Business Loans For Doctors

Here’s a detailed overview of the top 7 Business Loans and financing options every practice owner should consider before using your own working capital. Clinics  requires quite a lot of capital to start little alone to run. Don’t use your working capital for fixed assets, construction buildout, or for equipment or other purchases that can be financed. Rather than using your line of credit for equipment, why not finance the equipment. Why use your cash for build out, construction costs when you can get term loan instead. Financing can be very useful when done right, but when done incorrectly, it can also hurt your business so. First, determine who your work with who can overall provider a full suite of funding solutions. 

Here are the top 7 business loans types for doctors. It‘s always good to know what your options are and who you can talk to. 

1.   SBA LOANS

Purpose: Small Business Administration-backed loans for various business needs, including working capital, equipment, and real estate.

Features: Longer repayment terms and lower interest rates due to government guarantees. Includes popular programs like 7(a) loans and 504 loans.

Benefits: Harder qualification criteria and favorable terms compared to traditional loans. Must have skin in the game. Need good credit, down payment or additional collateral. 

2.   Equipment Finance Agreement

Purpose: To finance outright any business-related equipment.

Features: Typically secured by the equipment itself, with fixed interest rates and repayment terms that match the useful life of the equipment.

Benefits of equipment finance agreement: Enables businesses to acquire essential machinery and tools without large upfront costs. Unlike Fair Market Value or Dollar Buyout Leases, Equipment Finance Agreement (EFA) doesn’t have any end of term buy out option. You automatically have ownership of the asset upon completion of the agreed term.

3.   Business Line of Credit

Purpose: Provides access to a line of credit that businesses can draw from as needed for various purposes.

Features: Revolving credit, like a credit card, with flexible repayment terms. Interest is paid only on the amount used and time borrowed.

Benefits: Ideal for managing cash flow, covering short-term expenses, or handling emergencies. Peace of mind is priceless for small business owners.

4.   Commercial Loan

Purpose: General-purpose loan for business expenses, often used for real estate, equipment, or expansion.

Features: Can be secured or unsecured, with varying terms and interest rates depending on the lender and business creditworthiness. Long-term low-rate loans.

Benefits: Larger loan amounts with potentially lower interest rates for qualified businesses. Have tight Loan-to-value is in place unlike the other loans that don’t consider collateral.

5.   Business Credit Card

Purpose: To manage everyday business expenses and improve cash flow management.

Features: Revolving credit with a credit limit, rewards programs, and potential for building business credit and personal credit.

Benefits: Convenience, rewards, and short-term financing without needing to secure collateral.

6. Business Term Loan

Purpose: To borrow a term loan to finance specific large projects or investments.

Features: Lump sum disbursement with fixed or variable interest rates and a predetermined repayment schedule. Predictable payments and terms.

Benefits: Offers predictability with fixed payments and is often used for expansions, renovations, or substantial purchases. Use on a per project or venture basis without giving out equity or profit.

7.  Merchant Cash Advance (Future Receivable Sale)

Purpose: Merchant Cash Advance provides a lump sum payment in exchange for a portion of future revenue or credit card sales. Terms can be daily, weekly and short-term. However, you have quick acceshave s fast and renews when it’s paid down.

Features: Repayment is made through a percentage of daily credit card transactions, with no fixed term. Or, fixed daily or weekly with a fixed term. Terms typically are short and approval is based on you’re the last 3 to 4 months of revenue.

Benefits: Fast access to capital and repayment is flexible based on sales volume. Credit not a factor. Industry is not a factor for some lenders. Most can qualify with very little documentations.

Why would you apply here? Well, if you have derogatory credit in the past, you potentially could automatically fall within this category of funding if you have enough revenue. If you don’t have revenue then your option will be limited with prior derogatory, or poor credit. This is for businesses with blemished credit with revenue who can afford the payments. This option will provide access to funding with very little documentation. Yes, it will be the highest interest rate. Compare to not having access to funding would be 0% interest. Or, if you have better alternative of course that’s cheaper, if not, find the best merchant cash advance lender with the lower rate. However, working with Liberty Capital Group, a licensed loan broker will save you money because direct lender will also have salespeople. So, they don’t really have better rates that brokers.