11 Jul Top 3 Loans for Medical Practices
Establishing and running a medical practice is neither easy nor cheap! Doctors have to deal with a wide range of expenses, including high student loans, medical association fees, licensing costs, costly medical equipment, and malpractice insurance, among others.
On the other hand, medical professionals also have relatively easy access to business financing, including medical practice financing – every cloud has a silver lining. The high earnings, business collateral, and low default rates expose doctors to numerous medical practice loans. Below are three of the most attractive and practical loans for medical practices:
SBA 7 (a) Loan
A Small Business Administration (SBA) loan is a government-backed financing program designed to support small businesses. An SBA-approved lender provides funding to a successful applicant with a guarantee of up to 85% by the federal agency. The SBA 7 (a) is highly coveted due to the long repayment period, high funding, limited collateral, and significantly low interest rates.
Although an SBA 7 (a) is arguably the best financing option for medical practices, it has its fair share of shortcomings. Applicants have to deal with bottlenecks such as rigorous paperwork and a lengthy waiting period for medical practice financing. Therefore, a doctor seeking an SBA 7 (a) loan must have a strong credit score and an admirable business history to obtain a medical practice loan through the SBA.
Non-Bank Term Loan
An alternative lender provides a non-bank term medical practice loan after agreeing to certain terms such as the interest rate and repayment period. Unlike the SBA 7 (a) loan and lending from traditional banks, a non-bank medical practice term loan is more accessible with fewer bottlenecks (qualification requirements, speed of approval, less paperwork, etc.). But in an attempt to compensate for the higher risk of default, medical practice term loan lenders often charge relatively higher interest rates, which can make this form of medical practice financing not ideal for every physician.
Business Line of Credit
A business line of credit is a medical practice financing option that functions similar to a credit card. Whereas SBA and medical practice term loans disburse the entire principal amount to your business account, a medical practice business line of credit allows the medical professional to withdraw funds when the need arises – interest is only applied to the withdrawn amount. This medical practice business line of credit is often referred to as a cash cushion since it safeguards a medical practice from working capital and related short-term liabilities.
Takeaway – The Best Medical Practice Loan
It is clear that doctors and other medical professionals have access to a wide range of financing options to fund their medical practice, but which is the best medical practice loan? The answer to this question depends on your specific business needs and terms of the medical practice funding. Regardless of your preferred medical practice funding option, you can rely on Ameritech and Associates to meet your medical practice loan needs.