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written by | March 23, 2022

Requirements for a Medical Equipment Loan

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The Healthcare sector is worth billions of dollars in India, and we don't need to explain how lucrative the medical line is. Are you planning to open a diagnostic centre or a clinic? Do you have an existing one and are planning to expand it? Well, it's the perfect time to take action!

The medical field can bring you immense revenue, but at the same time, medical equipment costs a lot. No worries, you've got the choice of availing a medical store loan without much hassle. But what are the criteria for approving a loan for a medical store, and what are the eligibility requirements? We'll explain everything in this guide! But, first, let's share some of the interesting information you should know to be eligible for a medical equipment loan.

Did you know?

Individuals must have a minimum of an MBBS or BDS degree to avail loan facility for medical equipment. Individuals seeking the loan must be between 25 and 65, though this can vary from one bank to another.

Features of Medical Equipment Loan

With the medical sector expanding rapidly due to the increasing demand, companies require more assistance in terms of financing. The major characteristics of this loan product include:

  • The loan will be used for the sole goal of buying medical equipment and its ancillary needs.
  • Over a certain amount of loan, collateral must be offered.
  • The duration of repayment typically is between 12-84 months.
  • The loan for medical equipment covers financing for equipment, credit requirements, project financing working capital, etc.
  • Banks can provide customised solutions to the financial requirements of healthcare professionals.
  • Due to the nature of the large investment, lenders offer financing at affordable prices, and, most importantly, custom solutions are designed to meet the needs of the business.

If you’re planning to open your medical shop, you'll need some necessary medical equipment. These include:

  • Hospital beds
  • Medical lights
  • ECG machines
  • Defibrillators
  • Integrated diagnostic systems
  • Traction Equipment
  • X-Ray machine
  • Mobility aids
  • Hospital stretchers
  • Ventilators
  • ICU equipment like emergency resuscitation devices, respiratory and cardiac support systems, etc.

These are just a few main pieces of equipment you'll need in a patient's treatment, and the list of this equipment can be very long. The more equipped you are, the more facilities you have, the more patients you'll be able to treat. 

Also Read: How To Start A Pharmacy Shop In India?

Who Can Apply for These Loans?

The loans for medical equipment are one kind of loan that is offered as part of healthcare loans.

Healthcare loans are categorised into three types: for doctors, dentists, and non-individuals.

Doctors

This loan is available to doctors who plan to open their medical clinics. The amount you'll be eligible for will depend on the bank you choose to approach. For instance, if you go to Dena Bank, you can get a loan of up to ₹2 crores. Also, these ₹2 crores will be with the top margin calculating 25%.

Dentists

The loans available to them are specifically designed for dentists. The loan amount is lower than doctors

Non-Individuals

"Non-individuals" reference partnerships, companies, proprietorships, private corporations, trusts and so on. The loans available to them differ from loans for individuals as they usually have greater borrow amount limits.

Eligibility Criteria

If you're planning to avail a loan in the healthcare business, then, first of all, you should be in this industry. There are a few more eligibility criteria:

  • Super-specialty or speciality hospital,
  • Dialysis centres,
  • Pathology lab,
  • Specialty clinics,
  • Pharmaceutical manufacturer,
  • Diagnostic centre,
  • IVF centres,
  • Minimum 3-5 years of business experience in the healthcare field,
  • Any sort of healthcare/trusts/private/proprietorships companies,
  • Minimum 1-year repayment track record,
  • Banking transactions record for the last one year with any scheduled bank, 
  • Should possess registrations/approvals to operate from authorities.

Also Read: Ultimate Guide To Starting A Medical Lab

How to Apply

To avail of a medical shop or equipment loan, the best way is to visit the closest bank branch and discuss with that bank's representative various requirements, features, eligibility, etc., for the loan.

Many banks offer medical equipment loans customised to your business needs. So, we'd advise you to share your expansion or set-up plans in detail. A personal consultation can be the biggest helping hand to ensure the best loan terms. 

You also make an initial inquiry online and discuss your doubts and requirements with the service team. Since these service teams operate 24x7, you get all support over the phone anytime. 

