Looking to finance your gynecology practice? When it comes to medical practice financing, there are numerous options for medical professionals and specialists. The best type of loan will depend on your specific requirements, goals, and needs. Do you need to access the funds ASAP? How fast can you repay the loan? Can you provide collateral? How flexible should the payments be?
If you don’t know where or how to begin your search, it’s best to start with the four most popular loan options for medical practices.
1. Equipment Loans
Gynecologists need various tools and equipment to do their job effectively. Medical equipment financing is a funding solution that’s solely for the purchase or lease of medical tools and equipment. You may need to submit a quote to potential lenders listing the equipment you need to get funded.
Equipment financing is a great option for expensive equipment purchases because the equipment serves as collateral for the loan. This lowers the risk for a lender, which means you’ll have a higher chance for approval.
2. Business Line of Credit
A business line of credit is much like a credit card. Once approved, lenders will give you a predetermined credit line where you can withdraw funds from when needed, but you only have to pay for the funds you’ve withdrawn, plus the interest. With a business line of credit, the funds are available anytime. Whether you want to use it now or let it sit for months, the funds will be accessible in your account.
Let’s say the lender approves you for a $50,000 credit line for you gynecology practice. If you’ve only withdrawn $20,000 for business expenses, this means you’ll only have to pay for the $20,000 plus the interest. You still have the $30,000 reserved in the bank which you can take out as needed. Once you’ve repaid the funds, you can withdraw from it again without having to reapply because the line is revolving.
3. SBA 7(a) Loans
An SBA 7(a) loan is one of the best loans for small business owners available, including gynecology practices. The U.S. Small Business Administration created these loans to help small business owners qualify for bank-rate loans. The government backs the loan by up to 85%, lowering the risk for the lender and increasing your chances for approval. Unlike traditional loans, SBA loans are flexible and have longer repayment terms and lower interest rates. For this reason, almost all small business owners try their luck in applying. However, application requirements are stringent. You’d have to prove you are a strong candidate to qualify and even then, approval isn’t guaranteed. To qualify, you need to show a strong borrowing background, high-quality credit score, and healthy cash flow.
Keep in mind that the SBA loan application can take time, weeks or even months. The paperwork is intensive, so prepare to go back and forth. Make sure your application documents are complete and updated from the get-go to save time and money. Since application and funding take time, make sure you don’t need immediate access to funds.
4. Term Loans
A business term loan is what most people know of when they think of a traditional business loan. Lenders give you a lump sum, and you repay it overtime with regular monthly payments, including interest. These loans can be tailored to the needs of your practice and goals of your practice. If you need quick access to funding and more lenient application requirements, you may want to apply from an alternative lender that specializes exclusively in the medical community.
A medical practice term loan’s repayment terms can range from one to five years, depending on the lender you’re working with and your application. You’ll pay an affordable monthly loan repayment, perfect for practices looking to manage and control cash flow. It’s better to use the funds form a medical practice loan to pay for expenses rather than using your practice’s cash on hand.
Medical Practice Financing for Gynecologists
At the end of the day, the best type of loan depends on your business’ needs. If you’re still on the fence on which loan to choose, SMB Compass can help determine the best loan for your gynecology practice. We offer a free, no-obligation medical practice financing consultation to help business owners in need.