Medical Practice Loans Explained
In this section, we’ll guide you on how to choose the right funding for your situation.
Small Business Administration (SBA) is the optimal solution for when you need working capital to build offices or install new equipment. One of the most appealing features is that you can pay the loan off gradually over a long period, with low rates. This primarily because the government backs the financing through approved lenders.
Whether you want to buy a new property or lease one, you’ll want to fit it out with medical rooms, offices, and facilities. You might also wish to install quality fittings for improved comfort and so that sickness is not passed from one patient to another. For example, you may want quality central air conditioning. An SBA loan is an excellent way to get this sort of funding with acceptable terms.
Fundera works with new companies to finance startup ventures through SBA loans. You don’t need a track record or previous financial records to be approved, as long as you have an excellent business plan.
Short- to medium-term loans provide a good alternative to SBA loans. These are the standard loans that small businesses use as startup investments to cover their initial capital and operating expenses. The loan you choose will vary according to how long you want to be committed to the contract and the funding amount you require.
You can use the term loan in the same way as the SBA loan, but you’ll receive fewer funds with a higher interest rate and less time to pay it. However, a term loan may be your best way to receive working capital. A term loan may, for example, let you expand your business or build more offices if you’ve been in operation for a few years.
BlueVine has received praise for its short-term loans and how quickly it approves funding. You can apply online for its services, or you can meet the agents at their offices or over the phone. BlueVine has flexible options and will guide you through the loan application process.
Equipment financing provides the funds for the purchase of machinery and tools. With equipment financing, the lender will evaluate how much you need for all of your listed equipment and will provide you with funding for up to 100% of the value of the equipment.
All medical practices require specialized equipment. While SBA and term loans can also help you acquire these items, an equipment financing loan may offer the perfect solution - if the equipment is all you need.
SmartBiz works with SBA and construction loans and can use both these loan types when helping your medical practice with equipment financing. Its rates for this funding option are competitive. SmartBiz will also let you know if they believe you should apply for a different funding solution.
A business line of credit isn’t a lump sum, but rather an amount you can draw when you need it. Furthermore, you only owe the lender the amount you use rather than the entire credit amount.
If there’s one cost that can cripple medical practices, it’s the random emergencies or repairs that demand the input of extra cash. A business line of credit is available as and when you need it, so you don’t have to wait for approval. However, you will need to make sure your payments are up-to-date.
OnDeck is one of the best providers of a business line of credit, having dished out millions in loans over the last few years.
Invoice factoring is helpful when you have clients that owe you payments. You’ll receive an amount equal to the total invoice value. The lender effectively buys the invoices from you while adding a factor fee. It reclaims the payment once your clients repay their debts.
Despite most people having medical aid, there are occasions where you’ll need to issue an invoice. If your patients are struggling to pay due to personal issues, you don’t want to be held hostage to unpaid bills. Invoice factoring can save the day so you can continue with your business operations as usual.
Lendio is a loan marketplace. They offer loan amounts of up to 90% of receivables and a factor rate that can reach as low as 2%. To get a better chance of being eligible for funding you should have 6 months of financial history; $50,000 per month in revenue, and a 550 or higher credit score.
Merchant cash advances from Fora Financial allow medical practices to access anything between $5,000 and $500,000 in approximately 72 hours. Applications for this form of financial assistance are approved in just 24 hours.
Fora Financial doesn’t restrict how businesses use their merchant funding after the approval. Whether they wish to buy the latest medical equipment or gear, do renovations or construction work, or pay salaries, what lenders do with their money is up to them.
With a one-time factor rate, paying off the loan is convenient and easier than other loan types. And if a company manages to pay off their debt sooner, they are rewarded with a discount. Also, no collateral is necessary to qualify for a merchant cash advance from Fora. They will simply examine the business’s credit and debit card sales.