Access to Capital for Medical Supplies Industries
Access to Capital for Medical Supplies Industries
Support for our medical frontliners must continue to be a priority and supply of their much-needed Personal Protective Equipment (PPE) must be uninterrupted as well.
As medical frontliners continue their duty to attend to Filipinos needing various health treatments, they remain outnumbered inside over 200 hospitals in Metro Manila. Even worse, there still isn’t enough for all frontliners across the country, including non-medical staff who were exposed to infected patients.
We have seen a slower growth in the total number of local cases this week, but the COVID-19 virus continues to spread across far flung areas of the country. While the curve is said to have not reached its peak yet, there will be a continuous need to supply all hospitals and medical frontliners with PPE on a daily basis, till even after the curve flattens.
If you’re in the business of distributing medical supplies and equipment or are thinking of pivoting your business to help supply the great demand in this industry, here’s a quick guide on to keep your business running and help our frontliners during this time.
High demand for PPE and Medical Supplies
Each hospital requires about 200-500 PPEs (medical mask, gown, gloves, goggles, face shield, etc.), per day. There is also a high demand for medical equipment such as isolation boxes that cover the upper half of COVID-positive patients to limit the virus’ contagion. As more and more infected patients need critical care, demand for ventilators, oxygen supply, IV fluids and dialysis machines have spiked.
Even if the medical supply and equipment industry is projected to make positive revenues over the short-term or while the medical community battles the COVID-19 pandemic, sociologists and researchers have reported that health and safety will continue to be a priority for most people. There is a new normal in today’s global economy, whether we like it or not. In a Nielsen market study centered on the new normal for consumers, it reported that people around the world now have a new heightened health awareness. Hence, even after the last COVID-positive patient recovers, we will still be seeing households spending on masks and gloves at the very least.
Surely, no hospital will want to endanger the lives of their staff ever again and will remain vigilant, starting with storing a sufficient number of PPEs and medical equipment for either a resurgence of the COVID-19 or for new viruses to come. As a business owner in this industry, you can only expect the demand to stay constant before it lowers very gradually.
Business Continuity Gaps for Distributors
Thanks to nation-building efforts of big businesses, non-government organizations, and private groups, much of the first wave of PPE donations to hospitals were heavily funded. The government also pushed for industry support by implementing a Customs Administrative Order that exempts PPE and related medical supplies import from import duty as well, to help meet hospital demands.
Even so, our medical frontliners continue their daily heroic battle until the fight against the pandemic is over. They require a continuous supply of PPEs and medical equipment to treat patients successfully. These working capital gaps have begun to arise as the curve climbs to its peak and the days stretch onward:
1. Companies are faced with a good problem (relative to many disrupted businesses) — there’s a high demand from over 1,200 hospitals around the country for PPEs. This number would be from 246,000 to over 616,000 PPEs daily. However, these small businesses usually accept orders without down payment. As more orders come in without any form of payment, they will not be able to fund all orders right away due to their collections terms.
2. There is a need for additional funds for growth — there will be a need for more working capital to hire labor to produce more PPEs as brought upon by the high demand.
3. There may be a surge of unexpected expenses (especially once the Enhanced Community Quarantine is over) — this is usually caused by delayed payments.
Solution to Working Capital Gaps
Before a roadblock such as having poor working capital can prevent your business from taking on opportunities to generate sales and responding to hospitals' need for medical supplies, working capital loans would be the quickest solution to keep your business on track.
It’s a recommended stop-gap solution because it’s hassle-free, quick, and safe. There would be no need to leave your home to apply and receive the loan as long as you decide to partner with an online lending company. Working capital loans are usually short-term loans and don’t require collateral as well.
Over the month since the ECQ was implemented, First Circle — a Fintech company specialising in working capital loans to help keep small businesses running — has been prioritising the healthcare and medical supplies industries among other essential ones that fuel the nation during this time. Our Sales Team understands the nature of demand for PPEs and medical equipment at this time and are keen to play a part in flattening the curve by helping speed up financing to distributors by ensuring fast production and delivery.
We believe that if we can all act quickly as one, we can end this pandemic and economic crisis together.