It's not an uncommon scenario for healthcare providers to find themselves in need of vital equipment and technology but are also facing budget constraints.

This can create challenges for providers, physicians, and patients and can potentially disrupt or delay medical treatment or diagnostic testing.

However, there may be ways for equipment manufacturers, systems developers, and their finance program providers to work together to implement solutions to deliver the equipment their customers need today – and move all or a portion of the total equipment cost into subsequent years’ budgets.

“There are various ways to structure financing to meet the individual finance and accounting needs of healthcare providers, and one of the most common is a ‘Bridge to Budget’ payment plan that can help close the gap between urgent needs and budget restrictions,” said Dan Casey, PNC Vendor Finance Healthcare.

How Bridge to Budget Plans Can Benefit Medical Equipment, Technology Manufacturers, and Healthcare Providers

  • Hospitals, clinics, and physicians’ offices can get the medical technology they need quickly and avoid considerable unbudgeted acquisitions.
  • The institution can begin using the equipment right away and immediately begin generating income.
  • Physicians are able to begin using the equipment to diagnose or treat patients now.
  • Manufacturers can close the sale now without delays in full funding.

How Bridge to Budget Payment Plans Work

Providers generate income from the use of the equipment – raising their level of patient care – with absolutely no payments for the first 90 days and interest only payments in months four through twelve.

  • Healthcare providers acquire the equipment/technology with the Bridge to Budget plan.
  • Immediate use of equipment generates instant revenue.
    • No payments for first three months of use
    • Nine interest-only monthly payments (interest only)
  • At the end of the first 12 months, the healthcare provider has options:
    • Purchase the equipment at the end of year one, less 50% of the interest paid.
    • Continue making payments through an extended 24- or 36-month term at low rates available through the manufacturer’s PNC Vendor Finance Program.
  • At the end of the term selected, the healthcare provider takes full ownership of the equipment.

EXAMPLE OF BRIDGE TO BUDGET PLAN FOR $180,000 ASSET1

Sample payment plan: year one
  • Customers acquires system or equipment.
  • Customer begins generating income.
  • Bridge to Budget payments
    • 3 payments absolute $0.
    • 3 payments about $898.
    • 3 payments about $1,435.
    • 3 payments about $2,156.

Customer options after 12-months
  • Purchase for about $180,000.
  • Continue to finance with PNC
    • 36 months at $5,483.65
    • 48 months at $3,941.90

Payment amounts shown are for illustrative purposes only. Actual rates and payment amounts can vary by time, asset financed and customer.

A Solution for When Healthcare Providers Need Diagnostic or Treatment Equipment Right Away

The Bridge to Budget solution can offer a variety of finance structures to help overcome budget constraints and meets the individual needs of hospital, clinics and other healthcare providers.

It starts with carefully determining the provider's specific finance and accounting needs.

  • Deferred payment plans can work for institutions and practices in which the current year’s budget has been fully depleted, but the next year’s budget will be available within the next few months.

The deferred payment plan offers low monthly touch payments only for the first six months and slightly higher payments for the remainder of the term.

  • Step-Up payment plans offer lower monthly payment amounts at the beginning of the term and increase gradually as revenue grows – matching the monthly expense of an investment with the income realized by use of the equipment. 

For example, a clinic with three existing locations opened a fourth location with payment ramping up as predictable usage and resulting revenue build over time.

  • Step down payments allow for making larger payment up front when known budgets are available, and lower payments in future years to allow for other acquisitions planned for future years.

For example, the customer is planning extensive facility renovations over the next couple of years and might consider this option, knowing it is important to reduce expenses for the next two or three years.

Let's build your brilliant

PNC Vendor Finance works closely with program clients to develop tools to help equipment manufacturers and systems developers looking to increase sales, enhance the purchasing experience, and drive revenue growth. Whether you’re looking to establish a financing program or learn more about the benefits of financing for your customers, contact PNC Vendor Finance. Visit pnc.com/vendorfinance for more information.