Three Great Options for Medical Practice Financing

Steve O'Connor2018 Trends, Alternative Financing, Business Credit, Business Working Capital, Capital Advance, Uncategorized2 Comments

If you’re a doctor on the lookout for business financing, it can be tricky to sort through all the noise. Just about every website pitches loans that promise they’re the one—the perfect fit for your medical practice.

But, even after all those years of training in their field, most doctors don’t have a good sense of where to start on the search for small business loans. That said, doctors have high earning potential and typically qualify for most medical practice loans.

The problem lies in not knowing which of these options makes the most sense for your business goals. Do you own an established practice looking to expand or are you trying to build a new practice from scratch? Do you need a loan for equipment or real estate or to cover payroll expenses?

This information should be documented in your business plan—to help you out, here are three options for medical practice financing:

1. SBA Loans

The US Small Business Administration offers a number of loan programs to potential borrowers across the small business spectrum. The SBA doesn’t actually loan the money themselves, rather, they vet borrowers and direct them to a bank that facilitates the arrangement.

The reason for going through the SBA, rather than directly from the bank is that if a bank sees that the SBA considers you to be a worthy borrower, they’ll be willing to take more risk than if you came into this deal on your own.

For that reason, an SBA loan is a good option if you don’t qualify for a traditional business loan or if you’re trying to get a loan for an acquisition.

Additionally, SBA loans will likely provide lower monthly payments than a traditional bank loan. For the ins and outs of using an SBA loan for medical practice financing, check out to learn more about this process for medical practice financing.

2. Practice Acquisition Loans

Buying a medical practice is going to be one of the biggest investments you’ll ever make—from the building to the equipment, and the costs it takes to get this venture off the ground. A practice acquisition loan is one of your best options when it comes to medical practice financing if you’ve got a way to go set up shop.

Bank of America and Wells Fargo have specific programs designed to cover medical practices, and there are also lenders like US Medical Funding which focuses on medical and dental borrowers.

3. Working Capital Advances

A capital advance might be a good option for medical practice financing if you’ve already got the bones in place but need some extra cash to cover things like payroll or vendor obligations. Capital Advances cover the day to day stuff, on an as-needed basis. They aren’t designed to cover major equipment or long-term operational expenses, but they can solve your short-term cash flow problems.

Why Capital Advance is such a good tool for those interested in medical practice financing has a lot to do with the ability to help you fill in the gaps left by slow-paying patients or insurance providers, or at certain times of the year when things are slow.

In the end, finding the right solution for your medical practice comes down to where you’re at in terms of setting things up. Working capital is great if you need flexibility while securing an SBA loan can be a real boon for first-time borrowers.

Call Wellen Capital at 888.963.6130 to learn more about working capital and how it can work for your business.

2 Comments on “Three Great Options for Medical Practice Financing”

  1. Dear Wellen,

    I am president and co-owner (50% shareholder) in a small 3 doctor podiatry practice. My partner and I bought the practice almost 3 years ago from doctor #3 for $450,000. We pay him back monthly over a 7 year agreement for ~ $5400. We currently owe ~ $280,000. Our goal is to acquire a business loan to reduce monthly payments, and have tax deductible interest, over a 10 year loan period. I have received a quote from Wells Fargo but wish to explore all of our options. Thank you.

    1. Dr. Larned – thanks for reading our post about medical practice financing options. Capital advance might be able to play a role. I’ll email you directly. – Steven O’Connor

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