Medical Equipment Financing Market- Growth, Trends, Covid-19 Impact, And Forecasts (2022 - 2027)

Medical Equipment Financing Market- Growth, Trends, Covid-19 Impact, And Forecasts (2022 - 2027)

The medical equipment financing market is projected to register a CAGR of 7.5% during the forecast period (2022-2027).

COVID-19 had a big impact on the healthcare financing industry. One of the first issues for some hospitals during the pandemic was figuring out how to handle the inflow of patients. There were bed and ventilator shortages, ambulances were in such high demand that non-ambulance vehicles were modified with equipment to offer patient transport, and personal protective equipment (PPE) was in limited supply. Non-emergency and elective surgeries were discontinued. Dental, optical, and wellness tests were rescheduled. The loss of normal care hurt income and staffing. Healthcare businesses rushed to build COVID-19 test kits, while pharmaceutical companies shifted gears to begin developing vaccinations as soon as feasible.

According to an August 2020 titled "COVID-19 and Its Impact on Healthcare Financing," there was a significant shift in demand for equipment. Customers of DLL, a global asset finance partner, have to deal with frequently changing budgets and equipment requirements. Flexible financing options have responded to changing needs by enabling the rapid deployment of key assets and the preparation for an influx of future processes when the economy improves – all while keeping upfront cash constraints to a minimum. Hence, such scenarios that create alternative & flexible options for financing are likely to boost the market growth over the forecast period.

With rising incomes, the demand for high-quality healthcare and related services is increasing exponentially. And, rather than being a differentiator, being able to give the most up-to-date medical practices and standards has become a requirement for doctors. However, improving facilities or investing in cutting-edge medical technology is not a simple undertaking. For most small healthcare service providers, this entails hefty costs that are nearly prohibitive. Using existing funds to purchase medical equipment might stifle working capital and disrupt the cash flow needed for daily operations. As a result, taking out a medical equipment loan is the most cost-effective way to ensure that patients have access to the best medical care without breaking the bank.

Premium, creative, and high-quality healthcare are in high demand worldwide, especially in a fast-growing country like India. To meet the expectations of this expanding market, healthcare providers must deliver the most technologically advanced kinds of medical treatment and related services. The medical facility's services are determined by the equipment it employs. Premium services become increasingly prevalent as infrastructure improves. Hence, the increasing need to upgrade the product will likely create demand for financing solutions, thereby boosting the market growth.

Another element driving market expansion is technological advances in the market and increasing patient demand. To address the changing requirements of patients, the healthcare business, like any other, requires technology. From computerized medical records to modern diagnostic equipment and patient monitoring systems to diabetes and blood pressure monitors, the technical infrastructure is a major determinant of patient care quality. As hospitals, clinics, and health centers compete for a competitive advantage, the demand for innovative equipment has skyrocketed. The growing need for sophisticated machines has been spurred by the aging population and expanded healthcare penetration in small towns and rural areas, and the medical industry is under pressure to keep up. Hence, this will likely create demand for medical equipment financing, boosting the market growth.

In addition, market participants are launching new products to fulfill the growing global demand. For example, the country's largest lender, State Bank of India (SBI), introduced a new business loan scheme for the healthcare sector called "Aarogyam Loan" in June 2021 to provide loan support in the wake of the novel coronavirus epidemic. In July 2020, the World Bank Group's private sector arm announced the creation of a USD 4 billion financing platform targeted at increasing the manufacture and supply of vital healthcare items in developing countries to aid in the fight against the coronavirus pandemic. As a result, such activities are anticipated to promote growth in the future.

Thus the above-mentioned factors are expected to drive the growth of the market druring the forecast period. However, Lack of awareness in developing and underdeveloped regions is expected to hamper the growth of the market.

