Financing a medical practice can be costly. After going through medical school and residency, you may think it is time to have a medical office. After getting years of experience, you might be a candidate for a medical practice loan. There are also some options for doctors who are still in residency and want to open up a practice. Here are some ways you can finance your medical practice.
Medical Practice Loans
You can find these types of loans at traditional banks or with specialized online lenders. What makes medical practice loans different from conventional loans is that they are more lenient and designed for other expenses of doctors. While other loans would count a high amount of debt against you, these medical practice loans generally do not, depending on how much you can potentially earn. You also may have higher borrowing limits due to the unique medical equipment and licenses a doctor or dentist has.
If your specialty requires unique equipment, an equipment loan may be suitable. You can use this funding to get what machinery or items you need to run your practice. However, be sure that you don’t get a loan that lasts longer than the equipment if it is an item that can quickly wear out. Research what medical equipment you need and how long it generally lasts. Other equipment might be software, exam tables, or imaging machines.
Term loans give you a lump sum of capital upfront, and you can use it to fund your practice. These loans have a payoff period of about 12 months, but some can be as long as five years. Having an excellent credit score can make this program even more beneficial, so see where you are financially before applying for this loan.
SBA 7(a) Loans
SBA 7(a) loans are generally for doctors and dentists already established and running a successful practice. Because of this, those who have just graduated may benefit from other loans and programs. It is possible to get up to $5 million with the 7(a) program, and you can use the funds however you see fit. A program like this can help accomplished doctors take their practice to the next level.
Medical practices can be expensive to run and often require special medical equipment to serve patients. If you are interested in starting or upgrading your office, determine what loan type is right for you and your current financial position.