Business loans for doctors can also be termed as medical
practice loans which are borrowed by healthcare professionals. These funds are
availed primarily to set up a practice, expand the business, purchase
equipment, or meet operational costs. If a lender’s perspective is concerned,
the medical industry is a promising sector to extend loans in. This is because
it has an exceptionally low default rate.
Due to an ease
of lending, lenders also extend multiple options under medical practice loans.
However, availing the ideal type of fund is more critical than many other
contributing aspects. Thus, the first step towards borrowing funds is to
identify your funding needs. After that, you need to compare the cost of
borrowing, benefits, terms and conditions of different doctor finance options.
7 Different business loans for medical professionals
in 2020
Borrowing the right loan type and the right amount of funds is vital. Borrowing less can pose financial threat to your practice, whereas unnecessarily additional borrowing can lead to debt pile-up. Borrowing the wrong amount of funds is also one of the common financial mistakes which doctors make. Thus, here’s a look at the different business loan options available for doctors.
1. Business lines of credit
Business lines of credit signify revolving fund availability instead of fixed credit. It is different from a usual business loan for doctors. An applicant can get approval for a higher line of credit, yet draw only as much funds as required. It saves the overall interest outgo because only the withdrawn amount is charged with interest accrual.
2. SBA 7(A) loans
These loans are looked after by the SBA or Small Business Administration. SBA is an agency which sets norms and guidelines of underwriting loan approval. Although SBA is not the direct lender of business loans, it guarantees specific lenders up to 75% of the loan amount. These loans come with reduced interest rates but high eligibility requirements.
3. Business term loans
Various NBFCs
provide dedicated business loans to medical professionals. These business loans for
doctors also team up with exclusive benefits and offers.
Such loans for doctors come with a fixed tenure, within which the loan must be repaid in full.
4. Short-term business loans
Short-term credit options are ideal for quick financing needs. They help address the financial emergencies of a limited term, saving you from holding a loan for a long tenure. Borrowing and repaying short-term business loans also helps in building an impressive credit history. The tenure of short-term loans usually ranges between 6 and 18 months.
5. Medical equipment loan
Such forms of doctor finance are directed specifically towards the purchase of medical equipment, machines, tools, and so on. They help medical professionals to maintain their clinics with top-quality equipment and devices. The tenure allowed on these loans are also a lot more flexible than short-term advances.
6. Business credit cards
Business credit cards are one of the most popular modes of financing medical practice expenses. The revolving credit system allows professionals to pay for clinic expenses as well as long-term purchases. The credit limit allowed on business credit cards might be lower than the other loan options though.
7. Medical practice acquisition loans
These loans
are extended by lenders who specialise in evaluating medical practices and
their funds requirements. Here, the lender has complete information of the
medical industry. Loans are extended as per the eligibility and credibility of
a borrower.
Mainstream business loan for doctors can help
raise funding of up to Rs.25 lakh, with lenders like Bajaj Finserv providing
such financing at minimum eligibility needs. As these funds are not
purpose-specific, borrowers can utilise the funds to meet any financial
requirement of their medical practice.
The lender also brings pre-approved offers to render the process of
availing funds faster, easier, and a hassle-free one. These offers are
available on several credit options, which also include personal loans and
business loans. You can check your pre-approved offer by mentioned your name
and mobile number.
Financial planning and arranging reliable sources for funds is a key factor while setting up a new business. It is no different in the case of medical practice. There are some crucial financial planning tips which healthcare professionals can follow to establish and run a successful practice.
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