The Best Kinds of Financing for Pediatric and Medical Offices
Pediatric medical practices have the potential to be highly lucrative and successful. As an industry, pediatrics is growing and expected to continue growing, primarily due to increasing domestic birth rates. Growth and stability is encouraging for investors, and a few types of health care financing can help practices to grow or fund their businesses.
In a medical office, pediatric or otherwise, there are numerous areas which may be improved by securing financing. Medical offices are almost always in need of up-to-date equipment, which could range from laboratory technology to basic materials like stethoscopes and thermometers. In a pediatrician’s office, toys and other trinkets for the waiting room or to give away are equally important. Primary in importance to medical offices in general is software, mandated by the federal government and often tremendously expensive. In these instances, it’s important to understand how financing may help. Health care financing can also help cover costs for marketing, research, social media platforms and any renovations needed to the office space.
Types of financing available to practices are variable and may be determined by the health of the business or matter at hand. Traditionally, a practice would first approach a bank to discuss term financing or a line of credit. In either instance, interest rates would be dependent on the state of the business and the owner’s credit. Rates could range from 5 to 20 percent, and financing could be drawn out as far as 30 years. Alternately, practices may turn to the Small Business Administration (SBA) for health care financing. While an SBA loan would be functionally similar to a traditional bank loan, the SBA guarantees the loan rather than the lender seeking forms of collateral to secure the loan.
If a practice’s owner has bad credit or the business isn’t sufficiently lucrative, financing can be sought through non-traditional methods. Some lenders may be able to offer approval more quickly or approve with poorer credit with a higher interest rate. The business owner may also seek a cash advance against his or her own business. The cash advance borrows against projected future receivables and may be an option for an owner with poor credit.
Every business owner hopes for nothing but prosperity for his or her business. However, pediatricians and other medical practice owners may find it necessary to seek out health care financing for various reasons. By understanding the available options, the owner may better find the financing solution best suited to fit the needs of the business.