Key Market TrendsThe Hospital and Clinics Segment is Expected to Hold a Major Market Share in the Medical Equipment Financing Market

There is an increasing prevalence of infectious and chronic diseases such as cancer, cardiovascular, diabetes, and many more. According to the Global Cancer Observatory (Globocan) Statistics 2020, there were 19.3 million new cases of cancer all over the world, accounting for both sexes in 2020, and the same source reported that the incidence of cancer was growing at a rapid pace in the world and estimated that the number of new cases of cancer in both sexes will reach to 30.2 million by 2040. Hence, the increasing disease burden demands advanced instruments and healthcare facilities, which are likely to favor market growth over the forecast period.

Moreover, patients' demand for advanced care has propelled hospitals to invest more in upgrading their facilities as people are more drawn toward hospitals for treatments. Besides, owning advanced medical equipment is essential for the medical professional, enabling advanced diagnosis and treatment. The capital-intensive process of acquiring medical equipment has been made simple and easy with medical equipment loans and leases.

Several financial organizations offer healthcare workers and doctors bespoke lending solutions at competitive rates. Instances include HDFC Bank, SMC Finance, National Funding Etc. Top lenders also provide health practitioners personalized lending options at the lowest feasible rates, typically without collateral. Because of the fierce competition, several lenders have simplified their loan processes to attract more applicants. The entire procedure has become simple and speedy. Most lenders now have online applications requiring a lender to fill out a form, attach the required papers, and submit it. The loan is normally authorized within a few hours or days, and the funds are transferred directly to the lender's bank account. Hence, the easy financing procedure is projected to boost its adoption, thereby boosting the market growth.

North America is Expected to Hold a significant share in the market and is expected to do the Same in the Forecast Period.

The Covid-19 outbreak put a significant strain on the United States healthcare system. It was also under a severe financial strain, which was overlooked. All elective inpatient and outpatient surgical operations and all elective medical visits were canceled due to social distancing and other epidemic control strategies. Although telemedicine is replacing some of the latter, clinical volumes and revenue have decreased across the country. Many hospitals were financially strapped. Ambulatory practices have high fixed costs and no recourse to finance or other liquidity sources. Hence, Covid-19 severely impacts the market growth.

The Equipment Leasing & Finance Foundation (the Foundation) has announced the Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) titled "COVID-19 study reveals equipment leasing and finance industry's confidence has improved". The Foundation also released highlights of the COVID-19 Impact Survey of the Equipment Finance Industry, which found that 89% of equipment finance companies have offered payment deferrals, including extensions, modifications, or restructuring, based on 98 survey responses collected from August 3-14. The total MCI-EFI increased to 48.4, up from 45.3 in July.

The market is largely driven by the rising geriatric population, increasing prevalence of chronic diseases, and demand for advanced quality healthcare is putting immense pressure on healthcare to meet the population's increasing demand. As per the United States Census Bureau’s 2021 senior report, more than 54 million adults ages 65 and older live in the United States today, accounting for about 16.5% of the nation’s population. The number of older adults living in the United States is growing. By 2050, the total number of adults ages 65 and older is projected to rise to 85.7 million, roughly 20% of the overall United States population. As the population ages, so does chronic diseases. Hence, this increasing geriatric population will likely demand more advanced healthcare facilities, driving market growth over the forecast period.

As per the Equipment Leasing And Finance Association’s (ELFA) 2021 Survey of Equipment Finance Activity, in 2020, medical equipment represents 4.5% of equipment financing new business volume in the United States. Also, as an end-user of equipment finance, the health services industry represented 5.8% of new business volume. According to “What’s Hot, What’s Not: Equipment Market Forecast 2021,” based on a survey of ELFA members to measure industry perceptions of equipment types, The medical industry’s preference for leased equipment continues unabated, driven by demographics linked to the increasing health care needs of the ‘baby-boom’ generation.

Thus the above mentioned factors are expected to contribute to the growth of the market in this region.

Competitive Landscape

Medical equipment financing is fragmented and competitive and consists of several major players. Some of the players operating in the market are Hero FinCorp, National Funding, Blue Bridge Financial, LLC, First American Equipment Finance, SMC Finance, Siemens Financial Services, Inc., SLR Healthcare ABL, TIAA Bank, JPMorgan Chase & Co., Macquarie Group Limited, Truist Bank, and HDFC Bank.

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