Key Takeaways
- Many lenders think doctors are low-risk borrowers. So, they can get a lot of different types of loans with low interest rates, flexible terms, and high loan amounts to help with both personal and business needs.
- Doctors may need loans to buy commercial property, buy equipment, get working capital, pay off debt, further their education, and more.
- Medical business loans are flexible loans that can be used for many business costs, such as hiring staff, marketing, and unforeseen expenses.
- Doctors who want to buy, grow, or fix up a medical practice should get medical practice loans.
- Medical equipment loans are for buying or renting medical equipment and helping doctors keep up with the latest technology without using up all their working capital.
- Doctors can get personal loans to pay for things like home improvements, debt consolidation, continuing education, or other personal expenses.
- As a medical professional, think about what you need and compare lenders carefully before signing a loan.
Doctors have unique financial needs, whether they are opening a new practice, expanding an existing one, or buying new equipment. Fortunately, healthcare professionals can choose from a number of different financing options that are made just for them. If you know what these types of loans are, you can get the right kind of funding for your medical business or personal financial goals.
Let’s look into the different types of loans that doctors can get, such as loans for medical businesses, medical equipment, and more.
Why Doctors Need Financing
Doctors often need funding for a lot of different things, both for work and for their own needs. Some of the most common reasons are:
- Starting a New Practice: Setting up a new medical practice costs a lot of money up front, like renting office space, buying equipment, and hiring staff. Financing helps pay for these first costs.
- Expanding or Renovating a Practice: When a doctor’s practice grows, they may need more space, better technology, or better facilities, which all cost a lot of money.
- Buying Medical Equipment: Medical equipment like diagnostic machines, surgical tools, or patient management software can be costly. Doctors can use equipment loans to buy these things without running out of cash.
- Acquiring a Practice: Many doctors buy existing practices or partner with other healthcare providers. This usually means they need money to pay for the costs of the acquisition.
- Needs for Working Capital: Running a medical practice means paying for things like payroll, utilities, and supplies on a regular basis. Financing helps keep cash flow steady, especially when income isn’t steady.
- Debt Consolidation: Doctors can better manage their money by taking out loans with lower interest rates to pay off both personal and business debts.
- Continuing Education or Certifications: Doctors often need to keep learning in order to stay up to date in their field. Financing helps pay for classes, certifications, or going to professional conferences.
Types of Loans for Doctors
Doctors in Australia can access a number of loans to address their needs, whether for their practice or for personal purposes. Here are the most common ones:
1. Medical Business Loans
Medical professionals can look into general business loans to meet any needs their medical business may have. These loans can help pay for things like hiring, marketing, buying inventory, and more.
Types of Business Loans for Doctors:
- Secured Business Loans: Doctors can choose secured loan options for any business need. A secured loan is a good option if you need funding for the long term and have valuable assets to use as security. This is best for big costs, like growing a business.
- Unsecured Business Loans: Unsecured business loans are a good option if you need funding quickly and don’t have many requirements. These loans are for the short term and can be approved in as little as 24 hours.
- Business Line of Credit: Doctors can use a renewing line of credit to help them run their businesses on a day-to-day basis, such as paying for payroll, utilities, emergencies, and more. You can always draw from a line of credit up to a certain amount. The limit goes back to normal when you pay it back. You don’t have to pay interest on the whole limit; just the interest on the amount you borrowed.
2. Medical Practice Loans
If you know exactly what you need to start or grow a medical practice, you can get loans that meet those needs. Doctors can get or improve their practice with little trouble with medical practice loans.
Why Opt for a Medical Practice Loan?
Whether you’re buying into an existing practice or establishing your own, the upfront costs can be quite large. Medical practice loans are tailored to help doctors cover costs like:
- Purchasing Property: If you’re starting from scratch, the cost of a commercial or office space can be your biggest expense. The right loan can cover this cost.
- Acquiring an Existing Practice: If you’re buying an existing practice, it requires significant capital to do so. Medical practice loans can cover the purchase price.
