Medical practice loans can help you buy new equipment, expand your business, consolidate debt, and get better interest rates. You can get your business going or revitalize it with the variety of features provided by the different loans on the market. We’ve compiled a list of the five best medical practice loans to help you understand what’s available. If you’re getting ready to start a medical practice, acquiring an existing practice, or refinancing your existing practice debt, you should read this before speaking with a loan officer.
1. Medical Equipment Loans
One of the best types of medical practice loans is an equipment loan. Equipment is one of the biggest expenses a practice can have, so a loan to purchase new or used equipment can help you upgrade your practice. Whether you need basic equipment like exam tables or retinal scanners for an optometry practice, these loans cover it all. Since medical equipment is valuable, it’s easy to get a loan for it. In a way, it provides its own collateral.
2. Stated Income Loans for Medical Practices
If you’ve worked as an independent consultant or owned a business in the past, you may be familiar with a stated income loan. We’ll use bank statements and profit and loss statements to underwrite these loans – not your tax returns. In fact, we’ll never ask to see your tax returns. These loans are based on your practice’s income and aren’t affected by tax write-offs.
A stated income loan can help a practice purchase a facility they are currently leasing, expand into a larger facility, or open a new facility. Sometimes your business tax returns do not reflect the true cash-flow of a practice therefore this is an option you have vs. a bank who will definitely underwrite off of your tax returns.
We helped a dentist who was drowning in debt refinance her equipment loans, higher interest/short amortization loans, and cash flow loan to save her almost $2,500 a month! Her stated income loan brought new life to her practice.
3. Small Business Administration (SBA) Loans
The Small Business Administration (SBA) has a wealth of resources and programs to help medical practices. When you work with a preferred lender, your loans get processed quickly and efficiently, which means getting your funds faster.
SBA loans can be used for a variety of purposes. You can use one to buy, build, renovate, or refinance a commercial property, purchase or start a practice, buy equipment, etc. With a term of up to 10-25 years and Other perks such as 90% financing and no prepayment penalty, this might be the best possibility for your scenario.
One successful borrower we worked with bought a chiropractic practice with an SBA loan we wrote. He was able to secure the business even though he had some personal debts, which is the beauty of medical practice loans.
4. Medical Practice Term Loans
Medical practice term loans are incredibly diverse. They offer both short and long terms, depending on your needs. You might have a payoff period as short as 12 months or as long as five or more years. If you have an excellent credit score, you can reap the benefits of extremely low rates we see right now. They give you a calculated payment schedule, allowing you to plan your finances. Term loans give you a lump sum capital upfront that you can use for whatever needs you have at your practice. They also give you the benefit of a fixed, not variable rate. The one downside you might find is loan amounts can be a bit smaller here than with some of the other loan types discussed.
5. Business Lines of Credit for Medical Practices
Business lines of credit come in two flavors, secured and unsecured. We favor unsecured lines because they give you the flexibility you need to run your practice in the most profitable way possible. Since this is a revolving line of credit, you can draw against it only when necessary. You only pay interest on the balance you’ve accumulated, but you may have a higher interest rate than on a loan.
What is a line of credit good for? It can be used in many different ways, such as buying new equipment or purchasing a property at a low price. Since they don’t require closing, they’re fantastic for transactions with a quick turnaround time. They have no hidden fees and don’t come with the obligation of tying up personal assets, giving you ease of mind.
6. Start-Up Medical Practice Loans
A start-up loan is exactly what it sounds like! These loans help you get started with your practice, whether it be dental, veterinary, medical, etc. You can use them to acquire office space, purchase equipment, recruit and train staff, etc. They’ll help you get your business going without dipping into your personal bank account. The downside is they can be pretty difficult to obtain, especially if you are just out of school.
Our medical practice loan program allows you to grow your business and achieve your dreams. Don’t shell out your hard-earned cash before taking a moment to consider all of the options you have.