Running a medical practice requires the injection of substantial capital to cover a wide variety of expenses, including staff payroll, training, the purchase of medical equipment and more. Doctors can take advantage of alternative financing options to meet cash flow requirements. This eliminates the need to worry about ongoing expenses. As a result, doctors can focus on taking good care of patients.
Gaining access to adequate capital reduces stresses associated with fluctuations in utilities, payroll concerns, slow patient inflows and increased insurance costs. Failure to focus on key components of the practice, such as marketing and improving patient outcomes can result in lower inbound traffic at the office. The same applies to failure to upgrade medical equipment. Patient traffic is typically high in offices with the latest equipment and well-trained staff.
On the other hand, doctors can ill-afford to miss insurance payments. Doing so can expose the practice to unacceptable levels of liability and compliance risks. Taking out small business loans reduces the burden associated with these requirements. However, physicians need to consider their borrowing needs carefully and plan accordingly. Many lenders view the medical practice as a low-risk sector, thus boosting chances of loan approval.
Doctors need easy access to funds when faced with a cash flow problem or equipment breakdowns. Alternative financing options like merchant cash advances help reduce the waiting time thanks to streamlined application and loan approval processes. Physicians with a stable revenue find it easier to qualify for the loans.
Although some of the traditional loans available on the market enable physicians to take advantage of low-interest rates, they typically come with a lengthy application process. These options are often associated with terms and conditions that make it difficult to get approval. This is opposed to alternative loans that require less paperwork and have less stringent qualification criteria.
The SBA loan application process can take up to three months whereas merchant cash advances are generally approved within 24 hours. Shorter approval times allow doctors to inject the funds into the practice without delay, thus resolving any cash flow challenges.
Doctors enjoy access to a wide variety of financing options when looking to grow their practice or improve the quality of service to patients. Lenders consider the medical field safe for both short- and long-term loans. This allows physicians to choose the right loan for their practice. Some of the viable alternative loans include equipment finance, the line of credit and term loans.
These options provide easy access to much-needed funds. They often come with shorter repayment terms and higher interest rates. Physicians can leverage the loans to cover short-term financing requirements, such as funding marketing campaigns, equipment upgrades or purchasing medical supplies.
Alternative loans like the merchant cash advance are ideal for doctors with a bad credit record or a significant amount of current debt. Unlike SBA loans, merchant cash advances come with less stringent loan application criteria.
Merchant Cash Advance
Merchant cash advances are designed to help business people sell a portion of their daily credit card sales to a lender. This option provides a flexible solution for doctors with a steady stream of credit card sales. It can benefit physicians in various specialties, including dentists, chiropractors, physical therapists, optometrists and general practitioners. The funds can be used to invest in new medical equipment or expand the practice.
Cash advances are well suited to anyone looking for second, third or fourth position loans. The approval rates are significantly higher compared to traditional loans and lenders simplify the application process. Practitioners can expect shorter waiting times, which is a bonus when looking for emergency funds. Some lenders place no limits on the number of money borrowers can secure via the cash advance facility.
Medical Equipment Loans
These loans make it easier to grow your private practice. They are ideal for doctors aiming to purchase additional medical equipment to boost operations. Both new and established practices require state-of-the-art equipment to attract a steady flow of patient traffic. Without quality equipment, it can be difficult to compete with local practices.
Established practices need to upgrade the equipment regularly to provide better care. Physicians can benefit from tax deductions when acquiring qualifying equipment. This applies to all listed units, even if financed.
A number of reputable lenders give you the opportunity to upgrade your medical equipment without the need to commit significant amounts of upfront capital. The loans are available at terms designed to suit your specific financial needs. This allows you to maximize your practice’s growth prospects.
Line of Credit for Doctors
A line of credit is designed to help borrowers cover short-term funding needs. It can improve physicians’ ability to manage cash flow through the provision of revolving credit. Lenders allow borrowers to repay the debt on an ongoing basis and no monthly payments are set. When it comes to interest rates, they are capitalized like other types of credit. Lines of credit are easy to renew once the outstanding amount has been cleared.
Borrowers can use the facility continuously without exceeding the credit limit. Some key advantages of this type of financing include flexible payment terms, access to funds on demand and the capacity to build business credit. While traditional loans come with set monthly payment schedules, physicians opting for the line of credit do not face growth challenges. When the practice is bogged down by slow patient traffic, the doctor is only required to pay the minimum amount due.
Additionally, this form of credit separates the personal and business finances. When you use the facility properly, it becomes easier to boost your practice’s credit score. This ensures that you can gain access to a wider range of credit options. A business revolving line of credit is popular partly due to its flexibility. You have the freedom to spend the funds on any aspect of your medical practice.
This enables you to consider investing in medical supplies, marketing campaigns or staff training. With access to loan options, such as merchant cash advance, equipment finance, and lines of credit, you will find it easier to compete favorably with local practices. You can focus on running the business without worrying about cash flow problems.