Healthcare Equipment Financing: Navigating High Costs and Rapid Technological Advancements

Financing healthcare equipment is a critical challenge, especially with high costs and rapid technological advancements.

By adopting a strategic approach, you can ensure your practice remains current without exceeding your budget.

Transcript

Welcome to another episode of Smarter Equipment Finance podcast. My name is Robert Jackson. You can call me RJ, and I'm with Chet Zeken.

Hello.

President of Smarter Equipment Finance. I'm just a average guy that's been here for six years. So that's just my position, if you must know. Today, we're gonna be talking about health care equipment financing and kinda navigating the high cost and the rapid technology of that.

So, Chet's in a different position than myself.

I'm actually I got my finger on the pulse of the clients on a day to day basis, so to speak. And, with the health care industry is something that myself and another representative in our company kinda services to some degree. So I have, somewhat, you know, experience in it, I guess. But what would you say the biggest concern someone would have seeking medical equipment if they were to look for financing? If they were to call us on the phone or come to us through one of our vendor partners, what do you feel would be the most important factor for them considering us?

Well, that's a that's a good question. I've got a lot of experience in working in the, the medical side myself, you know, over over my career.

And, you know, what I found is incredibly important for, you know, somebody in the medical in industry to to take into consideration is is, one, is a finance company that can kinda match their pace.

You know, the the equipment finance industry is a fast paced industry. We like to move quick.

That's how that's how we service our clients. Right? We we get information. We've gotta make things happen fast. Otherwise, you know, what good are are we? Right? And and I know that in the health care industry, specifically, it it is very challenging for the decision makers, you know, to be available at times.

So I think, you know, finding a a finance company that understands that and, you know, is willing to, you know, make certain to be available when they're available or, you know, set times, but also, somebody that understands the medical industry enough to to to not just treat it like, a normal piece of equipment. We're we're, you know, by default, we're generalists, meaning, like, you know, us as smarter finance, we've got people that specialize in a lot of different industries.

And, and and when it comes to, medical equipment, there are special programs that are available out there for medical professionals that aren't available to, you know, our other clients that are in construction or transportation or, you know, anything else.

So, you know, to me, it comes down to finding a a finance company that has an understanding of them, their industry, but also how the financing, you know, impacts their business, and has the programs that are available to suit them. Right? There's a lot of brokers out there or finance companies that have, funds available for medical professionals, but they don't necessarily have, access to the programs that we do. We are able to use, for instance, the licensure date of when, you know, a doctor or a nurse, you know, becomes licensed as opposed to the day that they file a secretary of state. Right? And a lot of other companies have access to, you know, programs like that as well, but I think that, you know, we've done a really good job of making a good footprint out there in the medical world.

You know, we've been pretty specific, you know, in what we've helped with.

You do a lot in the, with chiropractors.

Yes.

We've also got a good footprint in, like, digital imaging, you know, MRIs, x rays, CRMs, and Veterinary equipment as well. Yeah. And we've been doing a lot of veterinary equipment. That's right.

Yeah. And, you know, I feel like we've we've we've been able to really surpass our client's expectations in those situations because we do understand we know what it's like in their situation. They're not available much. We need to be quick. We need to be direct. We need to be thorough.

But we also do have some programs that I think a lot a lot of companies out there just aren't even aware of, and, we we put those to use, to work for our clients.

Okay. Now to to kinda piggyback off of that, when it comes to the costs of these machines, they tend to be pretty expensive.

Oh, yeah.

They can absolutely be more than a million dollars.

Absolutely.

Is that gonna be a problem for us?

No. I mean, obviously, you know, the the the dollar amount for a transaction just helps us determine which of our underwriters is gonna be a potentially better fit for the client. Okay.

But medical equipment is expensive.

You know, it's it's based on technology. And as we know, you know, technology is expensive, but it also has, you know, a much shorter life span than a lot of, heavy equipment out there.

So choosing the right finance partner when you're buying a large piece of equipment like that, it's extremely important because not only do you have, you know, the other things that I mentioned to keep in mind, but medical professionals, you know, truly do need a finance partner that's gonna be there to work through there with them because, equipment updates, they happen very frequently. Mhmm.

You know, the MRI machine that's the top of the line today in in five years, Not to say it's obsolete. Yeah.

You know, but but the but the value just isn't there anymore, and that happens with all technology equipment, not only in medical.

Okay.

Mhmm.

I wanted to kinda mention something a little more important. It's talking more about kind of value as opposed to price, and I'm gonna kind of tell you a personal story with that.

There's a particular client of mine that I've done five transactions for, and, he's a very successful, business owner. He has multiple practices in three different states.

