2014 Medical Business Loan Guide and Tips

Click the image for our medical factoring program. Clients that exceed $500,000 in accounts receivable may qualify for our asset based receivable financing program
Click the image for our medical factoring program.
Clients that exceed $500,000 in accounts receivable may qualify for our asset based receivable financing program

Like any other business, starting a medical clinic of your own will require startup capital. This may seem problematic at first, since you need to file a lot of paperwork beforehand. It may also seem like applying for a 2014 medical business loan can be very tedious too. However, applying for loan to start your own clinic can actually be easier than for other types of businesses, since offices and clinics of medical doctors are among the types of businesses which enjoy a very high success rate after 5 years.

Here are some tips to keep in mind:

  • Make sure you have a stellar credit history. That means you should make sure that you always pay your credit card bills and car loans promptly. It’s also nice if you don’t have any other significant debts, such as student loan debts. A bad credit history may indicate to banks that you are a poor choice on which to invest their money.
  • Go to different banks at the same time. You should file a loan application to at least 3 banks. You are essentially shopping for a high-cost product (capital) and so you want to do your due diligence and see which lender offers the best terms. Applying for a bank loan also takes weeks and even months, so you should do it simultaneously instead of applying to banks one at a time.
  • Make sure that you follow the application procedures properly. Keep track of deadlines for form submissions, and stick to the truth when putting down your financial details. Basically, you want to demonstrate more assets than your liabilities, such as student loans and a mortgage.
  • You’ll want to see which ones offer the best rates. The usual rates are at about 2 to 3 points above the prime rate. You’ll also want to know which banks can get you the full amount of money you need. Another aspect you need to check out is the term of the loan, which usually goes from 5 to ten years. Five years may be too short a term, because the loan payments per month will be higher. But ten years may also not be ideal because they tend to carry higher interest rates. That means that you will pay more money in total for the loan. In general the best term is about 7 years. The interest rate will be tolerable yet the payment scheme won’t be too high.
  • In general, loan payments consist of interest payments and payments toward the principal. See if you can get a reasonable period when you pay only the interest initially. That’s because you are still building up your patient list, and there’s a delay on when you’ll get your payments from the insurance companies. By paying for the interest only at first, you should have enough working capital to cover your operational expenses.

Starting your own clinic is a great, perhaps even sacred, profession. But it is still a business. Make sure that you spend your 2014 medical business loan wisely!