Launching a new business practice or expanding a current practice should be an exciting part of a doctor’s life, but it’s not a task that is easy or cheap to do. A medical practice loan can be a life-saver for a new family practice or specialist’s office, and it’s designed for medical professionals to address the costs unique to this profession.
This article explores medical practice loans, condescends the available answers you need to know, and gives you the necessary information to make the next step.
What Are Medical Practice Loans and Who Qualifies?
Medical practice loans are loans designed to assist doctors and medical specialists in obtaining the funding they need for their business.
These business loans for healthcare professionals focus primarily on doctors, dentists, and healthcare professionals who are currently practicing in someone else’s clinic or who are already licensed and are looking to start a practice. There are also SBA loans for healthcare providers as well as healthcare business loans.
Most medical and healthcare professionals are eligible for these medical loans, including family and general physicians and specialists in areas including pediatrics, plastic surgery, dermatology, or podiatry.
However, this doesn’t mean that all lenders have these requirements.
Lenders and products exist in this industry to make medical practice loans available to doctors, dentists, and other medical professionals even during residency when they are still planning to open their first practice. There are also SBA loans for medical practices.
To qualify for the business loan, the loan provider will usually look at the economic health of the current practice (if there is one) and the credit of the individual requesting the loans.
All loans, which may be secured or unsecured loans, may expect the doctor borrowing to sign a personal guarantee which makes the doctor personally liable for repaying the loan. Always ensure you are aware of the fine print and know who is responsible for the loan.
Common Types of Financing for Qualifying Medical Practices
There are many different types of products that are available for medical practice loans with varying limits.
The most common types of medical practice loans are:
- Bank medical practice loans
- Non-bank loans
- Short-term loans
- Business lines of credit
- SBA 7(a) Loans offered through the U.S. Small Business Administration. They limit interest rates and regulate fees that must be paid. There are SBA loans for physicians.
- Equipment financing
Medical loan requirements determine the borrowing product, what the issuer offers, and what the doctor will use the money for, so they can vary wildly.
For example, a loan focused on medical equipment financing so an existing practice can purchase additional or improved inventory will be much less than a commercial loan for a doctor opening a new specialty practice that is being built from the ground up.
However, both are medical practice loans and will have similar requirements for the borrower. Medical business loan rates vary.
What Can a Medical Practice Loan Be Used For?
Frequently, medical practice loans are for purchasing a new clinic that is to be created from the ground up to the doctor’s specifics or for the purchase of an existing clinic, and then ownership changes hands. There are also medical business loans for doctors.
New Clinic Costs
- Buying or leasing the clinic building and associated fees
- Aesthetic and furnishings for the clinic
- Purchasing medical equipment
- Purchase office supplies and consumables
- Related vehicles for community work
- Obtaining and paying for insurance premiums
- Marketing, research, and advertising expenses
- Employment costs, including training
Existing Clinic Costs
- Pre-existing debts that the new owner is responsible for
- Renovations and re-branding
- Marketing and advertising to ensure continued support from previous clientele
- New equipment costs and repairing old equipment
- Staff salaries
- Consumables like office supplies
- Monthly expenses and insurance premiums
Choosing a Line of Credit For Medical Professionals
A credit line operates differently from a loan and is a viable option for medical professionals. Many banks are even offering a line of credit tailored for medical professionals.
This offer isn’t just for doctors purchasing their first clinic either; many offer “student” lines of credit for doctors in residency to help with their studies and assist in saving up for after they graduate.
Lines of credit connect to a bank account or credit card with lower interest rates. Businesses can use these lines of credit repeatedly while they are paid back. These are excellent options for a doctor who wants to partner with just one bank as all their financial products are under the same roof.
Apply in Seconds With Funding In Just a Few Hours
Applying for a medical practice loan is a straightforward process with ROK Financial. You'll need 3 months of your recent business bank statements along with a signed application. Applying takes less than 1 minute and you can have approvals within 24 hours.
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.