Whether you’re just starting out or you’ve been in business for a while, I know you’ve run into needing additional medical practice financing for various parts of your practice from time to time. No medical practice gets away with staying in operation without having to get some kind of financial help at some point. If you’re a startup practice, it’s even more important to get the right kind of financing for your healthcare business.
Thankfully, because you’re in the healthcare industry, it’s relatively easy to get healthcare practice financing compared to other industries. The following offices and practices typically have an easier time getting healthcare loans:
- Doctor’s Offices
- Physical Therapy Centers
- Dental Practices
- And many more
How Can I Use Healthcare Practice Financing?
Loans for healthcare professionals can be used in a myriad of different ways. It’s largely up to you, although some financing situations may restrict you in certain ways. Make sure to verify with the financier how you can use your funds and if there are any unique restrictions that need to be known ahead of time.
For example, healthcare equipment financing may restrict you to only using the funds on upgrading, purchasing or leasing healthcare equipment.
Healthcare practice loans can be used for different business purposes from purchasing/leasing medical equipment, covering startup costs of opening an office/practice, making upgrades to your office and medical equipment, and many more.
How Do I Qualify for Healthcare Practice Financing?
Qualifying for medical practice financing is relatively easy. You’ll need to know your credit score, how long you’ve been in business, how much financing you need, and how long you want your repayment period to be. This information will be used by banks and financiers to determine the level of risk associated with your business. Thankfully, the healthcare industry is seen as a relatively “safe investment” for most lenders.
Getting a loan through a bank is often your best route to go, or working with equipment dealers when financing exclusively for healthcare equipment. The downside is that working with banks can sometimes take a long time to get an approval or denial, and also requires you to have near-perfect business credentials. Banks typically require 10-20% down and will put a blanket lien on your entire practice. Which you will cause problems when you go to get more financing for your business because your bank will have to subordinate the new debt. Meaning the bank acknowledges they have no interest in your new business debt. This process will cause delays up to 1 month. Causing a long delay in getting the essential equipment your business needs.
What To Do If My Medical Practice Is a Startup or Has a Low Credit Score?
If you can’t work with a bank because of their high credential requirements or you just don’t have the time to wait around for an approval and filling out paperwork, there are other options available to you.
First identify what you need the funds for. With different financing options available out there, narrowing down the intent of your financing goals can help you to secure a better chance of getting a loan or medical equipment lease. In some cases it can be beneficial to break apart your financing goals into multiple, smaller objectives to target different financiers - especially for start up healthcare practice.
You can get medical practice loans for many different business purposes through medical practice financing companies, who will evaluate your business risk and provide you with a financing plan that fits your budget. Generally, the younger your medical practice is or the lower your credit score, the higher the monthly payments get. But in most cases, this is still better than not getting any funding at all, since it will help you to generate profit in the long run.
Ready to Apply for a Healthcare Practice Loan? Click the link below!