Yep.

And I asked him why he continues to come back to me repeatedly for his equipment. He tells me, you save me time. I don't have to bother with anybody else. I call you. I tell you what I need. I give you what the invoice, maybe bank statements if they're needed, but more than more than likely they're not.

Mhmm.

But he calls me because of his time management. Yeah. So that to him is more important than just searching around the Internet looking for the best rate because it's negligible to him when you put the cost savings, the opportunity cost, the depreciation that he's gonna get on the equipment Yes. It doesn't make sense for him to just waste his time calling anybody and everybody online. Yeah.

So A A hundred percent.

Well, you you that's a that's a relationship that that started off, right, with with an initial transaction and you you and the client, and I know you're just talking about with, you know, great client. We, you know, the first year, you kinda, you know, figure each other out. Yeah.

You know? And and, you know, this is something I think that you've always done really well with your clients is, you know, on that initial call, you kinda find out you you you find out specifically what's important to them.

Yeah. But the the I guess, more or less, the point I was getting to was these guys are busy. Yeah. They're very busy. They have to manage their time appropriately.

So what we try to do is we try to accomplish as much as we can in the shortest amount of time. So, generally, within fifteen to twenty minutes is all we really require to find out if we can help you. That's that's really it.

Just Absolutely.

If you can give us your if you're open minded enough and set a scheduled time Mhmm. To give us fifteen minutes, we can see if we can help you. That's it. Yeah.

That's all it takes.

Absolutely. You've, you've been doing pretty well in that, you know, in that chiropractic sector. Mhmm. What have you found has been most important to your clients other than time, that you've worked with?

I would say aside from rate because everybody's gonna be concerned about the rate Sure. It would probably be, upfront costs. Okay.

Lot of times, these equipments can equipment can range from sixty thousand dollars for a a simple spinal decompression imaging machine.

And oftentimes, they don't wanna put up money to secure the loan because it's self collateralizing transaction as it is.

So that's the other thing that they do. So many times we can get a hundred percent of the financing costs. So if they qualify, they don't have to put anything out of pocket. And in some cases, we can even push their payment out as ninety days to give them a little bit of breathing room.

Yeah. You know, the upfront the upfront cost is extremely important. I think, a lot of people, I think, have this impression that, you know, doctors are just making money hand over fist, you know, regardless of which vertical they're in.

It's extremely expensive to run any type of a medical organization.

You've got, in in addition to the regular costs, right, they're they have a lot of inventory that they blow through that they've gotta pay for, you know, their insurance costs.

Insurance costs or employees tend to cost cost more because they've gone through a lot of school. Mhmm. They've gone through Tend to not be a hundred hours.

Yeah. Exactly. You know, and and, upfront cost when we're looking at, you know, a piece of medical equipment, it's very important. You know, a a lot most medical professionals that we deal with, right, they're, you know, they're usually smaller shops. I I personally have worked with a couple of large hospitals as well. But even there, right, the costs are so out of control that, you know, they they that that upfront money is incredibly important to them.

And so, you know, we've we've got a lot of, you know, kinda like zero down opportunities or, you know, maybe one or one or two payments in advance, opportunities with a lot of these, medical professionals. And you're you're finding that that's been a that continues to be an important factor for them. Mhmm. We had talked about, you know, how the fact that people are just living longer nowadays.

Right?

The advancements in medicine are what have allowed that to happen.

And, you know, obviously, when we're looking at the, the medical industry just as a whole, It's an expensive business to run. They need expensive equipment Maintain it. To to maintain that business.

The good news about medical industry is that it's, it's pretty consistent. You know? People are always gonna get sick. People are always gonna get hurt. People are always gonna need to get their spine stretched out. There's, there's there's a you know, the the need for doctors and medical professionals is ignoring him. He isn't going anywhere.

Because of the advances in technology and because people are living longer as a result of that. Right?

You know, it's it's an industry that's gonna continue to need to be serviced.

But because it's also pretty consistent, lenders out there have created programs that make it a little easier for medical professionals to buy equipment than, you know, our transportation clients, for instance.

You know, they they tend to be more stable, a lot less risk involved, and, you know, while cash flow, while they're not maybe, you know, running flush with cash at all times, there's a consistent stream of revenue coming in from, you know, from clients and insurance companies and products.

And so it's been an it's been an industry that's always done really well for us and one that we're we're, you know, gonna spend a lot more time in here in the in the coming years.

When you're dealing with medical professionals, how important is that, you know, that that monthly payment or the rate? I mean, obviously, I know that it matters, but but at the end of the day, how impactful is the rate and the monthly payment in the decision making process of, somebody in the medical, medical sector?

