Business is complicated. Business debt is even more complicated. No business wants to be in debt, and yet smart financing has built some of history’s most successful companies. Business debt is not “good” or “bad” as a concept. It’s better to think of business debt as a tool that successful companies use to grow and operate.
Currently, healthcare is a business in the United States. Like any other business, medical practices utilize financing in a variety of ways. Successful medical practices use financing to grow and operate. Financing a medical practice should not be simply borrowing money when you need it. Successful medical practices are able to make financing work for them.
Check out MedTrust Capital Group today and allow us to help you. The first step in medical practice financing is having a clear goal, allow us to help you achieve it.
Why Should I Take Out Medical Practice Finance Loans?
Medical practices should only get financing when it makes sense for business goals. Financing is readily available for most types of medical practices. But just because financing is available doesn’t mean your healthcare business should take out a loan.
Healthcare practices can finance inventory and working capital. These are two clear business goals that come up during a start-up, expansion, unexpected business event, or business pivot. Working capital financing can be used for almost any business expense imaginable.
Healthcare practices can finance commercial real estate purchases. This type of financing can be very lucrative and help the practice create long term revenue and wealth. Financing the purchase of the building or buildings a practice operates in can be one of the smartest business choices a medical practice makes.
Healthcare practices can finance the equipment they need. This can be a special loan just for the equipment, or it can be part of a bigger financing package during expansion, renovation, or start-up.
Healthcare practices that are starting-up, expanding, or renovating often need financing. High tech equipment, highly trained health professional employees, and space for a growing business are all reasons that a practice might need financing.
Why financing is the only option most of the time
Healthcare practices are expensive to run, and they are expensive to purchase. If you’re buying an existing practice, financing is really the only option most of the time. But even when it’s not, often financing is the smartest option.
Whether you are starting a new medical practice or expanding an existing one, the existing business debt can always be renegotiated and in fact, refinancing business debt is an excellent way to use financing to help a healthcare practice. Getting cash for improvements while lowering your monthly payments can be a great business decision.
Related: Expansion Financing
What type of loan options do physicians have for their medical practice?
Luckily for physicians, financing a medical practice is not difficult. Big banks are “hungry” for loans for doctors, which are considered very lucrative for the bank because of the high profits involved in the healthcare business and relatively low-risk. But an easy loan is not always the smartest option.
Medical practices can finance specific loans for medical equipment. They can also utilize lines of credit. These types of financing can work for some healthcare practices. Alternatively, medical practices can utilize term loans, which allow for very specific financial planning and forecasting since the loan payment is set on a schedule.
Practices can also utilize general medical practice loans and SBA loans. SBA loans are special loans from the government for small businesses only with strict rules about how the funds are used. These loans can be beneficial because of their flexible terms.
Related: Types of Loans offered
Questions to ask yourself before applying for loans
Before you begin researching whether you’ll apply for financing, consider these important questions about your healthcare business.
First– how much do you need? It’s better to overestimate than come up short. Next and possibly more importantly– what do you need financing for? Talk to an expert at your bank. Talk to your accountant. Collaborate with your professional network to see what other practices are doing. Do you need financing or do you need to cut expenses? Do you need new equipment or do you need new staff?
Next, what is your credit score? You can find this information online or at your bank. A good score makes lending terms more flexible, but a poor score is not a complete roadblock. Again, talk to the experts, including speaking with MedTrust Capital Group.
We are medical practice financing experts and understand how to navigate some of the trickier parts of financing a practice. Banks won’t often turn you down (but some will) but regardless, it’s important to make sure that your financing makes sense for your business.
What makes sense for your business goals is what you can comfortably pay back each month. If your revenue is already down and there is no plan beyond the working capital you need to make it to the end of the month, your practice needs more than working capital– even if you can afford the monthly payment.
Do you have other outstanding loans besides student loan debt? It might be time to refinance the whole business debt. While MedTrust Capital Group does not work to refinance your student financing, we can work to help refinance your existing business debt into a more manageable and sustainable payment which can ultimately help grow your business and personal wealth.
Reasons why Physicians take out loans
A physician gets financing for their practice for a variety of reasons. A physician who wants to succeed in business will always talk to their bank or a niche financing expert first before applying or even considering financing. It’s important they have a clear business goal in mind for their financing and a clear understanding of their financing options. Not all loans are created equal and not all loans paid back quickly at low-interest rates make the most business sense. Each individual case and business situation is different and each case should be handled as such. This is the benefit of working with a niche lender like MedTrust Capital Group.
If your medical practice or healthcare business needs financing, it’s important. Make sure you research lenders, options, and most importantly your own business needs.
Related: Buying a Practice
Talk to MedTrust Capital Group today. We will give you a no-hassle, free consultation on your business financing and help you ourselves as a niche lender, or direct you to your best next step.