Loans For Healthcare Professionals

Medical businesses require substantial capital to aid in their creation and continued expansion. Loans are one way to obtain the necessary funds for your practice, but they are not without risks and obligations. MÉDICALOI is well-versed in the unique financing demands of healthcare businesses. Our firm can provide comprehensive loan guidance and review together with your financial advisors to help you procure the funds you need to successfully build the business of your dreams.

How Does Your Corporate Structure Affect Your Financing Needs?

When creating a budget for your business, it is essential to consider the organizational structure of your enterprise alongside your short and long-term goals. A partnership or sole proprietorship may have fewer financing options than a corporation, but operational costs may also be lower. An experienced loan lawyer will begin their evaluation of your situation by examining your overall financial circumstances. They will assist you in optimizing your structure prior to seeking funding to ensure you are only taking on loans that align with your business needs and objectives.

Why Is a Solid Business Plan Key to Obtaining a Loan?

Creating a detailed business plan is crucial for healthcare professionals seeking funding for their practice. By defining the requirements of your business, you can more accurately calculate the loan amount necessary to move forward and assess your ability to repay it. Additionally, your business plan is often indispensable in demonstrating to your desired financing sources that your business is a worthwhile investment and does not pose a high risk.
Your lawyer or financial advisor can help you gather the necessary information required by the financial institution, such as the annual financial statements of your corporation, anticipated working capital for the next 12 months, planned investments, and current debts and future assets. A thorough analysis of the market trends for nearby competitors may also provide helpful information on your anticipated income.

What Type of Financing Is Available To Healthcare Professionals For Their Corporations?

Determining the right funding source for your business is a highly personalized process. You must evaluate not only your financial circumstances but also your willingness and ability to accept risk. Repaying a business loan is a significant obligation for established business operations. By carefully assessing the options presented for financing, you can ensure you fully understand the opportunities and challenges inherent in your choices. Whether you ultimately choose to work with a major lender, Canada’s Small Business Financing Program, or seek out alternative funding sources, it is crucial to pay minute attention to the terms and conditions of the loan. That being said, various types of loans exist that can help you meet the unique financial requirements of your business.

Equipment Loans

Physicians, dentists, veterinarians, and other medical providers often require specialized and costly equipment to provide high-quality care to their clients. By contracting an equipment loan, you can finance the purchase of medical tools, instruments, and software to keep your operation running. Equipment loans are typically secured by a movable hypothec on the equipment in favour of the lender. However, the loans may have high interest rates, so it is vital to do your research prior to your purchase.

Short-Term Loans

This type of loan may be best suited to your medical businesses that need an immediate influx of cash due to shortfalls or unexpected expenses. The repayment terms are much shorter than fixed-term loans, often lasting three months to three years. While this time frame allows less time for interest to accrue, it also leads to high monthly payments.

Fixed-Term Loans

Fixed-term loans are often used when a healthcare business requires significant funds to pay for capital expenses or purchase long-term assets. The repayment schedule is spread across a longer span of time, allowing for you to budget. However, it may be challenging for some business owners to qualify as the lender will closely inspect their credit profile and total debt service ratio (TDSR). Additionally, many fixed-term loans are secured, meaning you risk losing the assets offered as collateral should the corporation reach a state where it is no longer capable of paying its liabilities.

Lines of Credit

Business lines of credit can provide flexible capital to medical professionals by allowing them to borrow up to a set limit and repay the borrowed amount over a variable repayment term. They are also referred to as revolving lines of credit because a business may be able to utilize the available funds and pay the loans off multiple times over the draw period. When used properly, this financial tool can help businesses bridge gaps in cash flow and grow their practice.

Invoice Factoring

Healthcare businesses often experience delays in receiving payments from private insurers, which may lead to financial difficulties. By selling your unpaid invoices to an invoice factoring company, your business may be able to immediately receive an advance of 80% to 90% of the invoice’s value. The remainder of the invoice, minus any fees charged by the company, is paid when the insurer completes their payment to the factoring company.

The Importance Of Consulting An Attorney Prior To Contracting A Loan For Your Corporation

While often necessary to cover the expenses related to starting a medical business, a business loan is a substantial commitment that should not be undertaken lightly. Medical business funding should be considered as part of an integrated plan calculated for the success of your endeavor. MÉDICALOI provides tailored legal advice for healthcare professionals at all stages of their careers. Our firm has access to the services of skilled financial and tax advisors who will collaborate to ensure that your decisions today will support your goals for the future. To begin exploring financing options for your business, contact our law firm today and schedule a consulation: (438) 805-5515.