I guess it would depend on the what's important to the person on the other end.

Some people are more focused on the monthly expense than they are anything else, whether it's a term loan or otherwise. Mhmm.

So with somebody like that, they could care less on having an early buyout.

If somebody wants to pay it off earlier, have the privilege or the option to pay it off, which is something that we can grant Mhmm.

Then we can accommodate that as well. So it just depends on the individual because I've had both types.

So what you're saying is it's still coming down to that initial phone call, that fifteen to twenty minute call that you that you mentioned a minute ago. Mhmm. Right?

We have to see if we're a good fit for one another because we don't know if we can help you yet.

And we don't and you don't know if our service is gonna help you. So we have to really kinda listen to what you mean and not what you say.

Yeah. Absolutely.

What would you say are some challenges that your clients or our clients would face that are that are in the medical business?

I would say that the biggest challenge we'd see is qualifications because equipment of this caliber, usually requires that we have a someone who can support it. And when I say support it is if you're someone who's fresh out of medical school and you've got medical debt and high credit card revolving and and things like that, it may not be the best position at that time to get into something like that. It really just really may not be. Yeah. And and that's just being honest.

Yeah. Well, yeah, everybody's situation is different. Right? And so when you're, in that type of a situation where you've got somebody that's you can't really say somebody's green because, you know, they just finished, you know, eight years of school.

Right. But, but somebody like that. Right? They've got other things that they have to take into consideration.

There's the cash flow. There's also the consistent steady stream of business. And that's I guess I'm guessing that that's what you're referring to is you gotta have something to kind of you you have to have you have to have a a a foundation, client base per se, right, that's that's able to kinda support your growth model.

Yeah.

You know, I've, done some done some work with some hospitals in the past, and, and I know I've mentioned this to you in the past.

There was a large, cancer treatment hospital, that was built in, Oklahoma when I was gonna first first get my, feet wet in in this industry. And I felt like I was wet like, way out of my league. Right? I'm, I mean, like, in my mid twenties, and I'm trying to put together, like, a five million dollar deal for this massive hospital that we see on TV on commercials all the time. And it was a it was a little bit of an eye opening experience because, well, one, normal people.

Mhmm.

Right? Business is easy until you get people involved.

Just normal people. Had a great time working with them, you know, and they they kind of understood that I was green on my side.

But what they liked is I I I think that there was an opportunity there to kinda get to know the equipment finance industry with a relatively new eager sales rep. But, you know, we were able to put together, you know, in, it took about, you know, three weeks, but we put together a five million dollar package for a hospital, which is a very small percentage of what they needed to build that place out. Like, there's there's, like, one room.

But when I think about it and I look back and I'm like, this was, like, you know, almost twenty years ago. And the amount of lives that were potentially saved in that room is is substantial, and it's, it's it it it it's a it's another thing that gives purpose to what we do.

Servicing the medical, you know, the medical industry, the health care equipment sector, it's important to me for for multiple reasons. And one of them being, you know, this is something that, you know, people need this.

You need it. I need it. Every everybody listening to this needs it.

Absolutely. Absolutely.

And and that's a that's that's a nice little feather in the cap that, you know, we're able to help somebody that's helping somebody else. But, you know, our our our business model is to is to help business owners.

And, you know, health care professionals are, you know, they're extremely important. Right?

Competent business owners we deal with.

Absolutely. Absolutely. They've got a they've got a business model of, you know, they've got just, you know, almost automatic repeat business, but it's a hard business. And, you know, when when you're running a a business in the health care sector, like you mentioned, time is important, down payment is important, and quite frankly, the the avail the the ability to not have to deal with all the shit that happens on a lot of on a lot of other transactions in other sectors. Right? We don't have to deal with titling, Yep. You know, equipment.

It can be done in twenty four to forty eight hours. That's how quickly these things can turn around.

Yeah. Yeah. And, you know, the price is right. We're able to get, you know, these customers qualified. You know, we can get them qualified right out of school. Yep.

But but the, I guess, the our ability to kind of pivot, and meet the customer where they are, especially in that in that health care sector, I think is is a is a is a real good advantage. It's an industry that we're will continue to service. We absolutely love it, and I think that we're gonna do a good job of growing it here in the next couple of years.

Alright. Well, I just wanted to, extend a hand of gratitude to everybody listening and say thank you very much. My name is Robert Jackson, RJ for short. And, if you need to, talk to anybody about medical financing, call our phone line, talk to me.

Thank you. Appreciate you. Thanks, RJ. You're welcome.