For a Medical Practice Loan, Small Business Loans Depot offers a niche Medical Practice Loan based on equity in business assets such as equipment assets or on the Sales of the practice. Every practice has Sales and Equipment. Do you know you can go to our features and benefits section and find a highly experienced consultant by clicking on our contact us link? You will understand and easily learn how the 2 programs, a loan against equipment and loan based on your sales are easy methods to improve your cash flow.
For this leaseback Medical Practice Loan, physicians use equity in their existing equipment, such as X-Ray equipment, Monitoring equipment, Patient tables and chairs, Scanning equipment, as well as Dental equipment, or Chiropractic equipment in a refinance for an urban or rural Medical Practice Loan.
- This product will allow you to raise from $10,000 to $100,000 quickly and easily for any reason, such Cash Flow, Expansions, Marketing, Inventory, Taxes, Employees, or equipment with flexible credit requirements. Total funding which can be obtained is usually in the $15,000 to $250,000 range.
- Equipment condition and age is considered. The most valuable and newest equipment should be listed first on the application. Depending upon type, older equipment with full depreciation may be eligible for the program.
- Tough transactions done routinely.
- Application is fast and easy with a quick funding process. Generally only a one page app.
- No upfront or application fee.
- Your request is handled by an experienced consultants with over 25 years experience in credit and funding business loans.
Complete the “Application” or “Contact Us” Mini App on the menu above, or call Toll Free: 855-787-1113. Your call is free and our commercial representatives will provide detailed information on features.
A significant tax savings will can be realized in this Medical Practice Loan against equipment, by being arranged in part as a lease. This allows for a significant tax savings over a traditional loan. The borrower obtains working capital for their business via the equity in their equipment as opposed to having full ownership in their equipment.
Our Medical Practice Loan allows the practice to use both Medical and Computer equipment, which increases funding amounts. Up to 80% of the value can be obtained. Further Medical equipment that can be used in this asset based Medical Practice Loan includes X-Ray equipment, Diagnostic equipment, Imaging machines, Ultrasound, MRI machines, PET and CT Scanners, Infusion pumps, Medical monitors, and blood testing equipment. Dental equipment such as delivery stations and cavitrons. Computer equipment includes Desktops, Servers, Practice Software and Servers.
Your Practice makes money by using equipment rather than owning it. This Medical Practice Loan takes the unused and unutilized equity out of equipment and uses it instead for cash flow.
The one page app and equipment list is submitted by Fax to Fax: 919-882-8541, or E-Mailed to firstname.lastname@example.org. Processing time is one to three days. After approval, time for funding is approximately one to three days.
If more funding is needed, additional funding can be arranged with additional funding “Parts” or “Segments”. Total funding that can be obtained is typically in the $150,000 to $250,000 range.
Apply today, call Toll Free: 855-787-1113, get the equity out of your equipment, and put some cash flow into your business.
Due to constant advances in the Medical field, Medical equipment equipment depreciates quickly. Many types of Medical equipment becomes totally obsolete in a short amount of time. However, Small Business Loans Depot can utilize Medical Equipment that has undergone full depreciation and is several years old.
The practice may have additional financing and working capital needs after the equipment refinance product is completed. Other available programs include:
Gross Sales Cash flow loan – This financing product may be very desirable for Medical Practices as it is based on the Gross Sales and cash flow of the practice. Medical practices often have significant cash flow, so this product can provide significant Working Capital to the practice.
This Medical practice loan product is used, in effect as a line of credit. The practice provides the most recent 3 months business checking account statements and a one page application. The average daily collected balance, the amount and number of deposits per month, beginning balances, and ending balances are reviewed in order to determine the approved amount.
The customer sends in the 3 months business checking account statements and one page application. Upon approval, the customer is E-Mailed documents. The customer completes the documents and faxes them back in. A final landlord check and verbal verification is completed. Funds are wired into the customer’s account within 1-3 business days.
