The 4 Best Loan Options for Doctors & Medical Practices
Let's look at the best financing options for healthcare professionals. When you apply for a loan on Clarify, your dedicated financial advisor will guide you throughout the process. Our goal is to provide funding that fits the specific needs of your practice.
1. Term Loans
When you think of business loans, you are primarily thinking of a term loan. A long-term or short-term loan is structured like traditional financing from a bank. You borrow a specific amount of capital at a specified APR. The duration of the loan term can be flexible based on your cash flow needs.
Why choose term loans for a medical practice:
- Fast access to capital
- Approval and funding takes 24-48 hours
- There is no collateral or personal guarantee needed for an unsecured term loan
- Both good and bad credit scores can get approved by a lender
2. Business Line of Credit
If you've ever had a home equity line of credit or used a credit card, you already know the overall structure of a business line of credit. Lenders approve you for a maximum credit line -- which you can withdraw funds from as needs arise. You only pay interest on funds you use from the available credit line.
Why choose line of credit for a medical practice:
- Withdraw funds on-demand as financial needs arise
- Interest is only charged on amounts withdrawn, not the total credit limit.
- Can improve your personal credit score
- There is no pre-payment penalty to pay off a balance sooner
3. Medical Equipment Loans
Medical equipment is the foundation of a successful practice. Aging technology can hamper your ability to provide quality care. Whether you're buying new equipment or paying to repair existing ones, equipment financing can cover up to 100% of the costs. The structure of an equipment loan is similar to a car loan -- the equipment serves as collateral for the financing.
Why choose equipment loans for a medical practice:
- Quick funding -- minimal documentation
- Good credit score is not a requirement as the equipment is used as collateral by the lender
- Competitive interest rates
4. SBA 7(a) Loan
In cases where your working capital needs are further out into the future, an SBA 7(a) loan can provide some of the best interest rates and terms. SBA loans are secured in-part by the Small Business Administration. Your actual loan is through an SBA approved lender. The federal agency provides a guarantee for your loan amount up to 85%.
Why choose SBA 7(a) loans for a medical practice:
- Long payment terms -- loan term length can be 5 to 25 years
- Good interest rates
- SBA guarantees up to 85% of the total loan amount to the lender