Start-up healthcare businesses often require funding to acquire property, assets, staff and medical supplies. What is the best way to raise finance? A range of funding options are available from conventional lenders and specialists operating in the healthcare sector. The best product for you depends on your type of business and what you need the finance for. Let’s look at this in more detail.
The healthcare sector in the UK operates on a mixture of public and private funding. Most healthcare services are provided through the government-funded NHS, but there is also a thriving private health sector – and many healthcare professionals operate on a mix of NHS contracts and private funding through independent sources.
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.
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