Quick Guide to Medical Equipment Loans in India

It is estimated that the healthcare sector in India will reach $145 billion by 2018. If you have been thinking of setting up your clinic or diagnostic centre or expanding an existing one, this is probably the best time to do so. Even though the high cost of medical equipment may be a deterrent, but there are several funding options available today for both doctors and medical establishments to move ahead with their expansion plans of buying or leasing medical equipment.

Let us take a quick look at the funding options available in three different scenarios.  

1. Medical Equipment Financing

As the name suggests, medical equipment financing is a loan that exists to cater to the needs of doctors and consultants working with private practices who seek to buy medical equipment. Equipment is costly and a lot of doctors are increasingly opting for medical equipment loans as they are easy to avail. These loans are given against the equipment being purchased.

2. Business Loan

If you are looking to renovate your clinic, hire more staff, or buy new speciality medical equipment, you can avail from INR 10 Lakhs with a flexible tenure up to 7 years with this loan. It doesn't require any assets to be pledged and offers an open line of credit.

3. Loan Against Property

Loans against property can be used for any purpose because there is a collateral involved. This finance can be used to take care of daily expenses, pay wages, finance equipment or expand premises.

While the above represent various options available for buying such equipment. The most suitable loan product however for medical practitioners and hospitals continues to be medical equipment loans. There are several advantages that this loan offers and this is why you must consider exploring this option.  

1. Low Interest Rates: The interest rates on doctor loans are usually very attractive and offer great flexibility.

2. Affordable EMIs: EMI's on these loans are affordable and can be spread out as desired. Loans can be repaid in pre part-payment or foreclosed depending on borrower's repayment capabilities.

3. No Hidden Fees or Charges: Loans often have a range of additional hidden fees and charges which are billed at the time of signing the sanctioning letter, however, these loans usually don't have any such additional charges.

4. Avail Higher Loan Amounts: Borrowing amount varies from one lender to another, but lenders usually finance loans between INR 1 lakh - INR 1 crore.

5. Quick Approvals: Medical loans are approved quickly. Doctors tend to get more leeway than they would under traditional underwriting schemes. This relieves you from the uncertainty of not knowing when the funds will be available to you.

1. Part/ Pre-payment Facility: If you have surplus funds that you can divert to repayment of the loan, you can do that at no extra charge. The only condition is that the part repayment amount must be equal to or more than 3 EMI's.

Eligibility and Documentation Requirements:

1. Eligibility:

   1. Public, Private, Partnership, Trust, Society & Individual Doctors certified by recognized medical institutions.

   2. At least 5 years of experience in the field & minimum 3 years in current business.

   3. Business profitability as per industry norms.

   4. Satisfactory credit & financial history.

2. Documentation:

   1. Verified last 3 years audited financial statements and projections.

   2. Profiles and KYC of Directors/ Partners/ Proprietor.

   3. Company constitution documents and registration certificates.

   4. Indian Medical Association Certificate.

Often, getting the right amount of funds is a crucial element of the whole expansion plan. The whole medical set up and equipment purchase will depend on how much money is available at your disposal. This is why medical loans come in extremely handy since it only makes sense to realise your dream.