Finance is the life-line of virtually all medical practice. If you’re contracted to provide medical services to a large pool of clients, there is a need to utilize the contractor funding model. However, most contracted medical practitioners find it challenging to get an ideal contractor funding model. According to Health Finance, 50% of medical practitioners have considered purchasing, selling, or merging their practice. Additionally, 41% of the surveyed practitioners chose to go for credit lines to stay afloat and held that they are willing to do this because it’s too expensive to run a practice nowadays. And medical practitioners are not alone because statistics show that for 33% of small businesses consider funding the leading impediment to business growth.
Luckily, as a medical practitioner, you have three characteristics that make you a perfect loan candidate that can easily access any contractor funding model. The strong earning potential in the medical industry, stable income, and the high net worth of most practitioners are your strongest points. The available medical practice loans may be a little confusing to choose from because not all of them are a perfect fit for you. Here is a rundown of the top medical practice start-up loans, which can help you expand or initiate your practice.
SBA 7(a) Loans
SBA 7(a) loans are a credit facility provided through intermediary lenders. The SBA 7(a) is the most popular product under the SBA loans spectrum. These small business loans are guaranteed by the U.S Small Business Administration and are highly sought after because of their long repayment periods and low-interest rates.
Notably, these loans are very competitive, and you have to show that you have steady finances and a strong borrowing background to get approval. The application process requires a lot of paperwork, and the loan timeline may take weeks or months. As such, SBA 7(a) is not an ideal option if you’re seeking fast access to finances.
Traditional Banks as a Medical Practice Loan Source
You may want to go straight to the most known lending entity: a traditional lending bank. If you are a qualified candidate and an account holder, this can be a great option especially if your credit score is positive. In fact, some banks often offer bespoke credit facilities meant for medical practice financing. But you should have an excellent financial history and creditworthiness. Unfortunately, approval for such loans is not guaranteed, and it may sometimes take long to acquire funding.
Term loans are medical practice loans provided by medical practice financing specialists. The lenders are entities or individuals that specialize in medical practice financing. These lenders can give you a lump sum, which you have to repay over a period of time with some interest for a stipulated term.
These type of loans are preferable because the required qualifications are less stringent when compared to traditional lenders like banks. The application and approval process is faster when compared to banks, but the credit facility is often more expensive than bank medical practice loans.
Medical Equipment Loans
If you require finances solely to purchase medical equipment or upgrade your old equipment and gear, then equipment financing is perfect for you. These are credit facilities that are strictly limited to the buying of specific items. As such, you have to provide a quote to the lender before you can acquire financing.
The equipment loans are ideal for the purchase of large medical equipment such as MRI or X-ray machines. The plan is also favorable to you because the equipment serves as collateral for the loan. This plan lowers the risk for the lenders, thus implying that you may not need to provide personal property for collateral or a down payment.
It is prudent for you to always go for a medical contractor funding model or medical practice loans start-up that is tailored specifically for medical practitioners. This is important because such bespoke products can take care of your needs as a medical practitioner. Like in all otherwise borrowing decisions always go for loans with the longest repayment period and the lowest interest rates.