Starting a physical therapist practice is a bold move that requires careful planning and significant financial resources. To provide the best service to patients, you need to acquire quality equipment and hire competent staff. Practices with a wide variety of state-of-the-art equipment find it easier to attract new patients and a steady stream of referrals.

Some equipment required to run a physical therapy business include electrotherapy machines and treadmills. These machines represent a significant cost, which should be funded via the startup capital.

The physical therapy industry is worth billions of dollars and it is expected to continue thriving. This creates opportunities for investment in a sector filled with many small local practices. The demand for qualified and experienced professionals drives trends in the sector.

You can compete effectively by investing significant capital in the business. Applying for additional working capital is a viable option if you need to take advantage of the market opportunities.

Adequate funding for the practice allows you to provide optimal space for equipment, patients, staff, supplies and furniture. Offices with cramped spaces undermine comfort levels for the patients, which affects customer service standards. Access to affordable financing options makes it easier to hire well-trained employees for the practice.

Types of physical therapy practice loans

Lenders provide a wide variety of financing options suitable for a physical therapy practice. These include merchant cash advance, equipment finance, bank loans, SBA loans and business line of credit.

Merchant cash advance

Merchant cash advances provide a number of key benefits, including credit protection, easy access to funds and a streamlined loan application process. This financing solution is suitable for business owners looking for funding that does not take into account credit scores. Lenders provide capital in exchange for a percentage of future credit card sales.

Many business owners turn to merchant cash advances because the application process is a breeze. The process involves filling out an online application form and submitting relevant documentation, such as credit card processing statements and business registration documents. Oftentimes, the lenders approve the applications within two working days, thus enabling borrowers to inject funds into business operations.

The streamlined process eliminates the need to waste time with lengthy and cumbersome loan applications. Once the loan is approved, you can use the funds for a wide variety of purposes, such as renovations, staff training and purchasing new therapy equipment. The funds will boost your cash flow if you plan carefully. You can consider using a portion of the loan to launch advertising campaigns with the aim to reach a wider pool of potential customers.

The best part is that the debt will not affect your business’ credit record since a merchant cash advance is technically not a loan. This financing option is regarded as simply exchanging future credit card sales for capital injection into the business. The repayments start immediately after the application is approved and funds deposited into your bank account.

Bank loans

Although bank loans are relatively difficult to secure, they can still provide a practical option if your practice has a good credit record and monthly revenue. They can be used for a variety of purposes. Bank loans are available at varying interest rates and terms. You should aim to keep the costs of servicing the debt as low as possible. Banks typically offer finance as term loans and lines of credit, which can be secured or unsecured. This option provides a viable way to fund equipment purchases and boost working capital.

Line of credit

Business lines of credit are somewhat similar to credit cards in that the lender allows borrowers to gain access to funds on an ongoing basis. Interest is only payable on the funds that are withdrawn from the facility. The loan must be repaid before any additional funds can be borrowed. The credit lines are usually easy to renew and many entrepreneurs work with the same lender for several years.

Borrowers can access funds up to the card or daily limit, which boosts convenience and flexibility. This level of flexibility makes it easier to manage the finances of a physical therapy practice optimally. The revolving loan option offers a number of advantages in comparison to bank term loans.

Lenders charge one-off fees for a business line of credit, such as establishment and application fees. In some cases, the borrowers are required to pay additional fees like transaction, ATM and annual fees. Credit lines can be secured or unsecured depending on the terms and conditions attached to the facility.

As a physical therapy business owner, you should make an effort to check the associated charges to avoid any surprises. Only borrow the amount of money you can afford to repay with ease. Doing so helps you leverage the line of credit and boost your business’ growth prospects.

Term loan

This option allows you to gain access to lump sums that are repayable over a fixed period. Most of the loans are secured, which means that you need to have suitable collateral, such as real estate, equipment or a lien. Term loans share some similarities with merchant cash advances in that the repayments commence immediately. They are ideal for large purchases. You should consider taking out this type of financing when planning to acquire equipment, vehicles or real estate for your physical therapy practice.

SBA loans

The Small Business Administration (SBA) provides institutional guarantees that allow entrepreneurs to borrow small business loans via approved lenders. The loans are affordable thanks to the relatively low interest rates. On the other hand, the payment terms can extend to periods of up to 25 years. Borrowers can choose the ideal SBA loan from a wide variety of options, including the SBA 7(a) loans.

The SBA 7(a) loans allow you to borrow large amounts of money for your physical therapy practice. You can use the funds to purchase therapy equipment, boost working capital or renovate your offices. With interest rates ranging between 7.25 and 9.75 percent, this financing option is perfect for small business owners looking for affordable credit.