Medical Business Financing up to $600,000
Applying for healthcare business loans is a big task. We’ve helped many healthcare businesses succeed. We are able to approve up to $600,000 within 24 hours. Start now with no impact on your credit score and no fees!
It’s uncommon for medical businesses to have enough money to expand and grow on their own. It’s common for healthcare business owners to apply for medical business loans to get the capital needed to grow.
It can feel overwhelming to navigate healthcare loans and funding. So, here’s a breakdown of how these medical business loans work and the types of financing available.
What Are Healthcare Business Loans?
Healthcare business loans are financial products created specifically for healthcare businesses. The healthcare business owner and the lender will work together to come up with loan terms. They will negotiate the interest rate, terms and the repayment schedule.
Healthcare business owners can use medical practice loans as a capital investment to grow their practices by purchasing necessary equipment and hiring personnel. In theory, the healthcare business should grow substantially and acquire more clients and patients to make paying off the loan and its interest easier as its income revenue expands.
What Can You Use Healthcare Business Loans For?
The majority of borrowers use healthcare loans to purchase equipment and to open new office locations. However, funds are often used for working capital and to pay for day to day expenses.
This means that the money can be used for things like marking and improving the healthcare website.
Types of Funding for Healthcare Businesses
There are several types of funding sources for healthcare businesses:
- Equipment Loans
- Small Business Loans
- Merchant Cash Advances
- Business Lines of Credit
- SBA Loans
Equipment loans are common and often necessary in the healthcare business world. New equipment can help patients feel more at ease and also looks more professional.
Due to the high cost of equipment, many healthcare business owners turn to equipment financing to get the equipment they need. Financing can be secured for almost all types of medical equipment. This includes hospital beds, EKG and EGG machines, and medical imaging equipment. Equipment loans can often be approved with credit scores as low as 550 because the equipment being financed is used as collateral.
When banks typically lend to healthcare businesses they require collateral or personal guarantees. Some banks offer loans for doctors that take into consideration factors like student debt. Each lender has its own credit requirements, but credit scores of at least 620-640 are often preferred.
MCAs, or merchant cash advance, differ from traditional small business loans. Rather than paying off a loan, an MCA agreement gives you money upfront and then receives repayment from future sales that a business makes.
The money gets paid off by either credit card sales or fixed daily withdrawals from the business’ monthly revenue. MCAs work great for many medical practices because patients will pay off bills with their credit cards.
A business line of credit differs from a traditional small business loan because it works more like a credit card. Instead of receiving a lump sum, businesses have access to a certain amount of credit that they can use, then pay off, and then use again.
Business lines of credit work well with healthcare businesses that need quick cash for short-term needs. For example, they’re a good option for paying off urgent repairs on medical equipment, restocking inventory, and funding marketing campaigns.
Lastly, SBA loans are loans offered by the US Small Business Administration. They appeal to doctors because they often have the lowest rates with the longest terms. The loan amounts are rather large as well, and qualifying practices can loan up to $5 million.
While SBA loans are often favorable, they have an extensive application process and requires a lot of paperwork and documentation. So, they’re usually fitting for well-established practices.
Tips for Qualifying for a Healthcare Business Loan
Lenders look for healthcare businesses with strong credibility. They often look at the potential borrower’s income, business revenue, cash flow, and current debt. Professional credentials and collateral will also help boost the likelihood of receiving a loan.
The majority of traditional lenders prefer to lend to medical businesses that have been in operation for at least two years. It will be important to show strong financial projections to increase your chances of receiving funding.
Most lenders do not want to fund younger businesses. It’s not impossible to get funding, but you will have to work harder to convince the lender.
Therefore, borrowers should have a detailed business plan with realistic projected profits. If your practice is open, list any existing equipment that you might be able to use as collateral.
You’ll also need bank statements, your personal and business tax returns, and annual business revenue reports.
Last but not least, research which lenders will accept your application. SBA lenders, for instance, prefer well-established medical practices. You’re most likely to succeed in securing a medical cash advance or a business line of credit if you need quick cash.
How to Apply for the Best Healthcare Business Financing
Eligibility Requirements
To be approved by MCashAdvance™, you must meet the following requirements:
- U.S. citizen or legal resident
- 18 years of age or older
- Your business must be at least six months old
- You must have a credit score of 500 or higher
Funding Limits
Funding amounts vary based on your business’s financial health and history, but its possible to receive up to $600K.
Term Length
Depending on how much business you do and what you get funded for, a repayment period will be set.
What Are the Advantages and Disadvantages of a Healthcare Loan?
Not every business will benefit from healthcare loans. They have advantages and disadvantages. Before applying for a loan, consider these factors.
Healthcare Loan Pros
Healthcare loans often have loan options to fit your healthcare business’s needs. For example, some loans help cover medical equipment and inventory costs, while others help pay staff income. Other options, such as MCAs, can better fit businesses with low credit scores.
Healthcare loans are also helpful when you need access to large amounts of capital. Some lenders can offer between $500,000 to $5 million. A healthcare business usually needs to show lenders that it can repay a large loan with revenue of at least $350,000.
Healthcare business loans can have lower interest rates than personal loans if you provide loan collateral.
Healthcare Loan Cons
One of the disadvantages of healthcare loans is the long list of prerequisites to qualify. As we’ve mentioned earlier, lenders often request extensive business documentation to ensure that you can repay your loan.
Credit history also affects healthcare loan rates. Your healthcare business needs a steady cash flow and a healthy personal credit score.
It’s also difficult for new healthcare practices to get funding. Lenders prefer established practices . Lenders want to invest in healthy companies with a proven track record of success.
Healthcare businesses have a higher survival rate than businesses in other industries when it comes to start-up loans. Despite this, a SBA survey of healthcare business loans shows that about half of small businesses fail within the first five years.
So, if you apply for a healthcare loan, be prepared for putting up collateral. Quite a few lenders won’t offer loans to healthcare businesses with bad credit or no collateral due to the risks involved.
Frequently Asked Questions About Healthcare Business Loans
Business loans for medical professionals can be used for just about anything related to your business. Long-term expenses and medical equipment can be covered by some loans. Others can pay for payroll and urgent costs, like restocking essential medical supplies.
Funds are approved based on several factors, including the type of loan, the business’ credentials, and the loan amount. Some lenders approve loans within a day, while others may take weeks. SBA loans, for example, can take up to 90 days to process.
If you’re looking for fast funding, MCAs and business lines of credit are often the quickest options.
The purpose of healthcare small business loans is to grow your business, so borrowers should use them to expand their businesses.
As soon as a loan application is approved, the funds are transferred to the business’ bank account. What the funds are being used for are seldom monitored after that.
If the loan money goes into a business account, the IRS can see if you used the funds for personal reasons. Paying back personal loans with business loans can get you into legal trouble.
The answer is yes in some cases, you do not need collateral for a loan. For example, the SBA 7(a) program offers loans without collateral up to $25,000. Merchant cash advances and business lines of credit are also available without collateral.
The majority of healthcare practice loans are used by physicians and healthcare specialists. They can be used to expand a business, acquire another practice, or start a new one.
Funding Your Business Is Our Business
Healthcare Business Loans May Help Grow Your Business
Healthcare business loans are often necessary to help your business grow. The best way to benefit from these loans is to determine which one is the most applicable to your situation. Applying for the correct type of funding can provide the support that your business needs to thrive.
Does Your Business Need Funding Today?
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$5,000 – $1,000,000
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