MEDICAL PRACTICE AND MEDICAL BUILDING FINANCING
Starting a new medical practice, or refinancing a current one, could be one of the most important financial decisions a doctor makes. PHD Financial has worked with many borrowers in the medical field and can help you determine the best loan product for your practice. Whether you are a physician, dentist, optometrist or veterinarian, we have the financing solution for you to build your medical practice.
Types of Loans for Medical practices include:
- Conventional Financing
- Equipment Financing
- SBA Loans
- Bridge Loans
SBA Loans for Medical Offices
For physicians looking to start a practice, an SBA 7(a) loan could be the ideal option. In addition, SBA 7(a) loans can be a great way for experienced doctors to buy out a partner or acquire a competitor’s medical practice. It is, however, important to keep in mind that these loans may not be available, or could be challenging, for doctors who don’t have excellent credit; or doctors with large amounts of student debt, which could disqualify many younger doctors still carrying debt from medical school.
The basic terms for SBA 7(a) financing include:
- Loan Size: $30,000 – $5 million
- Loan Purpose: Loan can be used for financing commercial real estate, equipment, and working capital
- Loan Term:
- Real Estate: Up to 25 years
- Equipment: Up to 10 years
- Working Capital: Up to 10 years
- Credit Score Requirement: 660 minimum
- Collateral: Additional collateral is often required
- Documentation: Documentation for SBA 7a loans for medical practices is extensive, and includes:
- Year-to-date balance sheet
- Business tax returns (for the last 2 years)
- Business licenses
- Personal tax returns and resumes for 20%+ owners
- Projected financial statements (1-3 years)
Conventional Financing for the Medical Field
Traditional banks are still the leading source of small business loans.
PHD Financial may work to secure some level of funding through the bank where you already conduct business banking.
PHD Financial works with banks that have loan programs especially designed for medical or dental professionals. The high success rate of medical practices makes lending to doctors or dentists an attractive credit risk, and banks often offer more favorable rates for financing a practice.
Bank terms are not generally as favorable as SBA loans, but here is what you may expect from a conventional bank loan:
- Loan Amounts: $30,000 to $5 million
- Repayment Term: Up to 10 years
- Interest Rates: Starting at 7%
- Time for Approval: average 4 weeks
Medical Equipment Financing
Financing your medical equipment can be one of the simplest elements of financing your overall practice. PHD Financial will find you a loan product with highly favorable terms. The financed equipment can be used as collateral and, often you can deduct the entire cost from your taxes in the year you purchase the equipment.
- Loan Amounts: Depends on the cost of equipment
- Repayment Term: Six months to 5 years
- Interest Rates: Starting at 6%
- Time for Approval: As fast as a few business days