What You Need to Know
When you’re running a medical practice, you’re constantly investing in your business to stay ahead of the curve. You need to replace and upgrade your equipment regularly and attract and hire top-notch nurses and doctors to offer your patients the best possible care.
At the same time, your cash flow may be uneven as you wait for reimbursement from insurance companies or out of pocket payments from patients for procedures.
Financing for your doctor’s office can help. A line of credit or short-term loan can help you manage cash flow, purchase equipment, or expand your practice. Here are some ways that a small business loan for your medical practice can help.
Types of loans available for doctors
1. A Business Line of Credit: A business line of credit gives you access to flexible, revolving funds when you need them for your practice. With a line of credit, you borrow what you need, pay down the balance, and the funds are replenished so you can use the line again. Many medical practice owners will use a line of credit to bridge cash flow in between reimbursement from insurance companies. Learn more about OnDeck's Business Line of Credit.
2. A Short-Term Business Loan: Many online lenders offer short-term business loans for small businesses like medical practices. With terms that range from three months to three years, this type of financing makes it possible for a doctor's office to borrow capital and repay it quickly—often making the total dollar cost lower than a longer-term loan. Getting a short-term business loan from an online lender can be much quicker than getting a traditional loan from a bank – typically, the borrower can apply in minutes and get their funds within days. Many doctors will use a short-term loan to make improvements to their office, add another line of service, or purchase new technology or equipment to better serve their patients. Learn more about OnDeck's Short Term Business Loan.
3. Equipment Financing: Equipment financing is another way to finance the purchase of business equipment, besides just using a loan or line of credit. Any tangible asset used in business operations can be considered business equipment. For medical practice owners, this can include autoclaves, x-ray imaging equipment, computers, and diagnostic tools like medical scales and ECG monitors.
4. A Bank Loan: As a business owner, the financing option you’re likely most familiar with is a traditional bank loan. A bank loan typically requires collateral to secure the loan, and the application process tends to take several weeks. The length of the loan can be anywhere from 2-20 years. While the interest rates on a bank loan can be attractive, doctors may find the application and funding process too slow for their cash flow needs.
5. The SBA (Small Business Administration) Loan Guarantee Program: Although the SBA is not a lender and provides financing through participating banks and credit unions (among others), the SBA Loan Guarantee Program will sometimes qualify a borrower who might not otherwise meet the more rigid criteria required by the bank. If your medical practice is an established business, with a few years under its belt, and your personal credit score is above 680, this could be an option for your practice. Similar to a bank loan, the application process tends to take several weeks and may not move fast enough for your practice’s cash flow needs.
I applied for financing from OnDeck when I was trying to move my practice from Honolulu to Pearl City. I was stunned how quick the approval and funding happened. Where my local bank took several weeks to approve my SBA loan and then get the funds into my account, OnDeck took only a couple days.Dr. Reed Shiraki
Honor Box Chiropractic
Pearl City, HI
Resources for Medical Practice Small Businesses
Cash Flow: What Business Owners Should Know
You’re not alone if you find it to be a challenge to keep your cash flow steady as a medical practice owner – check out our tips on how to maximize your cash flow.Learn More
Unsecured v. Secured Loans
What are the pros and cons of unsecured v. secured business loans? Learn more about the use cases for each and about another option available to borrowers today.Learn More
How to Evaluate and Evolve Your Small Business Marketing Plan
As a medical practice owner, every resource you invest in your business is precious. While marketing is essential to sustain your business, how do you evaluate which initiatives are working?Learn More