Repayment terms on this Medical Practice loan range from 3 to 18 months. Once the customer satisfactorily repays the line, the line size is increased. The customer is not obligated to use the available line. They can reuse the line immediately or leave it idle for any amount of time.
If the customer provides the last 1 or 2 years tax returns and they are strong, the initial line size can be greater and future line increases can be more as well.
Sample Asset based Equipment refinance transaction:
Primary Care Physician PCP, Dr. Smith, in Lexington, Kentucky, 6 Years in business, 650 credit score with a Dun & Bradstreet Paydex Score = 65. Dr. Smith provides One page application and his equipment list.
Upon approval in 2-3 days, Documents are E-Mailed to Dr. Smith. Dr. Smith completes and overnights original docs back. A final verbal confirmation takes place within a day. In most cases there is no site inspection. Funding occurs in 2-3 business days.
In most cases, Financials and Bank Statements are not required. However, if the customer’s Financials or Bank Statements are strong, the customer can opt to provide to strengthen their application. If the customer has a strong credit bureau score of over 700 or over 725, financials may not be requested. Although there is a certain dollar amount above which financials are requested for this form of financing, there is often some discretion used by the lender. If the customer has a credit score of 750, then the lender may consider an extra $10K or $20K without requesting financials for a medical practice loan compared to a customer with a 675 credit score.
The lender has guidelines that they follow but they do have the authority to stray from the guidelines to a degree if they can justify it.
The following video provides an overview of the medical practice loan program as well, including features and benefits.
Frequently asked questions:
Question: What is the maximum we should apply for?
Answer: That depends on a few factors, but in general, a good rule is to
apply for not much more than the minimum amount that you need. If your
business needs between $50,000 and $100,000, then do not apply for
$100,000 to $150,000. Some applicants think that they should apply for the maximum amount, or “go for the moon”. They believe that the more they ask for, the more they
get. This is not true. With many lenders, the more you apply for, the more difficult it is
to get approved. With many lenders, if you apply for too much, they will simply decline
the request rather than approving your business for a lower amount. If your business only needs $50,000 in working capital but applies for $150,000, then it may be turned down completely and not receive any funding. In this case, the business should apply for as close to $50,000 as they feel they can.
Question: Are there minimum credit scores that are required for funding?
Answer: For the leaseback program, a credit score of minimum 650 is needed
in most cases for a medical practice loan. For the financing based on gross sales
which is based on the practice’s total receipts, there is no minimum credit score,
although scores above 500 are preferred and having a credit score over 600 allows
for more favorable terms and larger approval amounts.
Question: How long does it take to obtain funding? Answer: For this loan, the entire process takes approximately 7 to 10 business days. Upon receiving the simple one page application, the credit process takes from one to three business days. Upon an approval, documents are sent to the customer, which is same day. It will take one to two days for the customer to return the documents. After this, the review of the documents and verbal confirmation takes two to three business days. After this, it takes approximately one to three days for the customer to receive wired funds into their account, for a total of seven to ten business days for this medical practice loan.
Question: How much can we qualify for? Answer: The amount a practice can obtain for this loan depends primarily on the time in business, business credit, personal credit and cash flow. The cash flow may be demonstrated by either the business bank statements, or financials of the company, which could be a profit and loss statement, or interim financials, or previous years financials, or some combination of these.
Question: How much paperwork will be required? Answer: For requests under $50,000 just a one page application and asset list is required in most cases. If the request is over $50,000 and the business does not have both significant and strong business credit, then the company will probably want to provide an interim P & L, Profit and Loss statement. If the most recent three months business checking account statements are available adn they are strong, the company applying will also want to provide those bank statements. If this information is available, it should not be considered as documentation that has to be provided but information that will strengthen the application.