Having personal relations with bank managers proves to be highly helpful in the cases of such loans.

If you have a relationship manager with your preferred bank, one can place their request to avail such a loan through him.

Documents You’ll Need

To qualify for this loan, you'll have to submit specific evidence to banks. The required documents will differ for each bank; however, some of the most common includes:

  • KYC (Know who you are) documents are required for individuals.
  • For private limited companies, an MOU or partnership deed may be necessary.
  • You can also submit the payment information of any loan you've repaid in the past 12-month period or longer.
  • Certain banks require you to provide bank statements for the past 12 months.
  • In the case of both companies and individuals, banks could need the ITR documents from the past three years.

Advantages of Such Loans

Like every business loan, medical equipment loan aids in ensuring that operations run well and aids in expanding the business without impacting the liquidity of the business. Other major advantages of this loan include:

  • Banks won't demand collateral if you are looking for smaller sums of loans for medical equipment. It is different from bank to bank.
  • Medical equipment can be quite costly, and it's difficult to use the working capital to purchase the machines, tools and other equipment. This loan is useful in these situations.
  • With tailored loan solutions to meet the needs of the healthcare industry, you can make use of these funds to advance other business interests without interrupting the current business.
  • Flexible repayment terms help businesses prepare their budgets accordingly.
  • This type of loan assists small/mid-sized labs, clinics, and diagnostic centres in managing their financial needs.
  • The most competitive interest rates are available.

Interest Rates and Other Additional Expenses

Banks offer Interest rates according to the loan amount and the loan's total tenure. This industry demands very heavy investment, which is why banks offer competitive interest rates.

It is a continuous business cycle, and that's why banks feel fewer risks while providing medical set-ups loans. Normally, banks offer a fixed interest rate in the region of 11%-13%. These are some of the charges related to medical shop loans.

The loan amount

Ranges from ₹5 to ₹20 crores.

Late Payment Penalty

1% -2% per month on due EMI

Processing Fee

1% of the entire loan amount

Repayment Period

3-7 years

Prepayment charge

5% of the remaining amount

Insurance

On Actuals

Banks Providing Medical Shop and Equipment Loans

These banks offer loans in India:

  •  SBI
  •  HDFC Bank
  • DHFL
  • Bajaj Finserv
  • IDFC Bank
  • YES BANK

Conclusion

We have discussed the required eligibility, terms, benefits, etc., of availing a bank loan for a medical shop business. The application process is hassle-free too. We also covered which are the best banks in this case. A bank representative will be the best person if you've got any doubts before beginning the process. 

Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.

FAQs

Q: What’s the easiest way to avail a government loan for medical store?

Ans:

The Indian government's 'Jan Aushadhi' scheme offers you quick loans for small-scale business startups, yes, including a medical shop also.

Q: What is Mudra loan for medical shop all about?

Ans:

Mudra Yojana is a highly supportive loan scheme initiated by the Indian government. It offers loan sums up to ₹10 lakh for MSMEs and individuals to begin their new business without asking you for any security or collateral. Yes, you can avail of this loan for your medical shop also.

Q: Which bank offers MSME loan for medical shop?

Ans:

SBI and HDFC are the top choices in India currently.

Q: Does the bank demand a guarantor?

Ans:

No, the guarantor's need is concluded based on the bank's policy and the loan amount you borrow.

Q: What percentage of the required medical shop loan amount will I receive?

Ans:

You generally don't get a whole amount of coverage. However, you'll still get a healthy percentage of the amount you need for your whole project.

Q: Will I receive the loan money in a lump sum?

Ans:

Most banks offer the fund in instalments to meet the expenses as they come. However, there are a few banks that do offer loan amounts in lump sums.

Q: How will I have to pay the loan back?

Ans:

You can pay your loan through electronic clearance, post-dated cheques, or standing instructions.

Q: Should I open a bank account where I want a loan?

Ans:

A few banks require you to open a savings/current account before allotting the loan. However, it's a case of bank policy, which differs from bank to bank.

Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.
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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.