Alternative Business Loans for Physicians & Medical Practices

Owning and operating your own medical practice certainly involves a lot, but finding funding for that practice doesn't have to be all that complicated. In fact, there are a variety of financing options to consider that specialize in loans for physicians.

When you are ready to start or invest in expanding some aspect of your medical practice, there are three primary options to consider.

Equipment Financing Loans for Physicians

If you have your own medical practice, you’ll be needing a lot of different equipment in order to best serve and treat your patients. All this equipment can get expensive quickly and when looking at the various loans for physicians that are available, equipment financing loans stand out as the best way to afford everything your practice will need. With equipment financing you won’t have to pay the full cost for all the equipment you need up front and they’re easier to qualify for than many term loans.

Equipment financing is great for large, costly equipment purchases like MRI machines because the equipment is used as collateral for the loan itself. This means the lender is taking a smaller risk and you will rarely have to use any personal property as collateral or even submit a down payment.

Obviously, equipment loans have a very limited purpose, but they are amazing options for that purpose considering how easy they are to qualify for and the collateralized nature of the loan.

Lines of Credit

Another common option for physicians looking for funding is setting up a line of credit with a bank or credit union. The big advantage here is that once a line of credit is established, those funds will be available as long as the account is kept open.

In fact, many medical practice owners use lines of credit in order to bridge cash flow in between the delivery of patient care and the reimbursement they receive from insurance companies. It’s also the easiest to obtain for practices that already have established patients, billing, and collections in place.

Lines of credit also offer flexible repayment options, which make them ideal for anyone willing to put in the time to get one open and renew it regularly.

SBA (7a) Loan

Generally referred to as a small business loan, the SBA (7a) is the most popular of all the different SBA loans.

While not specific to the medical field, it’s still one of the best ways for your medical practice to get the financial assistance it needs. With use-case flexibility and great terms, an SBA loan can give you a large amount of capital with lower interest rates and longer repayment terms. It can be used for anything you need – equipment, operating expenses, vendors, office space, et cetera – so you’re equipped with cash to handle any issues that may arise in your practice.

The only disadvantage of this loan is the time it takes to apply and get approved. The SBA (7a) is highly sought after and requires a strong credit background, steady finances, and two years of business history.

With these requirements, doctors and their established medical practices make for very strong candidates, but the amount of paperwork and red tape can make the process time-consuming. Thus, it’s not a great option for those who need access to funds quickly, or for those just starting out.

Unsecured Funding for Physicians & Medical Practices

In addition to equipment financing loans, lines of credit, and SBA loans, physicians also have access to unsecured funding — and for many practices, it fills a gap the other three options leave open. Equipment financing only covers the equipment itself, a line of credit works best once a practice already has established billing and collections history, and an SBA loan, while flexible in use, can take months of paperwork and generally calls for a couple of years of operating history to qualify. Unsecured funding doesn't carry any of those constraints: the money isn't tied to a specific purchase, there's no minimum collections history required, and approval typically moves in days rather than months.

Physicians are also in a somewhat unique position among small business borrowers. Because of the income stability and earning trajectory associated with the medical profession, many lenders extend more favorable unsecured terms to physicians than they would to a typical small business owner, even for newer practices still building a patient base. That's part of why medical professionals can often qualify for preferred rates and terms that wouldn't be as readily available to other first-time business owners in a similar financial position.

Jumpstart Finance can help you access various types of funding to support your medical practice. Submit your inquiry here and connect with a Loan Advisor today.