For D.C.s just starting out, or well-established doctors looking to expand, asking the right questions and choosing the right equipment financing can make a big difference when it comes to budgets, balance sheets, and the bottom line. Where you get your financing will matter just as much as the financing option you choose.
by Tony Dickinson, President - NCMIC Finance Corporation in Get Financing on Monday, July 24, 2017
Finding an equipment financing company that’s right for you will depend heavily on the size of your business, your geographic location, and, most of all, the particular equipment that you need. But the same basic procedures — and red flags to watch out for — apply. The more questions you ask and the more information you have will help you make an informed decision and put you in the driver’s seat when choosing equipment financing — and may just save you lots of headaches and thousands of dollars in the long run.
How familiar is the company with the chiropractic profession?
Unlike a bank, which doesn’t care what specific purchases you make with your loan, equipment financing companies should have a stake in your profession and the item(s) you’re financing. You want to choose someone who’s familiar with the chiropractic profession and, at minimum, understands the type of equipment your business requires.
What kind of support is provided by the company’s representatives?
Like anything, look for a company that’s been around for a long time with a credible reputation in the field. Experience and professionalism are important because you want to work with someone who is going to help you get the best financing possible, not just take your order and slap you with a loan or lease.
NCMIC's representatives are always available to assist you when you need it. In fact, we’ve helped thousands of doctors acquire the equipment financing they needed to expand and grow. Unlike some banks and other non-bank finance sources, we make financing simple and easy. With our Fast-Track Service, you can count on quick quotes, speedy credit decisions, and same-day funding to the vendor of your choice. Bottom line: With financing from NCMIC, you get your equipment faster, which means you start earning profits sooner, too.
What types of payment options are available?
This is particularly important if you’re considering leasing equipment. While fixed payments are the norm, they aren’t your only option. If your practice's cash flow changes with the seasons, you might want to ask about setting up a “skip lease” payment plan. With this type of lease option, you get to skip payments during slow months without being penalized. Alternatively, “step up” leases might be a better option if your practice has limited cash and you’re depending upon the acquisition of specific equipment to increase revenue. This type of lease keeps payments low at first then ramps them up according to a predetermined schedule.
Note: NCMIC offers a variety of loan repayment plans up to 60 months. You also have the ability to defer your first payment up to 90 days. This means you can start earning revenue before making any payments.
What are the total payments and costs?
Asking this question will eliminate any future misunderstandings about the number of payments, the total monthly payment due, and any additional costs related to insurance, taxes, and other charges such as delivery fees, security deposits, application or origination fees, hidden fees, or undisclosed service charges. Have your lender provide you with details of all financing and service fees you may be charged throughout the life of your contract, including late payment fees, prepayment penalties, and other surcharges. Don’t forget to ask about down payments, and whether first and last payments are due up-front.
It’s a good idea to ask your lender to itemize all fees before, during, and at the end of the contract. Also ask whether the quoted rate includes all costs and payments. You will want to inquire about any penalties if you choose to pay off early, and if future interest is included in the payoff amount. We often times review contracts before our policyholders sign and find numerous hidden fees. There are things like auto renewal clauses that allow a company to extend the repayment term if you don’t notify them within a specified timeframe. These extra payments can really add up.
That’s why it’s important to review any contracts and obtain legal assistance if needed before you sign. This is the only way to ensure you don’t lose your right to pay your financing contract in full when you would like, or that you aren’t penalized substantially for paying it off early.
Here’s another tip: Don’t base a loan decision on the interest rate alone. Other fees and penalties mentioned above can be far more detrimental in the long run. Don’t get distracted by home or auto loan interest rate offers splashed in the media. You won’t have much luck getting one of these low-rate offers for a business equipment loan.
When you finance with NCMIC, you won’t experience any of the hidden fees you might find in the marketplace. We don’t have any application fees, bank transfer/ACH charges, end-of-term buyouts, forced-placed insurance, prepayment penalties, or customer service fees. You can finance 100% of your equipment with no up-front payment. What you see is truly what you get.
Do you have records of your accreditations and government licensing?
It’s critical that you work with a company you know and trust to provide the best financing terms and service. Check with the Better Business Bureau just to make sure no complaints or fishy-looking statements have been filed about the financing company. There should be state-by-state financial regulatory agencies, as well as financial licensing, that can confirm a company's legitimacy, too.
What information do you need about my business?
When you’re ready to seek financing, you should be ready to share basic financial information about your business, just like you would with a typical bank loan for an auto or home improvement. But if you’re interested in financing for the first time, you will want to obtain an application before you’re ready to apply, just to see what types of information are required. Be wary of any equipment finance company that can’t provide you with an application; or worse yet, one that makes you send in money to apply.
If you have questions about whether you’re getting the best financing, we encourage you to call NCMIC’s Lease/Loan Comparison Hotline at 800-396-7157, ext. 6939. While we cannot provide legal advice, we will review any lease or loan contract you’re considering and compare it to our terms so you don’t get caught paying a bunch of hidden fees. We’re here to help and will continue to be the fair and honest solution for your equipment loans.