Good healthcare infrastructure is one of the most essential needs of a society. It is a constantly evolving field, with new cutting-edge technology introduced to the medical world every day. A piece of diagnostic machinery or medical equipment comes at a high cost and arranging the funds, especially in an urgent situation, can be quite a challenge.
Public health infrastructure in India is largely funded by the government. For private medical institutions, the path to arranging finance is not that simple. Healthcare finance is however, one of the simpler fund sourcing options for clinics and hospitals. These institutions can turn to various financial entities, such as HDFC Bank, for funds that can help with expansion, machinery acquisition and other infrastructural costs.
Who can avail of Healthcare Finance?
Healthcare Finance is a type of Business Loan that can be availed of by a wide range of businesses and professionals who are engaged in providing medical services and products. Thus, the list of businesses eligible for applying for healthcare finance would include the following:
Specialty and super-specialty hospitals and nursing homes that need funds for machines and equipment, manpower acquisition, and civil infrastructure
Test centres, including diagnostic clinics, pathologist labs, endoscopy centres, etc.
Specialty clinics, such as skin clinics and dental clinics, as well as dialysis centres and IVF clinics
Medical and paramedical colleges, dental colleges, and other educational institutes
Large medical equipment dealers
Pharmaceutical companies
Types of Healthcare Finance assistance
Various types of financial support are designed to meet the needs of a medical institution or medical business.
Asset financing: One of the most common requirements these businesses and establishments face is the need to buy or upgrade their equipment. Be it a new MRI machine or a batch of motorised hospital beds, healthcare asset financing can be used as the source of funds. A new establishment can procure basic needs, such as X-ray machines, CT scanners, ultrasound machines, etc. with medical equipment finance.
Infrastructure loan: This form of healthcare finance can be utilised to acquire or construct a new medical facility. It can also be used to expand an existing facility, transfer an existing term loan or Working Capital Loan.
Working capital finance: This mode of healthcare finance can be used to meet working capital needs, like payroll processing, consumable purchases and other operational costs etc.
Merchant establishment overdraft facility: This facility allows overdraft limits to the borrower (in this case, the medical institution) against the credit card swipes in the medical establishment. They can use this facility to meet their establishment’s working capital needs.
Bank Guarantee and Letter of Credit: These can help healthcare businesses to purchase medical equipment or machinery from anywhere in India or across the world. The financer acts as the surety and can offer such Bank Guarantee or Letter of Credit in rupee as well as foreign currencies.
Buyer’s credit: If medical consumables or assets are imported, the borrower can finance their import bill and get the buyer’s credit. This will help in prompt payment to vendors and faster possession of the required item.
HDFC Bank Healthcare Financing – the why and how
To enable medical businesses to not only grow but thrive and provide the best services to the common folk, HDFC Bank offers all the aforementioned types of healthcare finance solutions. Here’s a look at some of the features of this financing service:
Flexible tenure – As a medical establishment or business, you can avail of a loan through HDFC Bank Healthcare Finance for a tenure between one and seven years.
Competitive pricing – All loans, Bank Guarantee and funding services are provided at highly competitive rates. In case of remittance against foreign purchases, HDFC Bank's network of overseas branches charges a lower commission.
Expert advice – There is a dedicated trade finance desk to offer expert counsel on any matters related to healthcare financing.
Fast processing – With the HDFC Bank Trade Finance app, you can authorise transactions anytime and on the go. HDFC Bank MyBusiness import services can also help ensure that import transactions are carried out without delay.
What will you need?
To apply for healthcare finance from HDFC Bank, the medical business applicant should have run a healthcare business for at least three years(Separate schemes are available for running business from 1-3 years and greenfield projects). Other requirements include:
The applicant must submit the completed application form
Furnish ITR and income and financial statements for the last three years
Copy of MOA or partnership deed, depending on the type of business entity
Project report or similar document explaining the fund requirement
Repayment record of past or existing loans
And KYC documentation of the entity and its promoters.
After the healthcare finance is approved, the loan agreement is signed, repayment measures (ECS/SI/Post-dated cheque) are finalised, margin money receipt is exchanged, along with the presentation of any other documents as specified in the loan’s terms and conditions.
With these simple steps, HDFC Bank Healthcare Finance is disbursed. In the case of asset finance, the invoice gets hypothecated, and an insurance copy gets endorsed in favour of HDFC Bank till the repayment of the loan. By ensuring timely repayment, your medical business can use funds to provide the best medical facilities to its visitors.
Contact your closest bank branch now to get more details!
Read more about the different types of financial products for the healthcare industry here.
*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Loan at the sole discretion of HDFC Bank Limited. Loan disbursal is subject to documentation and verification as per Bank's requirement. Interest rates are subject to change. Please check with your RM or closest bank branch for current interest rates.