Business Loans For Medical Supply Distributors

Business Loans Medical Supply Distributors

The rapid innovation of medical products have increased demand among hospitals and health care providers. According to IBIS World, the industry has grown on average by 3.7% between 2015 – 2020.  In fact, the market size of the medical supply industry in Canada is worth approximately 22 billion dollars. Given the market outlook of the medical supply industry, being a medical supply distributor can be a lucrative business. 

Importance of a Business Loan

Whether you’re an established or novice medical supply distributor, a business loan can be a valuable tool on your journey toward success. A business loan can help you pay off your various property and sales taxes, as well as financing the cost of the land your distribution location is built on, all of which can be expensive. In fact, there are limitless other possibilities for the use of your loan, including: 

Paying Your Supplier

As a medical supply distributor, you’ll need to find the right supplier, then finance the cost of overseas and/or cross-country shipping, as well as the packaging and delivery of your items. 

Purchasing items from your supplier. Learn how to create a purchase order.

Inventory Costs

Often distributors will have to deal with a surplus or a shortage of supplies, which can increase inventory costs. For a medical supply distributor, you may find yourself with a surplus or a shortage of surgical tools, first-aid kits, treatment chairs, instruction manuals, sterilization chemicals, canes/wheelchairs and other reduced mobility items.

Hiring and Training Employees

Every business requires support to properly run their business operations. As a medical supply distributor, you’ll need to hire and train shipping and warehouse personnel, marketing staff, customer service staff and more. You may also need to hire technicians to install and repair a large assembly line for your warehouse.

Purchase Equipment

Buying the necessary warehouse equipment such as forklifts, electric pallets, cargo stackers, rolling ladders, shelving, trolleys, safety gear and other tools are essential to your business.  You may also need to finance the costs of buying and maintaining a line of distribution/supply trucks.

Marketing Costs

Marketing your business is necessary to gain awareness and build sales. You may need to finance the advertising items and distribute them throughout various medical facilities such as senior living residences, hospitals, clinics, dental practices, sports arenas, pharmacies, and more. 

Best Business Loan Providers For Medical Supply Distributors

AmountAPRTerm (months)
SharpShooter Funding1k-300kFee-Based: Starting at 9%12- 60 Learn more
OnDeck5k-300k8% – 29% 6-18Learn more
Lending Loop1k-500k+5.9%3-60Learn more
Thinking CapitalUp to 300k8%-22%6-12 Learn more
Merchant Growth5k-500k-6-18Learn more
BDC100K +6.05% +60Learn more
IOU Financial5K-100k15%+12-18Learn more

Calculating The Cost of a Business Loan

Before applying for a business loan, it’s important to calculate your cost of borrowing. Understanding how much you can borrow can save you from taking on more debt than you can handle. Here are the four main factors to consider when calculating the cost of your business loan. 

  • Interest Rate – The interest rate you qualify for will have the biggest impact on the cost of your loan. The higher the rate the more interest you’ll pay. Improving your credit score, reducing your debt and overall increasing your desirability as an applicant will help you secure a low rate and keep the cost of your loan down. 
  • Fees – The fees charged by your lender often increase the cost of your loan by more than what you’d expect. Be sure to ask your lender about all the current and potential fees you may incur. This includes administrative fees, loan origination fees, maintenance fees, NSF fees, late payment fees, and prepayment fees. 
  • Loan Amount – When borrowing you need to consider how much you need and how much you can afford. For example, if you qualify for $500,000, is it something your business can comfortably repay? Borrowing more than you need or can afford can lead to higher costs and potentially unmanageable amounts of debt.
  • Loan Term – Your loan term is another factor that determines the amount of interest you’ll pay on your loan. While longer terms provide smaller and more affordable monthly payments, you end up paying more interest. Similarly, when you choose a short-term loan, you end up saving on interest but your monthly payments will be higher. 

Calculate Your Business Loan Cost

Credit Score

Poor Good Excellent
Number of Payments
0
Monthly Payment
0
Total Interest
0
Total Payment
0


