Healthcare businesses often require large amounts of funding for expensive medical assets, acquisitions, property or medical commodities. Due to the volumes involved and the specific needs of the sector, healthcare funding requirements are not always catered for by conventional banks. Funding may be unavailable or be charged at a higher premium than other sectors.
Access to adequate funding is essential for healthcare businesses to grow. Many businesses depend on expensive medical equipment. For instance, the latest MRI scanners can cost £760,000 - £1.8 million, a 3-D mammography machine over £500,000, a robotic pharmacy sorting system £6,200- £40,000, and a dental chair £3,000 - £22,000.
There are six styles of funding often available to healthcare businesses:
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Cash flow is a major concern for most companies, and unpaid invoices can lead to financial problems and even insolvency. Invoice financing can remove the headache whilst freeing up capital.
For most businesses, cash flow means balancing working expenses against prompt payment of invoices by customers. Late paid invoices can cause frustrating service delays, uncertainty, and an inability to plan effectively.
Commercial mortgages are long term business loans secured against a commercial property such as a hotel, shop, office or factory. They are similar in some ways to residential mortgages and a 15-25 year term is normal. They are commonly used to purchase business premises to operate from.
A short term property-backed loan is considered to be a bridge between now and a future situation when it will be replaced by some other source of longer term funding. It is extremely common in commercial property markets as a stop-gap while a mortgage is being arranged.
Property development finance is a type of working capital finance used for large scale property development projects. The nature of development is capital intensive and can be seen as risky. The cost of finance reflects the level of risk associated with the project as assessed by the lender.