Financing Tips for New Medical Practice

Physician practice financing will be the main topic for you to explore once the moment comes for you, as a medical professional to think about opening up your own business. And no matter the line of your healthcare practice, such time will come.

After all, the prospects of having your practice seem quite luring: a profitable business and a flexible lifestyle are something most of us aspire to, and healthcare is one of those fields that can certainly pay off the initial investment of great time and money needed to become a medical professional. 

Still, a healthcare business of any line and size is one of the most expensive to start up. With expensive equipment, quality tools and authentic products, location choices, and marketing strategies to even show up on the market, the costs seem – and are – overwhelming. 

Luckily, medical practice loans prove more accessible than those for other businesses, due to the stable income and revenue potential, reassuring lenders that the loans will be repaid.

To help you prepare for your next career step, Doctor Medica brings tips on approaching physician practice start up loans.

Key Takeaways

• Financing a medical practice is the biggest challenge for new business owners in the healthcare industry. 
• Some estimates say that it costs around 100,000 dollars to open up a medical business. 
• There are numerous funding approaches available tailored to medical business practices, like private lenders, SBA loans, and traditional banking loans. 
• Medical business practices are both profitable and promising, which is why it is recommended that experienced healthcare professionals explore this option as the next step in their careers.

Funding Tips for Your New Medical Practice

While financing a medical practice is a challenging process, there are some steps you can take to make the journey less confusing for you – and more likely to lead to success. 

Remember that all new businesses need time and funds to get up on their feet and that you will have to make some personal and professional adjustments to accommodate the process. Overnight success is only an exception to the rule, so get ready for the long road ahead – knowing that preparation is key.

Doctor Medica brings you tips to help you outline your strategy:

1. Consult with experts.

The first step in opening up any practice is research. Collect advice from professionals in your business area, learning from their experience and their mistakes. This is crucial for staying in line with the times and knowing how to approach your specific business plan to fit the needs of the current market. And so, from successful colleagues who have already opened up their businesses to tax and financial experts who keep track of legal requirements, sink in all the information to prepare for the next step for your practice financing. 

2. Create a detailed business plan.

Any new business requires a detailed business plan, so a medical practice is no exception. 

Put pen to paper, and try to be as precise as you can, writing up an executive summary of your operation and your business description, ideally with a market analysis where you will know how your practice fits into its current needs, moving on to services you plan to offer and then a marketing and a sales strategy, operations plan, risk management, and finally a financial plan. The more information you provide, the more likely it will be for your business to start on a good foot – and receive necessary funds to do so.

3. Outline your costs.

Outlining costs is a part of a detailed business plan, but also the first and the last step in your process of opening up your own medical practice. Set realistic goals and assess all your assets, knowing how much money you have, how much you will need, and what sacrifices you are willing to make to reach your goal. 

4. Explore medical practice loans. 

Physician practice loans are tailor-made loan programs, usually funded by commercial lenders, that help start new businesses – just like yours. 

Examples of these are:

Traditional Bank Loans

Traditional bank loans are the most obvious ones to look into. They usually require a long application process, a spotless record, and a few years of an already-running business to qualify for.

SBA Loans

Small Business Administration Loans are a U.S. program that helps businesses start up and maintain their growth. As with traditional bank loans, the application process may be lengthy, but the upside for this is that you don’t need a long track record to apply. 

Private Lenders

From private investors to financial institutions other than banks, like financing agencies, there are plenty of options to look for in your area, offering startup programs and equipment financing.

Once you acquire your loan, the money will be funded directly into your business account – not your personal one. Therefore, in the process of your application, you will already need to have documentation prepared, like employment status verification, your medical business practice nature, and financial information from your practice.

Explore the idea of a business partner or an investor

Healthcare practice loans can be minimized or even avoided if you have a business partner or even an investor who would stand by your plan and help you manage or split costs. Explore medical investment programs and try to get in touch with like-minded colleagues who would love to share your dream.

Whatever it is that you decide to do, know that evaluating your practice costs will be a regular part of business. 

Conclusion

Medical practice financing is a long process that will require any new business owner a lot of time, energy, and patience to plan. Though expensive, medical businesses prove to be profitable, so thinking about opening up your own office would be a logical step in your career, especially if you are someone with rich experience and a fulfilling career. 

Assess your dreams, set realistic goals, and know that with good planning, you, too, can create a business from scratch. 

Don’t hesitate to research business loans for medical professionals in your area, and to contact Doctor Medica for detailed guidance on supplying your new medical practice with trusted, affordable products.

FAQ

What is a medical practice loan?

Medical practice loans are programs set to help finance new and existing medical practice businesses.

Are medical practice businesses expensive?

Private medical practice is one of the most expensive lines of business, with some estimates rounding up physician practice financing about $100,000 just to begin. Note that the costs depend greatly on the initial scale and medical practice types, as it will not be the same for, for example, a dentist and a chiropractician.

How to get medical practice loans?

Depending on the medical practice loan you apply for, you will need to show your business plan, cost assessment, and proof of your finance records.

Who can apply for a medical practice loan?

You can apply for medical practice loans as a healthcare professional, no matter the field of your medical practice.

References

• How To Get Medical Practice Loans – Forbes Advisor. www.forbes.com. https://www.forbes.com/advisor/business-loans/medical-practice-loans/
• A Guide to Medical Practice Loans. fundbox.com. https://fundbox.com/resources/guides/medical-practice-financing-loans/
• HealthManagement.org. Understanding Medical Practice Loans For Physicians – How Do They Work? @ehealthmgmt. Published January 3, 2024. Accessed August 17, 2024. https://healthmanagement.org/c/hospital/guest-post/understanding-medical-practice-loans-for-physicians-how-do-they-work
• Physician Loans and Practice Financing | Henry Schein Medical Finance. Henry Schein Medical Finance. Published December 13, 2021. Accessed August 17, 2024. https://medicalfinancial.henryschein.com/services/medical-practice-financing-medical-practice-funding/