Specializing In Medical Practice Loans For Doctors & Healthcare Businesses.
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Practice Loans
Intro To Medical Practice Loans
Intro To Medical Practice Loans
Doctors are the last people you’d expect to need extra cash. While annual salaries for medical professionals may be quite rewarding, the same cannot be said about the payment structure for a medical business.
A FEW WAYS TO USE YOUR FUNDS:
- Pay off Equipment Leases
- Pay Bills while Waiting for Insurance A/R
- Advertise Your Business
- Advertise Your Business
To Learn More about Business Loans for Doctors, Medical & Healthcare Practices
or email us at
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In this guide, we’ll answer the following questions and more:
- What Are Medical Practice Loans?
- How Do Medical Practice Loans Work?
- What Are The Advantages of Medical Practice Loans?
- What Are The Disadvantages of Medical Practice Loans?
- Who Qualifies For Medical Practice Loans?
- How To Apply For Medical Practice Loans:
- What If I’m Declined For a Medical Practice Loan?
What Are Medical Practice Loans?
Medical practice loans are business loans geared towards a medical practice’s small business cycles and expenses. Besides covering short-term and long-term costs, a medical practice loan allows medical business owners to stabilize their cash flow cycle and maintain operations during slow periods.
Medical practice loans can come in the form of:
Working Capital Loans
Revenue Based Business Loan
Invoice/Receivables Financing
Business Term Loans
Business Line Of Credit
SBA Business Loans
Merchant Cash Advance
Equipment Financing
How Do Medical Practice Loans Work?
The central purpose of medical practice loans is to give medical professionals the option of several products to suit their small business needs best.
For example, one of the biggest challenges of medical practices is the amount of time it takes to receive full compensation or only small amounts of cash coming in at a time. This can be especially troublesome when business slows down, or essential medical equipment becomes outdated.
These dilemmas can be solved by several products, like business lines of credit, medical equipment financing, business term loans, or accounts receivable factoring. Equipment financing might be the most sensible option if the medical equipment is costly and used for at least three years.
On the other hand, a business line of credit is designed to cover short-term expenses, like monthly bills or inventory.
However, if you’re waiting for sizable insurance reimbursements, you would sell the unpaid receivables for a discount. Instead of waiting weeks (or even months) for compensation, you’d get cash in just a few business days.
It is now the responsibility of the factoring company to collect the payment from the insurance carrier. You get paid the remainder of the first sale minus fees when the payment is received.
If you have subpar credit or rocky cash flow, you might consider a merchant cash advance instead. This highly accessible option allows you to borrow against the strength of your debit and credit card sales.
For many doctors, this is the preferred payment method for their patients. You could theoretically access plenty of cash to get through a slow season without making substantial payments until business picks up.
Business Loan Options Compared
LOAN TYPES
- Merchant Cash Advances
- SBA Loan
- Business Term Loan
- Business Line of Credit
- Receivables/Invoice Financing
- Equipment Financing
- Revenue Based Business Loans
MAX AMOUNTS
- $5k – $1m
- $50k-$5.5m
- $10k to $5m
- $1k to $1m
- $10k-$10m
- Up to $5m per piece
- $5K – $1m
RATES
- Starting at 1-6% p/mo
- Starting at Prime + 2.75%
- Starting at 1-4% p/mo
- Starting at 1% p/mo
- Starting at 1% p/mo
- Starting at 3.5% (SBA)
- Starting at 1-6% p/mo
SPEED
- 1-2 business days
- 8-12 weeks
- 1-3 business days
- 1-3 business days
- 1-2 weeks
- 3-10+ business days
- 1-2 business days
How Do Medical Practice Loans Work?
Medical practice loans give medical professionals the resources to maximize their service capacity. You can continue taking appointments without worrying about insufficient medical equipment, supplies, or staff to meet demand. This makes busy periods much less overwhelming.
Medical technology also becomes more advanced very quickly. Healthcare professionals can acquire these tools immediately, thanks to medical practice loans, even during slow periods.
At United Capital Source, your current cash flow doesn’t have to be perfect to access the loan amount and repayment terms that make the most sense for your medical practice.
Another significant advantage is staying current on bills while waiting for insurance reimbursements or patient co-pays to come in. Establishing a solid payment record with vendors or suppliers can give you access to discounts, lower rates, or longer repayment terms in the future.
Lastly, it’s important to remember that even though most medical professionals started their careers to help people, they must stay competitive like any other small business owner. This might involve ramping up their advertising or renovating their waiting area.
The medical payment structure doesn’t make it easy to put money away for growth, hence the necessity for a medical practice loan.
What Are The Disadvantages of Medical Practice Loans?
With so many potential expenses and cash flow gaps, some small business owners might find it challenging to choose the right business loan program for their financing needs. Choosing the wrong loan terms can pressure your cash flow and ultimately take your attention away from your number one concern, which is helping your patients.
The likelihood of this scenario decreases when you research each option before seeking funding. However, many doctors would likely admit that they are far too busy to research business loan products and online lenders while running their businesses.
The myriad of financial dilemmas medical practices face also makes it hard to figure out how much to borrow. Asking for too little could leave certain expenses unaccounted for.
On the other hand, asking for too much could give you more debt than you can afford to pay back. Doctors are more likely to commit the latter mistake since it often seems like their recurring expenses are getting larger by the minute.
