Key Takeaway Table
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How doctors can utilise business loans
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Doctors who want to start their own practice can apply for business loans. They can use funds for leasing or buying office space, purchasing equipment, training staff, and expanding an existing business. Doctors can also use loans forworking capitaland to cover unexpected costs.
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Types of business loans for doctors
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Doctors can go for traditional term loans, which could be secured or unsecured. Fitout finance is available for flooring, wiring, or any outfitting or renovating of their clinic. Equipment finance supports equipment purchase, andequipment finance linesare available to businesses that have been operating for 2+ years. A business line of credit, like anunsecured overdraft, can support operational expenses.
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Factors to Consider When Applying for Business Loans
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Before applying for any loan, it's crucial to determine your specific borrowing needs. What do you need the loan for, and how soon do you need it? Next, you must be aware of your credit score and any outstanding debt.
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Compare different lenders
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Take a look at various lenders, both traditional and non-traditional, and compare their interest rates and fees, loan terms, loan amount, requirements, and speed of processing.
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Starting a practice is a significant career move for medical professionals. While it is a rewarding step in a doctor’s career, the process can be expensive since it requires a large capital and a constant flow of funds. For many medical professionals, business loans are the key to covering these costs.
How Doctors Can Utilise Business Loans
If you’re a medical professional looking to open your own clinic, here are some expenses that business loans can help with:
- Startup and Renovation: Business loans can support startup costs for leasing or buying a location for your medical practice. Fitout finance is available for renovating or fitting out a premise.
- Medical Equipment: Loans can support you with the funds to buy medical equipment, such as examination tables, diagnostic tools, and other necessary devices. Funds can also be used to set up or upgrade your practice’s tech infrastructure. With the right loan, you can set up an electronic health record system and invest in telehealth tools to meet patients remotely.
- Working Capital: Business loans can provide working capital to cover day-to-day expenses, such as payroll, utilities, and office supplies. You can also use a loan to purchase and maintain your medical supply inventory.
- Staffing and Training: A loan can help support you when there’s a need for growing your team of healthcare professionals and can support the investment of upskilling training programs to build your team’s skills.
- Expansion and Additional Services: Loans can support business expansion, whether it's opening additional locations or diversifying the offering of your existing practice.
Types of Business Loans Available for Doctors
1. Term Loans
Traditional term loans can cover the larger costs of having your own practice. This includes leasing the space, renovating, and expanding the business. Term loans will provide you with a lump sum that you will pay off monthly for the duration of the term.
2. Equipment Financing
Equipment finance can be used for purchasing medical equipment. Under a chattel mortgage the equipment is security for the loan.
3. Fitout Finance
Fitout finance can give you the funds for commercial fitout, which can include your clinic’s furniture, cabinets and shelving, flooring, security systems, as well as building costs and soft costs like electrical and plumbing.
4. Business Lines of Credit
A business line of credit provides business owners access to funds when they need up to a predetermined limit. Limits vary depending on whether you’re seeking funding from a bank or non-bank lender, your time in business, and your revenue size. Non-bank, unsecured overdrafts are available up to limits of $500,000 through no-doc applications. Business lines of credit are useful for daily expenses, managing cash flow gaps, and covering emergencies.
Compare Different Lenders
Once you have determined your borrowing needs and eligibility, it’s time to consider your choices. Take a look at a variety of lenders and compare the following:
Interest Rates and Fees
Compare interest rates offered by different lenders. Even a small difference in interest rates can make a difference to your loan costs over time. Look for competitive rates that align with the current market. It’s important to note that some loans will have higher interest rates due to risk (like unsecured or no-doc loans).
Loan Terms and Amounts
Make sure the loan term matches your circumstances and business cash flow. Shorter terms will generally equate to a lower level of total interest paid in totality; however, accelerated repayment schedules can place undue pressure on future business cash flow.
Application Process
Compare the ease and efficiency of the loan application process of different lenders. Some non-bank lenders can offer quicker processing and approval, which is useful when you need a fast business loan but banks will offer the lowest cost lending with the most amount of features.
Factors to Consider When Applying for Business Loans
Before you apply for any loans, you must identify your borrowing needs and your creditworthiness. Doing so will help you determine which loans you are eligible for and which lenders can provide them for you.
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Borrowing Needs
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What will you use the loan on? Are you starting a business or looking to renovate your current clinic? It’s also important to note the urgency of your needs. Some lenders may approve loans faster depending on the type and amount.
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Credit Score
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One of the primary approval criteria lenders use to assess creditworthiness is your credit score, which is based on your credit history.
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Outstanding Debts
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You should assess your existing debts, including any personal loans, mortgages, tax debt, and credit card balances; all business debts will be used to assess serviceability.
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Find the Right Loans to Start Your Medical Practice
Opening up your own clinic is a fulfilling and exciting part of any doctor’s career. To make this goal a reality, doctors can turn to business loans for funding needs. If you’re looking for loans to finance the startup costs of a lease, invest in your fitout, medical equipment, operational costs, and more, we can point you in the right direction. Talk to a loan expert today.
