When you’re ready to expand a medical practice, purchase equipment, or to start up a new practice or buy into an existing one, you will need significant financing. Where do you go for this, and what will they expect from you? The details differ depending on your situation and what you want to do, but there are lenders who are very familiar with the well-established criteria for each case. The key is talking to someone who can get you started and take you through the business loan process.
The Business Loan Process for Medical Professionals is Different
When medical professionals need financing for business, not all the traditional aspects of approvals in the business loan process will apply. Doctors and specialists are understood to have high earning potential, making them good risks over the long term. Doctors just starting out with a new practice may have high debt from their education – but this is not necessarily seen as a negative issue by lenders, because they are likely to be able to service the debt with their high earnings. When medical professionals seek to expand by purchasing new equipment, it often has a high resale value and can serve as collateral, so the doctor does not need to put up personal property to secure the loan. Lenders may all see the logic, but they are not all set up to lend to medical professionals. It is important to work with lenders who are experienced and comfortable with the commercial lending process as it applies to medical financing.
MediPro is a leader in medical practice financing. We are in touch with lenders all over Australia and can arrange excellent terms for business and practice loans for doctors. In addition, we have a unique specialty in home loans to medical professionals. Contact us on 1300 375 626 or through our contact page.
Whether setting up a medical practice for the first time, or buying into an existing practice, it is going to be expensive. You may need about $100 thousand or more just to get started. Some sources estimate first-year costs in excess of one million dollars. This can seem daunting, but it has all been done many times. You will definitely need to speak with medical financing professionals who thoroughly understand the commercial loan process and can guide you successfully to reach your goal.
Depending on the lender, practice loans may be available as a lump sum that goes directly into your business bank account, or as a line of credit that you can access as needed. A lump sum loan is usually less expensive, but a line of credit has the advantage that you are only paying back the amount you are actually using at any time.
A practice loan is generally unrestricted – it can be used for any legitimate purpose clearly related to your medical business. Good record-keeping becomes very important, so you can always show what is being done with the money, for example to the tax authorities should they take an interest.
Medical equipment loans are a special category in the commercial lending process. Major medical equipment is generally very expensive, so the loan has to be large. However, the equipment is normally well taken care of and doesn’t wear out in a typically medical office setting, and it will also not get out of date very quickly. Its intrinsic value is likely to remain high and it can easily be resold. Because of this, major medical equipment can often be used as collateral for its own purchase loan. This is frequently not the case in other industries, where equipment may be subject to accelerated wear through heavy use or because of harsh operating conditions.
How Long Does a Loan Take?
This is an aspect of the business loan process that can easily be overlooked. Some sources can take months, which is usually more time than an expanding business has to wait. It is important to answer this question before spending significant time with an application. The commercial lending process needs to be detailed and thorough, but lenders who understand lending to medical professionals know how to streamline things for you.
MediPro – Answering the Big Questions
There are a lot of big questions related to medical business loans. Get started with the answers by calling us on 1300 375 626 or contact us online. We look forward to showing you how exciting and rewarding your future as a medical professional can be.