Are you considering physician loans to help establish or build your practice? Perhaps you’ve heard about these types of lending from colleagues in the profession but aren’t quite sure what they can be used for. Or you have a few ideas about how to use the cash but don’t know what the application process involves. In this article, we’ll walk you through all of the essential information so you know exactly how a physician loan can help you build a successful practice.
What Is a Physician Loan?
A physician loan is a specialist form of lending available to doctors and similar medical professionals. In the past, newly qualified physicians often found it difficult to obtain loans and mortgages. This was partly because they did not have much work history since they were only starting out in their career. But it was also due to the significant loan debt that medical students accumulate over the course of their training. The combination of these two factors often meant that physicians were unable to access traditional banking products.
The introduction of physician loans has enabled more trainee doctors and newly qualified medical professionals to secure funding. Lenders have developed dedicated loan offerings that are designed to meet the specific needs of people in these roles. Although they may involve a greater perceived risk on the part of the financial institution, there is also a large potential gain. Once physicians have gained more experience and paid off their loans, they often enjoy stable employment and high salaries which then make them low-risk customers. By supporting physicians in their early career, lenders hope to win their loyalty in the future.
Although popular with newly qualified physicians, these types of loan are also available to doctors with established practices. They can be used to support a growing medical business, purchase new equipment or fund expansion into other geographic areas. If you already run your own medical practice, then a physician loan can also help with cash flow while you wait for insurance invoices to be paid.
How Physician Loans Can Help You Build Your Practice
Building up a medical practice can be a stressful and demanding task. After years of training to become qualified, it may feel daunting to pursue your own business venture. A physician loan can help to take the stress out of the financial side so that you can focus on delivering high-quality patient care. Here are a few ways that physician loans can help you to build your practice.
#1 – Improving Cash Flow
Cash flow can be a challenge for every type of business and medical practices are no exception. There’s often a significant delay between your costs of delivering treatment and the payments by insurance companies. Salaries, equipment, and medications all need to be paid promptly yet insurance invoices can take months to be processed. This is an area where securing a physician loan can help. The funds will help to tide you over the interim period until you receive payment.
#2 – Purchasing New Medical Equipment
New innovations are constantly being made in medicine so it’s important to have the latest equipment in your facility. It can help you deliver the best possible care to your patients and be a point of difference from surrounding practices. But medical equipment is often complex and expensive which can make it difficult to afford for some. However, a physician loan can enable you to purchase new equipment without delay and enable your patients to benefit immediately.
#3 – Expansion or Remodelling of Facilities
Over time you may find yourself needing to extend existing premises to accommodate additional patients. You may want to expand into new neighborhoods, districts, or even other cities. Although this can generate increased revenue, it also involves upfront costs. Securing a physician loan can enable you to take advantage of these types of opportunity and scale your operations quickly.
#4 – Attracting & Retaining Patients
Most businesses can’t survive on word of mouth alone. They need to invest in marketing to attract new patients and retain existing ones. Taking out a physician loan can allow you to pay for a new website, online booking system, or digital advertising. It can enable you to enhance the services you offer and boost patient satisfaction so that they provide more referrals and you gain more business.
How Do Physician Loans Work?
Securing a physician loan can work slightly differently to standard business loans. Typically, there isn’t a need for personal collateral to be included as a guarantee. This means that this type of loan won’t appear on your credit report or affect your credit history. You won’t need to sign your house or car to qualify for a physician loan which is a big differentiator from many other types of loan.
There are a few other criteria that make physician loans a relatively unique borrowing option
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- Created specifically for doctors, dentists, and veterinarians.
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- Accept an employment contract as evidence of future earnings (as opposed to pay stubs or W-2s like other types of loan).
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- Require a very small deposit down payment ranging from 0-5%.
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- Disregard student loan payments when calculating debt-to-income ratio.
- Private mortgage insurance isn’t usually required (even on small down payments).
How Much Could I Borrow?
Physician loan amounts can range from $20,000 up to $500,000 with repayment terms of up to 10 years. Interest rates can be marginally higher than conventional loan rates due to the increased risk perceived by traditional lending institutions. However, our physician loans offer much more competitive rates so that you get the best deal for your medical business.
Capital Collab has provided bespoke funding to medical and dental practices across the USA. Our team understands the challenges and nuances of the healthcare industry so we can tailor our financial solutions to meet your unique needs. Whether you’re looking to improve cash flow, purchase new equipment, expand your services, or attract new patients, our funding can make it happen. You may be eligible to receive between $5,000 to $2,000,000 in as little as 48 hours!
How We Can Help
Capital Collab offers numerous small business loan options that support medical and dental practices across the USA. We don’t require capital which means that your personal and business assets aren’t part of the equation. If you’re in need of short-term financing, then we can help. Whether it’s to pay for emergency repairs to your equipment or investing in expansion we offer small business loans without the need for collateral. Best of all, you’ll benefit from competitive repayment terms and low interest rates, so you have more money to reinvest in patient care.
Transparency, innovation, and expertise are the driving factors behind everything we do. With a talented team of advisors, a plethora of funding partners, and the best technology available -we go above and beyond to help our clients receive their capital rapidly with the industry’s most competitive repayment options and interest rates. We want to break speed records, not bank accounts.
Upon submitting your application, it’s reviewed by a dedicated Capital Advisor. We generate the best rates and terms at lightning speed through our funding matrix and robust lender network. Yep… it’s that simple. Learn more about our small business loans here.
Checking for pre-approval will not affect your credit score.
