Medical financing provides capital to doctors, dentists, veterinarians, physical therapists, OB/GYNs, chiropractors, and many other healthcare professionals. It covers business needs for small, private practices, and large hospitals. It can help you purchase everything from equipment to real estate. Those are a lot of variables! How can you pick the right financing for your practice?
Medical loans give you a large amount of capital to make a purchase. Generally speaking, these are long-term loans for buying equipment, purchasing real estate or improving your practice. Some loans offer short-term financing that can help you adapt to emergencies, such as bridge financing or working capital loans.
You can also get a loan for practice acquisition, refinancing, or debt consolidation. These are common needs that many medical professionals have. Practice acquisition loans can make it easier to start your practice because you can buy out another company’s patient lists, equipment, and assets. Debt consolidation can combine several debts into one, such as medical school debts with real estate loans. Refinancing is a great option when current interest rates are at an all-time low, letting you save a lot of money.
If you have a lot of patients, you may benefit from using factoring. This lets you turn unpaid bills into immediate capital. The interest rates are higher with this option, but the advantage is that you have working capital for any need, including advertising, website development, hiring costs, payroll, taxes, and anything else you want. This is a great option for fast funding without the traditional credit score requirements.
Medical Lines of Credit
When you have a lot of smaller needs every month, you may want to apply for a line of credit. This works like a credit card, but with a larger cap and better rates. Lines of credit are flexible. They’re harder to get than bridge loans, but they offer better terms.
Equipment is very important for medical practices. You may need diagnostic equipment, specialized tools, special patient furniture, software, treatment systems, disinfection systems, and other equipment. Some of these things are better to purchase using a loan, but you may not always have the capital for it. Leasing is an excellent alternative that provides lower monthly payments and a lower down payment (sometimes 0% down). This is easier on your operating budget.
The right medical financing depends on your credit score and current cash flow. Choose the option that helps you reach your goals without eating up your working capital.