Keeping a business afloat isn't always easy during these uncertain times, even for healthcare professionals. Costs can quickly add up, and with many individuals losing insurance since the emergence of the Covid-19 pandemic, economic hardships have been extended to medical practices just the same.
There are many reasons to seek business loans as a healthcare professional. Medical office financing offers to fund both new and existing medical service businesses. With the help of medical practice loans, you can build your business and improve your credit as a business owner.
Let’s discuss some common ways you can leverage business loans for healthcare professionals in order to help promote growth and stability.
Business loans for doctors and other healthcare professionals can be put towards marketing your services and ultimately drive additional revenue. Hiring professionals to get the word out about your practice can significantly diversify and grow your patient rate, reaching potential patients you otherwise would not have been able to before.
Moreover, effective marketing services can also aid in patient retention as you consistently provide them with updates on your services. While many businesses opt to take on marketing themselves, having the funds to hire professionals will only give you more free time to focus on the more important aspects of running a practice.
2. Hire Qualified Staff
Once you’ve been able to diversify and grow your patient base, business financing can then allow you to hire more staff. Hiring qualified practitioners will help you better manage the increase in the volume of patients and balance the workload among the practice. You may also be able to hire a more qualified administrative team to help streamline operations.
By hiring more staff, you can also enhance the quality of service the practice provides, especially with the ability to pay more qualified professionals.
3. Upgrade Systems
Healthcare business loans will also give you the opportunity to upgrade your current systems in order to improve efficiency and patient interactions. You may be able to offer better treatments and get rid of outdated equipment or upgrade your CRM systems.
By locating additional funds, the practice has more capabilities to enhance the patient experience, such as by investing in better patient portals for communication, improved billing and point-of-sale systems, and other aspects of vendor management.
Why Doctors Are Choosing Alternative Financing
There are alternative ways to secure medical office financing that can often be simpler than traditional loans from credit unions or banks. Alternative financing could even extend qualifications to health professionals with a poor credit history due to medical school debt. Some healthcare business loans can finance up to $100,000.
Alternative financing may also offer higher and faster approval rates, allowing you to get the ball rolling on growing your practice without waiting around. Fees and repayment schedules might be simpler and more transparent as well.
SBA Financing Options For Healthcare Professionals
SBA (Small Business Administration) loans are government loans offered to small businesses that meet specific criteria. SBA loans for health care providers aim to provide funding for new and existing medical practices.
There are various SBA low-cost loan programs that have low rates, long terms, and low payments to foster stability, growth, and savings for any medical practice. Here is a brief overview of each SBA loan for healthcare providers.
The 7(a) Loan Program
An SBA 7(a) loan is the best loan if a medical practice needs funds for working capital, debt consolidation, equipment upgrades, or commercial real estate. With the loan, you can refinance cash advances, short-term business loans, high-interest business loans, or business credit cards. You may also refinance any mortgages on existing commercial real estate or upgrade to a new space in a location with more traffic.
An SBA 7(a) loan could get you up to $350,000, with a negotiable interest rate.
The 504 Loan Program
The 504 loan aims to give small medical practices low-cost funds for expansion or modernization. This loan is beneficial for medical practitioners looking to purchase commercial real estate property.
The SBA will typically fund up to 50% of the project costs through a lender. Community Development Corporations (CDCs) will fund up to 40%. The remaining 10% should be paid as a contractual down payment by the practice owner.
The Microloan Program
The Microloan Program will provide start-up medical practices with a loan of up to $50,000. This loan is best used to stay on top of general business and operational expenses rather than pay off any debt or acquire any real estate. This SBA loan can be very helpful if you have a relatively small practice with only a couple of practitioners.
How To Apply For Financing For Medical Practice
Qualifying for an SBA medical practice loan is not always an easy avenue to take for any industry professional, for that matter. In order to qualify for an SBA loan, your practice should be active for at least a year, and the owner will need to participate in personal credit screenings.
If your credit is strong enough according to SBA standards, applying for financing will entail the following:
- Gather your financial records, tax information, business licenses and permits, all of the practitioners' licenses or certification, and any other relevant paperwork.
- Determine how much of a loan you require and for the purposes of its investment.
- Submit your application.
From here, it can take up to three months to receive a response from the SBA. Let ROK Financial take care of this process for you using our expedited application process.
In addition to SBA Loans, ROK Financial offers a wide variety of small business loans for medical professionals to help their practices.
Business loans for healthcare professionals are available but not always easy to secure. If your financial projections show that difficulty keeping your practice afloat is imminent, you might want to look into your options right away. Often, the waiting time to hear back about an approved loan is when businesses are forced to close as they can't keep themselves in operation for that long.
Still, there are many different options available outside of traditional loans that cater to businesses even with less than ideal credit history.
About the Author, Madison Taylor
Madison Taylor is the Brand Ambassador at ROK Financial. She is responsible for raising brand awareness and business relationships with business owners across the country. Madison loves that she plays a small role in getting Business Back To Business Through Simple Business Financing and looks forward to hearing what you think about the blogs she creates! Madison has been working in the financial space for six years, and loves it! When she is not at work, you will find her at home learning a new recipe to test out on her family or going on new adventures with her friends.