Financing of cosmetic and medical devices

What are the ways to finance cosmetic and medical devices?

Nowadays, more and more companies offering cosmetic services are choosing to purchase special medical and cosmetic equipment to improve the quality of services offered to their clients. However, the prices of these devices can be quite high, which is a barrier for many businesses.

Fortunately, there are various options for financing the purchase of these equipment, so that any company can afford them. In this article, we will discuss various ways to finance the purchase of these equipment, such as loans, leases, credits and government programs designed for businesses. We will also outline the advantages and disadvantages of each of these options to help entrepreneurs make a decision.

What are the advantages of financing?

External financing allows a company to grow faster and scale its operations. With the availability of additional funding, the company can invest in new projects, product or service development, as well as in the purchase of new machinery and equipment, which allows the company to increase its efficiency and competitiveness.

Another advantage of using external financing is that it allows the company to offload its own financial resources. This allows the company to better manage its resources and better plan for the future. External financing also allows for better flexibility in making business decisions, as the company is not tied solely to its own capital.

What are the disadvantages of financing in a company?

One of the main disadvantages of using external financing is that the company has to give back some of its profits in the form of interest or other fees associated with the loan or credit. This can lead to a reduction in the company's profitability.

Another disadvantage is that the company is obligated to repay its debt within a certain period of time, which means that it must generate adequate revenue to be able to repay the debt. If there is a failure to generate revenue or a failure to restructure the business, the company may have difficulty repaying the obligation, which can lead to financial problems and even bankruptcy.

What are the ways to finance cosmetic and medical devices in a company?

Equipment leasing

Leasing medical and cosmetic equipment is one of the more popular ways for companies to finance the purchase of such equipment. It involves a lessor (such as a bank or leasing company) making a particular piece of equipment available to a company for the lease period, after which the lessee pays lease payments.

During the term of the leasing contract, the company is the user of the equipment and is responsible for its operation and maintenance. The lessor, on the other hand, is responsible for insuring the equipment and for repairing and overhauling it in case of failure.

Leasing medical and cosmetic equipment has its advantages. It allows the company to avoid having to commit a lot of money to purchasing equipment. As a result, the company can allocate its funds for business development.

Leasing also allows the company to take advantage of tax benefits, as lease installments are tax-deductible. Lessors also often offer the option to replace the equipment with newer models at the end of the lease term, allowing the company to keep using the latest technology.

One of the downsides of leasing is that, unlike a loan, the lessee does not become the owner of the equipment at the end of the leasing contract. Also, the cost of leasing can be higher than a loan because of commissions and additional fees. Therefore, it is important to carefully examine all the terms and conditions of the leasing contract before signing and compare with other financing methods.

Credit

It involves the lending of a specified amount by a bank or other financial entity, which must be repaid in specified amounts and by a specified date. Such a loan can be granted for the purchase of new or used medical and cosmetic equipment.

A loan for the purchase of medical and cosmetic equipment has several advantages. First of all, it allows a company to obtain the equipment it needs without having to commit a lot of money. The loan also allows the company to flexibly adjust the installments and term of the loan to suit its financial capabilities. Another advantage is that once the loan is repaid, the enterprise becomes the owner of the equipment, allowing it to continue to operate or sell it.

One of the downsides of a loan is that, unlike leasing, a company must commit its financial resources to repay the loan. Also, interest rates on loans can sometimes be higher than on other forms of raising funds.

Renting

A medical and cosmetic equipment rental service consists of a company offering this service making equipment available to other companies or individuals for a specified period of time. As part of this service, the renter is given equipment to use for its operations, in this case to provide medical or cosmetic services.

The undoubted advantage of this form of financing is access to modern equipment, which is crucial in the medical industry, as it allows the company to expand its offerings, as well as to achieve better results in treatments, which translates into increased revenue in the company and customer satisfaction.

Medika offers cosmetic equipment rental, which is a favorable option for new salons, as it avoids the need to spend a lot of money on purchasing equipment. The service consists of the company making the equipment available to the renter for a period of 12 months, after which the renter has the option to buy back the equipment, continue renting, or return it.

The rental decision is made within 5 minutes, with only an ID card, making the process very quick and transparent. As part of the subscription, the renter pays a fixed amount starting from PLN 899 per month, which is independent of interest rate increases. In the specified installment, the renter receives a 12-month contract with no hidden costs, working on new equipment. Buying out the equipment is also attractive to the lessor and allows him to continue earning from the equipment after the contract ends.