Medical practice financing for medical practice loans is the goal of most new and established medical practices seeking working capital. There are many aspects of medical practice financing that you need to be aware of before you hope to get financing for your medical practice! You want to make sure your healthcare medical practice gets all the funds it needs in a single practice finance loan to have a successful operating practice!
Seeking medical practice financing for your healthcare practice needs is one of the most important steps in securing healthcare working capital funds to support your practice. Obtain the proper financing to help you purchase expensive equipment or upgrade your office setup and/or improve your medical practice’s daily cash flow requirements.
Operating a health care practice is more difficult than you would have imagined! You need to have a good understanding and control over the business end of your medical practice’s daily cash flow needs! Finding the right lender to get medical financing approved for your practice is critical to getting the funds you need for your healthcare practice!
The good news is that health care lenders generally consider doctors to be a good investment depending on personal credit scores! Even in our current tight lending business economic climate, banks are tightening credit and loans are continually being turned down. Finding the right healthcare lender in the healthcare practice industry has been a challenge for the medical professional.
Specialist healthcare lenders are still in the business of making profitable loans for your portfolio, so finding solid, reliable medical practices to finance is doable with the right lender. As a general rule, physicians are viewed favorably in the banking world for financing their practices for medical working capital and medical term loans.
Physicians are considered good credit risks because, on a percentage basis, healthcare practitioners have very few defaults. In medical practice financing, dentists, doctors, and all healthcare professionals generally have better personal credit scores, making them good candidates for medical practice loans and installment financing.
However, in cases where doctors have had a poor personal credit history, it is recommended that the practitioner contact a credit repair company to improve their personal FICO credit score before attempting to apply for financing. of medical practice. Medical financing loans can exceed the $5 million range, so you want to be in good financial standing with respect to your credit history so that you are eligible for the most attractive loan terms and rates.
Another exception to this rule is in the case of the start-up of new medical practices. Like so much else in our current tough economy, lenders are cutting back on initial medical practice financing, making it extremely difficult to obtain financing. Lenders are less certain about medical practice financing because these services are currently riskier in today’s credit world for startups. This does not mean that you will not get financing for your initial medical practice, you just may not be able to find the 100% of the capital that you are looking for.
Having been in the healthcare practice industry for a number of years, you may want to consider expanding into multiple offices for medical practice growth. Using additional medical installment loans can help you expand your medical practice to new heights and grow into a larger space, invest in new technology, and make your medical practice more efficient, allowing you to offer additional services for your practice. health care doctor.
To grow a health care physician’s practice, the physician must consider the time value of money. So if the doctor can receive funds, she must consider how much additional income those funds will generate. If the practice’s revenue is less than the cost of funds and is positive, the physician should proceed with funding. The concept of time value of money comes into play in that the physician does not have to wait for funds to be collected from insurance providers with his current sales, but instead enters by receiving the funds sooner than expected. he would have had the money to get the cash flow from the medical practice.
So while this may cost more in the long run, the Doctor will get the benefit of generating income sooner and have a lasting effect on income and your daily cash flow. The cost of funds will end and then the entire profit will go to the doctors with cash flow financing.
Physician Medical Practice Healthcare Financing and Practice Working Capital
Healthcare medical practice working capital financing is ideal for healthcare professionals who want to expand their practice, acquire new equipment, or improve their practice. Working capital loans for health care practice and financing from health care lenders come with fast working capital financing, quick and easy terms.
Health care practice working capital funds may be used to provide a health care physician with an existing practice with the necessary funds to purchase a medical building or they may use these working capital funds for a down payment on building. Typically, a monthly mortgage payment can be the same as or, in many cases, less than what the doctor or medical office pays for the rented office space. Therefore, if the physician or the physician’s health care practice does not have cash available to purchase the medical building, they may be able to obtain practice working capital financing to obtain the necessary funds to acquire a building for their practice. existing medical care. The practice’s bank statements and a one page application is all that is generally needed to apply and see if the doctor’s healthcare practice qualifies for working capital financing. This may fulfill the doctor’s dreams of now owning an investment property that the doctor now owns.
When a physician or medical practice is looking to purchase equipment, the physician may not have the necessary down payment to make the lease purchase of the equipment. Working capital financing is a good way to get the doctor to obtain the necessary up-front medical working capital funds to lease the equipment. Having certain equipment up-to-date is often a good way to steer patients away from competing doctors.
Let’s say the doctor’s practice is looking to own an asset, such as equipment quickly, but doesn’t have the working capital funds. Getting the doctor into a working capital financing practice will allow the doctor to purchase the equipment and pay off the practice’s working capital financing in 6 months. At that point, the team is free and clear ownership and there are no loans or leases on the books, just the team asset. When you calculate the cost of financing the equipment this way, it costs the same as taking out a long-term loan, but this pays off quickly, and the doctor now has an asset that the doctor can always sell for cash.
No matter what your doctor’s office needs to buy, even if it’s personal items like a home, working capital financing based on your existing doctor’s office is a good way to provide the necessary funds to make that purchase. Buying a good software system will also save the doctor money because it should free up time from an employee’s time. Working capital financing will pay for this asset, which is another good way to improve the practice and how it works.
Debt consolidation is another way to organize all of the doctor’s debt so that the doctor spends less time fumbling around with the various payments for all the different payments needed. Hiring a marketing company to increase revenue is another good way to use a practice working capital advance. The down payment required for this marketing venture is where the practice working capital advance can be used.
Also the peace of mind of being able to pay bills on time is another reason to receive working capital financing. If a doctor’s office needs 100% medical financing for their office and you have a deteriorating personal credit score, then it’s a good idea to try to clean up the doctor’s FICO credit report. Any medical practice professional needs their personal credit score to stay up to date.
It is easier to receive practice working capital financing when a personal FICO score is above 660. One way to increase a doctor’s personal score is to ensure that the existing credit balance does not exceed 50% of the available credit limit. . If the debt exceeds 50% of the card limit, it is a good idea to transfer the debt to another card.
This will spread out the debt but keep your debt-to-income ratio lower. Another good thing you can do is open new cards and not use the card. The more cards you have and no balances, the higher your personal credit limit. You have to use the card at least once a year so the credit card company doesn’t go out of business. Closing cards will lower your personal FICO score because it will lower your personal credit limit!