you have that are going to be similar to the equipment that you're purchasing. They're also going to look at your individual information.
Will this affect my credit?
Typically there will not be a trade line on your personal credit, though you may see a flag or an inquiry on your credit when they do a credit check on you as the personal guarantor. Generally, the trade line will go on your business credit and will not appear on your personal credit. However, some lenders out there are slightly different. For the most part, it will only appear on your credit if there is some reason why the business defaults and if they are unable to collect the remaining balance from you.
In conclusion
To be in the preferred program, those that are the 5.5%, you're going to be looking at someone with a FICO score of at least 700 or above and two years in business or utilizing that license as a way to establish that you've been in business for a period of time, even though your business is brand new. If you've been licensed for more than three years, the financer typically will recognize that and put you in the non-startup category.
If you’re interested in financing digital x-ray equipment, contact our team of experts to explore your options.
