Like any small company, clinics and other medically oriented small businesses will encounter various times when funding is needed, to solve cash flow gaps or invest in equipment. Have you encountered any of the following scenarios in financing for a medical business?
Financing for a Medical Business and Cash Flow Woes
Keeping a positive cash flow is a challenge for most small business owners; it can be particularly difficult in a medical business. Waiting on coverage decisions may mean a long period before you can bill or receive payment from the insurance companies or your patients.
When your available cash doesn’t meet your operating budget, you have few options: don’t pay the bills, use a credit card, or get some small business funding. Not paying the bills or completing payroll is a poor choice for any small business, damaging your credibility and your relationships with vendors and employees.
While credit cards can be helpful for small businesses, depending on a credit card to get you into positive cash flow is dangerous. A short-term small business loan can fill the gap until your cash flow is positive again, especially with a quick repayment plan that keeps total interest charges low.
Growth is good for a business; it’s also expensive. If you’re ready to expand your staff, move into a larger space, or open a branch in a different location, you’ll need financing for your medical business to make it happen long before you start seeing profits from the growth.
The need for space, and enough of it, is apparent when your current space is too crowded for your daily staff and patients. But when it’s time to expand, having a huge amount of cash on hand to do so is, often, unrealistic. A small business loan can make the expansion possible so you can start seeing increased profits before you’re too squeezed to do business.
Need to Improve
Physically expanding your space is only one part of growing your business. To improve efficiency, stay updated and relevant, and keep your office functioning well, you’ll need to periodically invest in improvements—which could include financing.
New computer and phone systems can come with a hefty price tag. Updating medical equipment is a significant investment. Funding is often essential to complete the necessary improvements that keep your business up-to-date.
Staffing and Training
An increased patient load, whether from organically growing demand, a new partnership, or a newly expanded business, means that your current staff might not be adequate.
Adding and onboarding new staff members to keep up with the workload is costly. Plus, it usually takes several months for new employees to reach full productivity. That means your business has to float the cost of the new employees for that entire onboarding and integration time in your business, as well as handling the cost of recruiting and training.
You might also need financing for a medical business to invest in additional training for yourself and your staff. A good practice will keep up with changes in the medical industry, new technology, and regulatory updates. Advanced training in specialties, customer care, and efficient practice methods (such as using medical scribes) can bring long-term growth and profitability to your business, but require an up-front investment.
Whether it’s for growth, improvement, or to stabilize cash flow, a reliable funding source can be essential to your success. How could your medical business benefit most from a small business loan? Here’s our fundability quiz to see if you qualify.