Business Loans

The Best Loans for Healthcare Practices In 2020

Jan 15, 2020 • 4 min read
Two female doctors reviewing an x-ray
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      While it’s always important to invest money into improving your practice, any healthcare provider can tell you that there are lots of other areas demanding their attention. For starters, it’s costing more and more to complete medical training. Research shows that 35% of medical students plan to graduate with more than $200,000 in loan debt. And 43% of medical students say their biggest financial concern will be paying off their school debt.

      So it requires a bit of a give and take. Paying down loans is crucial. But if you also put money into your practice, you’ll improve patient loyalty, attract new patients, adapt for seasonal demand, and keep your practice running efficiently. The resulting business growth can bring increased profitability that’ll help you pay off your debt faster.

      So what loans are best for your practice? That depends on whether you plan to use it to start a practice, move to a new location, hire staff, or purchase new equipment. As a rule of thumb, three of the most relevant loan types are equipment financing, accounts receivable financing, and a line of credit.

      The good news is that most lenders consider medical practice loans to be a safe bet, which immediately tilts the odds in your favor. Not only will they be more willing to work with you, but the loan’s terms will often be more favorable. See, all that medical training is already paying off!

      Now that you have some context, here’s a handful of the best loan options for your medical practice:

      Equipment financing

      This type of financing helps you quickly get capital for medical equipment, computers, vehicles, and a host of other things you need to carry out your day-to-day activities. Plus, the equipment you purchase will serve as collateral on the loan, which can potentially eliminate the need for a down payment.

      It’s worth noting that equipment financing is one of the easiest types of loans to obtain. Often, you’ll get the money is as little as 48 hours. Your interest rate and maximum loan amount will depend on the cost of the equipment, as well as your credit score and business history.

      Business credit card

      For smaller equipment purchases, you should consider a business credit card. Your card will provide easy access to cash whenever you need it, and at the same time, you’ll be able to build your credit and leverage a card reward program as well.

      Business credit cards are ideal for those who have had trouble obtaining loans in the past. As long as you’ve got a credit score above 680 and have some business history, you should stand a good chance of getting approved. The maximum amount usually goes up to about $500,000, making it ideal for medium to small needs.

      Line of credit

      Another option for smaller equipment purchases is a line of credit. Similar to a business credit card, you can use a line of credit as a revolving form of financing that provides cash whenever you need it. Prime examples include covering expenses while you’re waiting for bills to be paid or helping you get through business slowdowns.

      A line of credit can be optimal for less-established practices, as your business history is less scrutinized. And bad credit is often tolerated, though these factors will have an effect on the interest rate.

      Accounts receivables financing

      The average small business in America is owed $84,000 in unpaid invoices, but your outstanding invoices can actually be leveraged to get working capital through accounts receivables financing. These loans provide a cash advance (in just a day or two) worth about 85% of your unpaid invoices. Most of the remaining amount on the invoice will be paid to you when the patient pays up, minus the fees.

      It should be pointed out that the fees on accounts receivable financing are often higher than traditional financing, so be aware that you’ll pay a premium for the convenience. Applying won’t take long, as you’ll just need the usual documents like bank statements, credit score, business tax returns, a voided business check, and documentation for your outstanding invoices.

      SBA 7(a) loan

      These loans are partially guaranteed by the U.S. Small Business Administration. That means lenders are more anxious to work with you and will offer more favorable rates. On top of that, because medical practices are considered safe borrowers, you’ll get access to some of the best options available.

      About the author
      Grant Olsen

      Grant Olsen is a writer specializing in small business loans, leadership skills, and growth strategies. He is a contributing writer for KSL 5 TV, where his articles have generated more than 6 million page views, and has been featured on and Grant is also the author of the book "Rhino Trouble." He has a B.A. in English from Brigham Young University.

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