Both new and established medical professionals will require a loan to build a strong care system. There are many different loan options to help start and improve medical practices. Here are some loan types and how they can benefit you.

Term Loans

Term loans are what most professionals consider when obtaining a loan. A lender reviews your application and offers money with corresponding payment requirements. The length of the loan may vary based on the purpose of the loan. Short-term loans can have lengths as short as six months. Long-term loans typically last at least five years. Building loan terms extend to 30 years.

These loans typically require monthly payments and can come with high-interest rates, especially for new business owners with limited credit history. While banks are the most frequented lender, many alternative lending sources are available. They are less strict on credit history requirements and offer fast approval. These lenders often develop specialized loan options for medical professionals.

Equipment Leasing

Most medical practices know that equipment takes up a large portion of their budget. Specialized machinery is expensive and usually necessary for patient care. Leasing allows you to acquire equipment for a lower cost. Equipment leases work just as you expect. You obtain the machinery and pay a monthly fee. However, at the end of the term, you do not own the machinery. Some lenders allow you to purchase the equipment at the end of the loan. Leases can be less expensive than loans. They are beneficial if technological advancements are made faster than the life of the loan.

Lines of Credit

Medical practice lines of credit help you access short-term cash. Lenders approve your business for a specific amount, but you do not need to take the money immediately. Interest charges and payments are not incurred until you request the money. Interest rates are typically lower than rates for other loans.

SBA Loans

Consider meeting with your local SBA office to determine how their loan options benefit medical practices. When approved by SBA, they guarantee a portion of the loan, protecting the lender if you default. Banks that partner with SBA typically provide lower interest rates and longer payment terms. They may also be more available to businesses with a limited credit history. When considering these loans, be prepared for a lengthy application process, as you must first be approved by SBA and then by the lender.

Making informed financial decisions is a necessary part of managing your business. Understanding these business loan options can help you make the best choice for your practice.