There are numerous loan options for doctors and other medical professionals looking to finance their own medical practices, such as a medical practice line of credit and SBA loans. Selecting the right funding for you and your business depends on the following factors:
- How quickly you need the funds.
- The type of collateral you can provide.
- How fast you can repay a loan.
- The flexibility of the repayment terms.
A good lender will find a loan program that best fits your business’ goals and needs. While there are many options you can apply for, here are three of the most common loans obtained for medical practices:
1. Medical Practice Line of Credit
A medical practice line of credit, also known as a business line of credit, works like a business credit card. Once approved, you can withdraw money from your predetermined credit limit, and you only have to pay for the funds you’ve withdrawn plus the interest.
This is a viable option if you need funds quickly as you will have access to them as soon as they’re deposited into your business account. A business line of credit also offers flexibility as it can be utilized on a ‘as-needed’ basis. You will still have access to it even if you don’t tap into it for extended periods of time.
2. SBA 7(a) Loans
Among the various SBA loans available, the SBA 7(a) loan is the most popular option for small business owners. You can apply for SBA loans through SBA-approved intermediary lenders, upon which the Small Business Administration guarantees up to 85% of your loan.
Small business owners tend to prefer 7(a) loans because they offer low interest rates and long repayment terms. They do require proof of a high-credit score and stable finances which is why doctors and medical professionals, in particular, are strong candidates when applying for them.
3. Equipment Financing
Equipment financing provides funds that can only be used to purchase equipment. So, if the reason you desire to apply for a business loan is to purchase or update equipment, it’s a strong option for you.
It’s best to use equipment financing for large and expensive items so you can then use them as collateral for the loan. The most common types of equipment being financed are MRI machines, laboratory diagnostic equipment, refrigerator/freezers, and specialized machinery. By using the equipment as collateral, you don’t have to declare any of your personal assets or property. Furthermore, if the equipment you’re going to purchase is of high-value, it can help keep the costs of the loan down.
If you need more details regarding a medical practice line of credit or other types of finance programs, the experts at SMB Compass can help you with any questions or concerns you may have.
**We have funded over a thousand businesses all over the United States, including medical practices and we are experts at guiding medical professionals in the areas of finance. Simply call us today via phone call at (646) 569-9496 or email us at [email protected]. Our specialists will be happy to answer your questions.