Medical Practice Small Business Loan Pros & Cons
Here’s a quick summary of the pros and cons of using business financing to grow your medical practice.
- Pros
- Funding to help develop and support your medical practice.
- It allows you to stay current with medical equipment and other resources.
- Enables your practice to compete with other medical practices.
- You can continue offering services while waiting for outstanding invoice payments.
- Staying up-to-date on payments helps with vendor relationships.
- Pros
- It can be challenging to determine the best financing product for your needs.
- Doctors and other healthcare professionals don’t have time to research loans.
- You run the risk of borrowing too much or too little.
- You must pay interest on medical practice loans.
Who Qualifies For Doctors, Medical & Healthcare Practices?
Approved businesses generally met the following criteria:
ANNUAL REVENUE
$75K+
CREDIT SCORE
550+
TIME IN BUSINESS
6 months+
How To Apply For Medical Practice Loans:
The amount of paperwork required for the application depends on your chosen product. For most loans and lines of credit, funds can be approved and distributed within three business days.
Here’s how to apply:
Step 1: Choose the Right Product
The first step is choosing the most sensible loan terms for the problem at hand. This should require a decent amount of research, as each loan program is designed for different expenses and cash flow cycles.
Are you looking to cover a short-term or long-term cost? Is demand expected to increase or decrease in the coming months?
Considering the funds’ purpose will also help determine the best loan amount and terms for your needs.
Step 2: Gather Your Documents
Here are the documents and information required for medical practice loans:
- Driver’s license
- Voided business check
- Bank statements from the past three months
- Invoice for equipment (for Equipment Financing)
- Credit card processing statements from the past three months (for Merchant Cash Advance)
- Accounts Receivable Aging Report (for Accounts Receivable Factoring)
- Accounts Receivable (for Accounts Receivable Factoring)
- Debt Schedule (for Accounts Receivable Factoring)
SBA 7 (a) Loans and other types of SBA loans require additional documents and information like business tax returns, for example.
Visit our SBA Loan page to learn what’s needed for the SBA 7 (a) Loan application.
Step 3: Fill Out Application
You can begin the application process by calling us or filling out our one-page online application.
Either way, you’ll be asked to enter the information from the previous section along with your desired funding amount.
Step 4: Speak to a Representative
Once you apply, a representative will reach out to you to explain the repayment structure, rates, and terms of your available options.
This way, you won’t have to worry about any surprises or hidden fees during repayment.
Step 5: Receive Approval
If and when approved, funds for Business Term Loans, Business Lines of Credit, Working Capital Loans, Equipment Financing, Merchant Cash Advances, Revenue-Based Business Loans, and Accounts Receivable Factoring should appear in your bank account anywhere from 24 hours to one week.
For SBA Loans, it usually takes 3-5 weeks to receive funding.
How To Apply For Medical Practice Loans:
Your business loan isn’t just a way to get financing for your business. It’s also an excellent opportunity to start building (or improving) your credit.
Regardless of the type of business loan you get, make all of your required payments on time and in full. Keep your balance below the credit limit if you get a business line of credit or another form of revolving credit.
Consistently making your business financing payments on time and in full will positively impact your business credit, depending on the loan program. And that means preferred rates and terms when you next need financing.
What If I’m Declined For a Medical Practice Loan?
If your application is declined, it might be because you applied for the wrong product for your cash flow. In this case, we would likely recommend a different product with less hazardous repayment terms.
Your application might also be declined after determining that you cannot afford more debt. Instead, your needs and financial circumstances might be better suited for another financing tool, like a business credit card or a personal loan.
Both options can be accessed through UCS and are usually much easier to qualify for than small business loans from traditional banks.
If your personal credit score prevents you from accessing financing, you should consider these credit repair services. We can help you identify the issues that keep your score down and develop practical solutions for eliminating them.
We have access to various business loans for Doctors, Medical & Healthcare Practices.
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FAQs
Doctor Practice Loans FAQs
Medical Practice Loans are utilized by a wide range of healthcare professionals, including doctors, dentists, chiropractors, optometrists, and other specialized practitioners to support their practice expansion, equipment purchases, and operational needs
Collateral requirements for Medical Practice Loans can vary depending on the lender and the specific terms of the loan. While some lenders may request collateral, many medical practice loans are unsecured and do not require assets to secure the funding. However, the terms and conditions can differ, so it’s important to review the loan agreement carefully to understand the collateral requirements, if any, associated with your specific loan.
Qualifications include a strong credit history, an established practice, financial stability, a business plan, and possibly collateral or personal guarantees.
Doctors and medical practices should consider using Accounts Receivable Factoring because it provides immediate access to cash by selling their outstanding invoices. This can help improve cash flow, cover operational expenses, and ensure a steady income stream, allowing them to focus on patient care rather than waiting for payments.
Yes, it is possible to factor accounts with government agencies in some cases, but it may depend on the specific agency and their policies. It’s advisable to check with your factoring company or financial institution to determine if this option is available for your accounts.
Yes, you may still be eligible for a Medical Practice Business Loan even with bad credit, but your options and terms may be limited. Lenders often consider various factors, so it’s recommended to explore loan options and work on improving your credit to secure more favorable terms.
Medical Practice Loans are utilized by a wide range of healthcare professionals, including doctors, dentists, veterinarians, chiropractors, physical therapists, optometrists, and other healthcare practitioners. These loans help fund various practice needs, from equipment upgrades to expansion and working capital requirements.
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