Taking care of patients is the number one priority of every medical practice. It’s every doctor’s responsibility to provide optimum care by making sure that their medical practice offers nothing but the best. But providing the best care comes at a price. Luckily, medical practice financing is readily available for doctors and specialists in need of funding.
Medical practice owners have many options when it comes to applying for a medical practice loan. The best type of loan for you will depend on your practice’s needs. Some of the factors you need to consider before applying for a medical business loan include the following:
- How quickly you need the funds.
- How fast you can repay the loan.
- The flexibility of the repayment terms.
- Your capacity to provide collateral to secure the loan.
With that said, here are five different medical practice loans you should check out if you own a medical practice.
1. Equipment Financing
When people think of business equipment, they immediately think of heavy construction equipment or industrial equipment. While equipment financing definitely covers both of those, it also covers medical equipment. An MRI machine, x-ray machine, examination tables, computers, and even medical transportation vehicles can be financed with equipment financing.
Equipment financing can provide you with the working capital you need to purchase necessary equipment for your medical practice. Many practices apply for an equipment financing to fuel business growth, especially since it doesn’t need any collateral. The equipment you’re looking to purchase serves as collateral to secure the loan. If you default on the loan, lenders have the right to repossess the said equipment.
2. Short-Term Loans
Short-term loans are a great option for healthcare providers who need quick access to working capital. This type of loan is often more expensive given the shorter repayment terms and higher interest rates. However, the total cost of the loan might be worth the expense if your income can support paying off the loan within the specified period.
If you need cash ASAP, generate a sizable amount of revenue, and you want to avoid carrying additional debt over time, a short-term business loan can be beneficial for your practice.
3. Business Line of Credit
If you’ve ever used a business credit card or a regular credit card, then you now have an idea of how a business line of credit works. Lenders will assign you to a predetermined credit limit and you can withdraw from it whenever you want to. Unlike your average business loan, you don’t have to repay the entire credit limit. Instead, you only have to repay the amount of money you’ve withdrawn along with the interest. Once you’ve established a line of credit, you’ll be able to access funds quickly. Even if you don’t withdraw from your credit limit for months, it’s still there when you need it.
Because of its flexibility and affordability, you can see why a business line of credit is a popular loan option among business owners. It’s especially beneficial for medical practices that have fluctuating expenses and those that need an emergency fund.
4. Merchant Cash Advance
A merchant cash advance (MCA) is not structured like a typical business loan. It’s a cash advance against your future debit card transactions. This type of financing solution is best for medical practice owners who need funds ASAP but cannot qualify for other financing programs. If you have a poor credit rating or if you’re new in business, a merchant cash advance is a great option.
It’s also one of the easiest financing solutions to qualify for. In fact, 90% of the applicants are given a cash advance on the same day they apply. However, the convenience of an MCA comes at a cost. A merchant cash advance is one of the most expensive financing solutions in the market, so make sure to think it through before getting one.
5. SBA Loans
SBA loans are funding solutions created by the Small Business Administration to help small business owners, including medical practice owners, access bank-rate loans. SBA loans are even better than bank loans because they offer longer repayment terms, lower interest rates, and higher loan limits.
It’s important to note that the Small Business Administration is not the one that’s lending you the money. There are SBA-approved lenders that agree to loan money to small businesses with the guarantee that the Small Business Administration will cover up to 85% of the loan. SBA loans are definitely one of the best funding solutions there is, but qualifying for one can be a hassle. It requires a great deal of paperwork and it will take months before you can receive funding.
Enjoy the Benefits of Medical Practice Financing Today!
Your patients deserve the best care, so make sure you have the working capital needed to cater to their needs. Medical practice financing can help you secure the funds you need to take your practice to the next level.