Opening a medical practice isn’t an easy task for most people. Even a small practice can cost over $70,000 to get up and running.
Luckily, doctors have plenty of options when it comes to choosing a loan for their business.
Not sure where to start? Don’t worry, we’ve got you covered.
Let’s take a look at everything you need to know about medical practice loans and how to find the best one for your needs.
Term Loans
As the name suggests, this type of financing is relatively straightforward.
You get a lump sum from your lender with a designated time to repay the amount in full plus interest. Your interest rate will vary depending on who you borrow from, but there are other factors that could influence the rate you get.
These include:
- Your credit score
- Your payment history on other debt (car loans, mortgages, etc).
- The length of your loan repayment
Short-term loans typically have lower interest rates since it takes less time for the lender to get their money back. Long-term loans offer smaller monthly payments, but your interest rate will typically be higher.
Medical Practice Loans
These loans are created with medical professionals in mind.
Since the loan is specifically for opening a medical practice, lenders are less likely to scrutinize you over factors that would normally impact your interest rate.
Since you will have such a high earning potential as a practice owner, it makes more sense for the lender to be more flexible with you. So, consider this option if you feel like other lenders may be biased toward your reliability as a borrower.
A Business Line of Credit
A line of credit for a business is essentially a credit card that you can use for business expenses. You have a set amount of money loaned you can draw from, and you only pay interest on what you spend.
This option is perfect for those who want to use their loans for continuous expenses that they can pay off when they’re able to. It’s also good for borrowers who fear they may take too much money out at once.
Also like a credit card, though, business lines of credit can come with high-interest rates.
Financing for Medical Equipment
Unfortunately, medical equipment is often expensive enough to be outside of a doctor’s financial range.
Medical equipment financing is a uniquely convenient option, however. Rather than putting forward a down payment or your own collateral, the equipment itself serves as collateral for the loan.
So, you’re able to use this equipment to generate income and then pay off your equipment loan.
In general, repayment plans will last around how long the equipment itself does, so be prepared to continue this process for at least a few years.
Handling Medical Practice Loans Can Seem Difficult
But it doesn’t have to be.
With the above information about medical practice loans in mind, you’ll be able to make the best choice for your future and reach your medical practice goals.
Want to learn more about medical business loans? This article has all you need to know.