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How to qualify for aesthetic equipment leasing?

Posted On: June 18, 2018 author Paul Kendall

Getting equipment leasing in the medical industry is relatively easy compared to other industries. When you are looking to lease laser equipment or get outside funding for any part of your business, you’ll be asked whether your business is medical or non-medical oriented. They will also ask if the company is MD owned or non MD owned.

This question is largely due to non-medical lasers (i.e., aesthetic lasers) coming up as “restricted” for a large majority of equipment lenders.

What’s the difference between medical and non-medical lasers?

Non-medical laser use revolves around improving the appearance and aesthetic of a client. For example, aesthetic laser using businesses will utilize tattoo removal laser equipment, a hair removal laser machine, and laser technology to remove cellulite.

On the other hand, a medical laser instead focuses on improving the overall health of the client, rather than fixing blemishes and other aesthetic based improvements.

Why are aesthetic lasers “restricted” by so many Banks?

For many financing companies, an aesthetic laser business will raise a red flag. This could be for a variety of reasons, although primarily because of three reasons:

  • Aesthetic laser companies have a higher tendency to fail than their medical-based counterparts.
  • During the recession these businesses were the first to go under because no one had money to spend on vanity anymore.
  • Used aesthetic lasers reduce in value faster and have very narrow uses, making it difficult for an equipment lender that doesn't specialize in the aesthetic equipment industry to resell.

 

Thankfully, if you operate an aesthetic laser business or need to get funding, there are manufacturers out there that have the right resources, assets, and network to properly deliver you the equipment funding you need. Just because it might be harder to get funding from your local bank for aesthetic equipment doesn’t mean that a company like yours shouldn’t at least try to find it through an aesthetic laser manufacturer.

What do I need for laser leasing?

Laser leasing is possible for companies that meet certain requirements. Primarily, laser equipment financiers are going to be looking for how long you have been in business and how good or bad your credit score is.

However, even if you don’t have perfect credit and you’re just starting out, you can still get funding. As your business appears “riskier” to a potential financier, you’ll have to cover for that risk in some way. Typically this means offering collateral, a higher deposit, or higher repayment rates.

How much are laser leasing rates?

There is no one quick answer to telling you how much your laser leasing rates are going to be. There are many factors (including the stats I mentioned above) that play into how much your rates will be. Laser equipment financing companies will be looking at the following:

  • Credit Score,
  • Time in Business,
  • Cash Value of Assets,
  • Available Collateral,
  • Down Payment Amount,
  • Medical vs. Non-Medical laser and,
  • Doctor vs Non-Doctor owned company
  • What you want to happen at the end of your financing term. (FMV, $1 buy out, 10% PUT)

 

Trust Capital can structure deals in a way that allows you to control how you finish off your financing repayment and whether or not you keep your equipment.

  • Small Buyout - you get to own your laser equipment at the end by making a very small payment ($1 is common) in exchange for higher monthly payments.
  • Percentage Buyout - you’ll make a percentage based (typically 10%) payment, based on the equipment purchase price, and get to keep the equipment at the end.
  • Fair Market Value - also known as FMV, this option allows you to simply pay the remaining Fair Market Value of the machine and give you the option to either keep your laser or return it so that you can choose another model. FMV tends to be the most affordable option because it offers you the lowest monthly payment. You also get to write off 100% of your payments off your taxable income.

 

Based on an equipment purchase valued at $50K, you’ll be looking at the following estimated monthly payments for 60 months:

  • Small Buyout ($1)
    • Low Risk: $1K
    • Medium Risk: $1.2K
    • High Risk: $1.4K
  • Percentage Buyout (10%/FMV)
    • Low Risk: $950
    • Medium Risk: $1.1K
    • High Risk: $1.3K

 

Click here for a aesthetic laser lease calculator to calculate how much your laser leasinng payments could be and how many lasers you can afford to buy based on your monthly budget.

The best option for your business will vary depending on your own (and business) financials, the goals of your business, whether or not you want to keep your equipment, and more. Always consult with a financier and ask a lot of questions to determine the best option for your own company.

Ready to Apply online for aesthetic equipment leasing? Feel free to call Trust Capital and speak with an aesthetic equipment leasing specialist that can take your application over the phone at 866-458-4777.

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