View all tools

Qualifying For a Business Loan as a Medical Supply Distributor

  • Personal and Business Credit Score – In general, lenders will evaluate both your personal and business credit score to check your ability to repay debt. The higher your score, the less risky you’ll seem to the lender. For businesses that haven’t yet developed a business credit score, lenders will put more emphasis on your personal credit. 
  • Revenue – Lenders often have a minimum revenue or monthly sales requirement to qualify. This usually is a direct indicator of your ability to afford a loan. Lenders will require your revenue statements to verify your financial details.
  • Cash Flow – Having a strong positive cash flow indicates you’re earning more than you are spending. Lenders often consider your cash flow, as positive cash flow means you make enough revenue to not only pay your expenses but other debts as well. 
  • Assets – Lenders may require an asset in order for you to secure the loan. For example, your medical inventory supplies are business assets you can use as collateral. 
  • Debts – Your business debt level is another factor lenders consider when approving an applicant. In general, the more debt you carry the lower your ability to take on new debt. Paying off old debts and reducing your liabilities can increase your chances of qualifying. 
  • Time in business –  Lenders often require your business to be at least 1 -2 years old. Though some alternative lenders are willing to accept businesses that’ve been in operation for as little as 3 – 6 months. It’s a well-known fact that many new businesses fail within the first 5 years  As such, the longer you’ve been established, the less risky you’ll seem. 

 

Business Financing For Any Industry

Own a business in another industry? Click here

Business Loan Alternatives

A business loan is a versatile form of credit that can be used to finance any expense or project. However, there are many alternative business funding options, each with its own benefits and drawbacks. Depending on your needs, one may yield better results than the other. 

Equipment Loan

 If you need to purchase an expensive piece of equipment, an equipment loan can be a better choice as it usually offers lower rates and is easier to qualify for. The reason being, the equipment you purchase is used as collateral to secure the loan. However, unlike a business loan, lenders are usually only willing to finance up to 80% of the equipment price, so you need to pay the other 20% upfront or find another form of credit to fill the gap. 

Invoice Financing 

As a B2B, you’ll likely deal with slow invoices that can disrupt your cash flow. Invoice factoring can help you access these funds by selling your slow invoices to a lender at a discount. While the discount rate can be quite high, it is a fast and easy way to fund your business.  

Business Line of Credit 

When running a business you’re bound to run into unexpected expenses. While some expenses can be deferred others may require immediate attention. In such circumstances, a business line of credit can come in handy. It’s a reserve of cash that you can access at any point in time up to a credit limit. Moreover, interest is only charged on the amount you use and like a credit card you can reuse the funds as you pay it back. 

Frequently Asked Questions

Will my personal credit affect my ability to qualify for a business loan? 

Yes, to put it simply, your personal credit can affect your ability to qualify for a business loan. It can particularly affect your chances if you’re a small business who hasn’t yet established themselves or their business credit score. 

How do I increase my eligibility as a business loan applicant? 

In order to increase your desirability as a business loan applicant, you’ll need to work on improving elements of your business that lenders look at. In general, improving your credit score, reducing your debt level, cutting expenses and boosting your revenue or sales are great ways to increase your eligibility. If you need a business loan quickly, you can offer an asset or get a cosigner to reduce your risk as a borrower.  

Can I get a business loan for my medical supply distribution business if I have bad credit? 

Yes, there are many alternative lenders who provide loans to businesses with bad credit. Unlike banks, alternative lenders have much more flexible lending standards. Moreover, their approval is based on more than just your credit score. They evaluate your revenue, cash flow, assets, debts, time in business, and more when approving an applicant. 

Use a Business Loan To Fund Your Business Today

Securing a business loan through us is not only easy, it’s just plain convenient. With most banks, your applications can take days, even weeks to process, only to get declined when your financial status is not up to their lending standards. However, when you apply at Loans Canada, you’ll be eligible for:

  • Competitive interest rates 
  • Flexible payment plans 
  • Fasting funding (as soon as 2 days after your approval)
Research & Compare

Canada's Loan Comparison Platform

Largest Lender Network In Canada

Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.

Make Smarter Borrowing Decisions

Whether you have good credit or poor credit, building financial awareness is the best way to save. Find tips, guides and tools to make better financial decisions.

Industry Spotlight

What's happening with Canada's credit industry?

goPeer — Helping Consumers Achieve Financial Freedom by Connecting Canadians Looking For Financing With Canadians Looking to Invest

goPeer — Helping Consumers Achieve Financial Freedom by Connecting Canadians Looking For Financing With Canadians Looking to Invest

goPeer is Canada's first consumer peer to peer lending platform and connects creditworthy Canadians looking for a loan with everyday Canadians looking...

Read Post
Locator
Find The Best Rate
In Your Region
OR
Best Personal Loan Provider by Greedy Rates
Icon

Confidential & risk-free

All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.

When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.

Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.

Your data is protected and your connection is encrypted.

Loans Canada Services Are 100% Free. Disclaimer

Keep Track Of Your Credit Score

Subscribe with Credit Verify to monitor your credit rating and get your free credit score.