5 Tips for Financing Your Medical Practice Startup
Are you ready to to start your own medical practice?
Maybe you want to start a practice to have more control over your income, or maybe you’d like to spend more time with your family. Regardless of your motivation, it is important to get the timing right with the many details involved in a startup. One of the many important aspects of practice startup timing is bank financing.
If you plan to finance your startup through a bank, here are a few tips for you to consider…
- Allow sufficient time for a bank loan. A bank may lead you to believe that you can get approval for a loan in less than two weeks. This is usually not the case and this unrealistic expectation can certainly throw a wrench into your startup timing.
- Yes doesn’t necessarily mean “yes.” When a bank says “let’s move forward,” that does not necessarily mean you are approved. A bank may be ready to “move forward” with the process, however, it could still take months until you receive final approval.
- Your personal credit matters. Banks are very interested in your personal credit. You don’t necessarily have to have a lot of available capital, however, it is crucial that you don’t have a poor credit history. You also have to demonstrate an ability to generate money and not spend excessively.
- Lending trends vacillate. There are times when medical practice startups are “in favor” as a lending risk and sometimes not. Right now we’re in a mostly favorable era of lending for physician startups. The trend does change and it can affect the timing of your startup plans.
- Special consideration for recent medical school graduates. If you have substantial outstanding student loan debt or insufficient industry experience, you may have to make up for that lack of experience. Most lenders, especially those offering Small Business Administration loans (SBA loans are offered through third-party lensings such as banks) will require that you use an outside management firm or partner with a more experienced practitioner.
Are you considering starting your own practice? We’ve helped many practices start off on the right foot and we are happy to help you too!
Contact us via email at email@example.com or call 800-635-4040 with your startup questions.