As a physician or a specialist looking for the best loan offer to start or expand your practice, it’s easy to become overwhelmed due to the high number of choices available. As if the long hours you put into your work isn’t enough, finding the best medical practice loans Long Island can take up more time than you afford.
However, three qualities position you as an excellent candidate for a loan. A stable income, high net-worth, and of course, the potential to make considerable earnings. This is even better for doctors who already run their own practice and are looking to expand their horizons. Since they already have an attractive financial status, this makes them an ideal applicant for a medical practice loan.
Whether you’re already and established private practice or still planning on opening one, it’s always important to have a considerable amount of money prepared. With that said, here are some of the easiest ways to fund your private practice:
1. Out of Pocket
Business owners often need to use their own resources to fund their projects until a more favorable financial opportunity presents itself. This can be done by either using their savings account, credit cards, or by taking advantage of their personal assets – whichever is the more convenient. Self-funding also positions you as a desirable applicant to potential investors since it can show lenders that you personally are willing to assume the risk.
However, financing your private practice out of your pocket can be extremely expensive. Unless you have a trust fund or millions of savings in the bank, you won’t be able to afford the expenses that running a private practice entails.
2. Friends and Family
Asking your family to invest in your practice can be an effective way to fund your medical business. There’s a higher chance that they’ll lend you the needed funds seeing they are the ones who believe in your vision. However, this type of loan can be detrimental to your family relationships if not managed in the same manner as funding from a financial institution.
Under the circumstances, it’s always best to create a formal payment agreement. For instance, you can structure the loan using a higher rate of interest in the first year. Family and friends can be an excellent source of funds that provide you with the opportunity to launch your business and get it operational.
Once you get the hang of it, move on building your website and formulating money-generating plans. The most important thing for both parties is to seek legal advice so you can avoid any problems that might arise in the future.
3. SBA Loans
The Small Business Administration offers financing programs for every medical professional even without a lengthy credit history or hefty cash flow a traditional bank normally requires. The SBA doesn’t really provide medical loans per SE, instead, they act as a loan guarantee, ready to cover the lender’s losses should the borrower stop paying on the loan. The documentation that is needed to obtain an SBA loan are as follows:
- Personal Guarantee
- The Business’ Tax Returns
- Financial Statements of the Business
- Personal Financial Statement
- A/R & A/P aging schedules
- The Business Owner’s Tax Returns
- List of Collateral
- Schedule of Liabilities
4. Line of Credit
Line of credit is one of the most traditional financing options that many private practitioners use to fund their business. With an open line, they can withdraw any amount they need anytime they need it, as long as they don’t exceed the limit. They can, however, restore their credit limit once they’ve paid back the money they borrowed. Then, they can withdraw the funds once more, if another need arises.
Lines of credit are usually offered by banks and alternative lending institutions. Since a lot of businesses are using this financing plan, it won’t be hard to find a company that offers great loan terms.
Medical Practice Loans Long Island for You
The costs of running a private medical practice can be steep. You have to consider several expenses including, but not limited to:
- Start-up costs
- Staff payroll
- Medical insurance
- Medical equipment
- Business expansion
- Day-to-day expenses
While spending your personal savings on your business is a good way to go, it’s also unnecessary considering that a lot of bank and lenders are offering different types of business loans. If you’re planning on opening your own private medical practice, the best medical practice loans Long Island is the funding solution for you. With the extra injection of cash, you won’t have to worry about expensive medical equipment or insurances.
However, it’s also important to consult with an accountant or financial expert first. Once you present them with the things that your business needs, they can then find the best solution for you.