- Renovations and upgrades: If your practice needs modernisation or expansion, these loans provide the necessary funding.
Common Types of Loans for Acquiring and Upgrading a Medical Practice
- Commercial Property Loans: Doctors and other medical professionals can get commercial property loans to buy space for their practice. You can use these loans to buy or build a business space.
- Fitout Finance: These are loans tailored specifically for the improvement of a space’s interiors, including electrical, plumbing, lighting, structural, and interior design.
Technology drives the medical field, and keeping up with new developments can be costly. That’s where loans for medical equipment come in. These loans help doctors buy or lease medical equipment without using up all of their working capital.
What Is Equipment Finance?
The purpose of equipment loans is to help businesses buy equipment. This kind of financing is used by healthcare professionals to buy high-tech medical equipment and technology. These loans let doctors pay for expensive machines, diagnostic tools, or even general practice equipment over time.
Benefits of Medical Equipment Loans
- Get Immediate Access to Equipment: With equipment finance, doctors can get medical equipment immediately, allowing them to provide better patient services sooner.
- Preserve Working Capital: Instead of paying for equipment upfront, you can spread the cost over a fixed period.
- Access to Cutting-Edge Technology: Stay competitive by ensuring your practice has the latest tools and technology.
- Leasing options available: Some lenders also offer leasing alternatives, allowing you to upgrade equipment more frequently.
Types of Equipment You Can Finance
With a medical equipment loan, you can finance almost any equipment that helps you serve your patients better, including:
- Diagnostic machines
- Surgical equipment
- Computers and software for patient management
- Exam tables, sterilisation equipment, etc.
Types of Medical Equipment Financing
- Chattel Mortgage: The borrower owns the medical equipment from purchase, with the equipment serving as loan security.
- Finance Lease: The lender owns the equipment, leasing it to the business with the option to buy, extend, or return it at the end of the lease term.
- Operating Lease: A shorter-term lease where the business can’t buy the equipment at the end, ideal for frequently upgrading technology in the medical field.
- Hire Purchase: The business rents the equipment with the intent to own it after making all payments, often with a final balloon payment to lower monthly costs.
4. Personal Loan for Doctors
Doctors are often seen as low-risk borrowers because they have a lot of earnings and have stable jobs. Personal loans are a simple way to get money for things like paying off debt, managing personal expenses, or making an investment.
Why Doctors Opt for Personal Loans
- Debt Consolidation: Personal loans can be used to consolidate various types of personal debt, often at a lower interest rate than credit cards.
- Further Education: Some doctors take out personal loans to pay for continuing education or certifications.
- Other Personal Costs: Doctors can use personal loans for any acceptable purpose, including investments, home renovations, leisure, and travel.
Choosing the Right Loan for You
How do you choose the right loan when there are so many to choose from? The best loan for your business will depend on your needs and your financial situation. Here are some important things to think about:
Loan Amount and Purpose
Think about how much money you need to borrow and why. A medical equipment loan might be the best choice if you need to buy a lot of medical equipment. An unsecured loan or a business line of credit might be a better choice for more general business needs.
Interest Rate
Look at the interest rates of different lenders. Doctors often get lower rates, but it’s important to compare prices to make sure you’re getting the best deal.
Repayment Terms
Check the loan’s repayment terms to make sure they fit with your practice’s cash flow. Longer repayment terms can lower your monthly payments, but they may also raise the total amount of interest you pay over the life of the loan.
Security Requirements
Find out if the loan needs security. The equipment you buy is usually what secures an equipment loan.
In Summary
Doctors who want to grow their practices or reach their personal financial goals need to be able to get financing. There are many types of loans that are specifically designed for doctors, such as medical business loans, medical equipment loans, and personal loans.
Doctors can make smart choices that will help their careers and finances by learning about the different types of loans that are made just for them.
Get Financing with Dark Horse Financial
As lending experts, we are your partner in bringing your practice to success. If you need any type of financing for your medical business or your personal goals, we’ll help you every step of the way, from looking for lenders to settlement and beyond.
