There are many reasons why doctors, chiropractors, and other medical professionals want to open their own practice. However, financial expenses are a huge setback in achieving this dream. In fact, you’ll need at least $100,000 to open your business and it doesn’t stop there. Operating expenses might go up to $1.1 million every year! Which is why many healthcare professionals look into medical business loans to help them fund their practice’s startup cost.
There are different types of medical business loans available in the market. To help you make informative decisions, here are three type of medical business loans.
SBA for Medical Business Loans
Small Business Administration (SBA) has financing programs that can help medical professionals acquire long-term medical business loans. This is great for startups without much credit history or cash flow that banks would normally demand. The SBA isn’t the one lending the money; they only cover a percentage of the lender’s losses if there’s any borrower default. Here’s a list of documentation needed to qualify for SBA loans:
- A/R & A/P aging schedules
- Business tax returns
- Business financial statements
- List of collateral
- Personal financial statements
- Personal guarantee
- Personal tax returns
- Schedule of liabilities
Business Line of Credit
The business line of credit is similar to a business credit card. The lender will have to approve the line of credit at a set amount. The difference is that you only pay interest on the funds you loaned. The good thing about a business line of credit is you instantly get access to the funds after approval. Even if you don’t use the money for months on end, it will still be there whenever you need it.
This type of loan is specifically for buying or upgrading medical equipment. All you have to do is submit a quote to a lender and wait for the approval. Keep in mind that equipment financing is limited to buying specific items. It’s great when you purchase large and expensive equipment, such as an MRI machine since the equipment itself is the collateral – not your personal property or cash for a down payment.
Do you want to know more about medical business loans? SMB Compass has a team of professionals ready to answer all your queries. Feel free to visit our website SMB Compass or via phone (646) 569-9496.