Question: What if we are approved for a medical practice loan, but for less than we need? Answer: If your business is approved for less than is needed, in many cases, a second funding segment, or “part” may be approved. This will depend on the strength of the company, but is often possible and many applicants are approved for significant funding. In addition, there are also other funding programs available under which the applicant may obtain funding. If one program cannot provide enough funding, another may be enough to get the customer all of the funding they need.
Question: What are the terms available? Answer: Terms for the asset based loan program are 24, 36, 48 or 60 months. For the Bank Statement Financing program, terms are shorter. Terms for this program are between 3 to 18 months.
Question: Is there an early payoff provision? Answer: Some of these medical practice loan programs are set up in part as a lease transaction for which the early payoff provisions are not as attractive as with other types of financing. In exchange, the tax write of advantages are often the most favorable of financing programs, often rivaling the mortgage loan deduction write off advantage.
Question: How can we qualify for a larger amount, such as $75,000 or $100,000 or more? Answer: In most cases, providing strong financial statements with increasing Gross sales and increasing net income will provide a strong boost in an effort to qualify for a larger amount. Another way is to prove the longest time in business possible. For instance, many businesses are not incorporated when they are first established. In many cases, they begin as sole proprietors or partnerships. These entities do not show up at the Secretary of State in most states. If a company began as a sole proprietor and remained as a sole proprietor for 5 years, then incorporated for 5 years after that, they may only been credited with 5 years in business. The lender will check with the Secretary of State and see only 5 years.
In cases such as this, the physician applying for a medical practice loan can provide the oldest business licences they can find to prove the full time in business. Another option is to provide the oldest financial statements available or schedule C they can obtain. This documentation will demonstrate 10 years in business which, all things equal, is considered significantly stronger than 5 years time in business. Some lending institutions, particularly traditional lending institutions do not seriously consider businesses with less than 3 years in business and will not provide loans, especially loans of significant amounts unless they the medical practice is more than 5 years old. As such, being able to prove more than 10 years in business in such an example will be especially helpful for a practice applying for a medical practice loan.
Question: Can we apply and qualify just in the business name?
Answer: While some Corporation only loans are approved, the vast majority of requests and approvals require the owner’s credit profile to be reviewed and on the paperwork as a signer at closing. For a company to have an opportunity for a Corporation only request, the time in business needs to be a minimum of 5 years with 10 years or more preferred. The company needs to have a strong business credit file with the major business credit agencies. A Paydex score of 70 or higher is required. Gross receipts will need to be strong, often over $1,000,000 per year. If the business is very strong on other areas, gross receipts less than this will be considered. The companies financials have to be provided and they have to be strong. Increasing gross sales and net sales are expected. The minimum net income reported is preferred to be $100,000 or more in most cases. Interim financials are requested and the same is requested for the interim financials.
Practice Analysis: How to determine what types of loans your practice should look at.
Many business owners, including medical practices, first decide which type of loan they want and like the best, then apply for that specific type of loan.
The first step in the process is to consider what are the practice’s strengths, such as cash flow, equipment, patient records, financials, etc.. Then look at which loans best match up with these strengths. Try to find out the guidelines and approval criteria for those loans, and along with your chief financial officer or a representative of those programs, determine which of these program your business is most likely to qualify for. Once you have determined which programs your practice will, or most likely will qualify for, list them in priority based on your practice’s needs and which will work better for your cash flow and medium to long term plans.
Is it really that significant to choose a loan that only uses some of your collateral? After all, I’ll pay it off soon enough. There are at least 2 major reasons to place major significance on financing that only uses part of the practice’s collateral. The first one is that it gives the practice much more opportunity to acquire additional loans if in 1 or 2 years it unexpectedly realizes it could use additional financing for other purposes. If this occurs, the practice will have collateral available that it may be able to leverage for other financing. The 2nd reason is that if there is an unexpected downturn in business or natural disaster and the practice has difficulty paying the loan, it will be less likely that the entire practice is in jeopardy.
Thank you for visiting our Medical Practice loan resource page!