Which medical practice loan is right for you?

A look at the various loans available.

The best medical practice funding option for you depends on your practice’s goals, challenges, and financial history. Between traditional lending options and alternative lenders, it’s difficult to understand the differences between funding types and determine which best suits your needs:

  • For short-term funding, non-loan financing such as merchant cash advances or invoice factoring provide a quick infusion of working capital so you can stabilize cash flow between insurance payments, invest in marketing, or kickstart your practice’s growth.
  • For long-term funding, SBA 7(a) loans offer the best rates and terms, but they’re the most challenging to get. Bank loans may be a good alternative.
  • For quick medical practice loans, select an alternative lender. Unlike traditional lenders, they can approve and deposit funds in as little as 24 hours.

Keep reading for advice on which kind of medical practice funding suits you best, including if you:

  • Need fast funding
  • Need a large loan over $500,000
  • Have a strong financial history and great credit
  • Have low credit or no collateral
  • Are a newer practice
  • Need working capital
  • Are investing in real estate or purchasing an existing practice
  • Are purchasing equipment

If you need fast funding

  • Alternative lenders

For quick funding, alternative lenders are always your best option. In some cases, funds can be deposited in as little as one business day thanks to a streamlined online application and shorter approval process. Multiple forms of fast funding, including:

  • Merchant cash advances (MCA): A lump sum is advanced to you in exchange for a percentage of debit and credit sales. Ideal for practices that process lots of debit or credit transactions.
  • Invoice factoring: A “factor” advances you up to 90% of the value of your outstanding invoices. When the factor receives payment from your clients, you receive the rest (minus fees). Ideal for practices with long accounts receivable periods.

Alternative small business loans, business lines of credit, and collateral business loans are also available.

If you need a loan over $500,000

  • Small Business Administration
  • Banks and other traditional lenders

For loans over $500,000, traditional lenders and the SBA—who offers up to $5M through the 7(a) Guaranteed Loans program—are the way to go.

If you have a strong financial history and great credit

  • Small Business Administration
  • Banks and other traditional lenders
  • Alternative lenders

The SBA and banks offer the best rates and longest terms, but applicants must have great credit, strong financial histories, and collateral or a personal guarantee to qualify.

If you have low credit or no collateral

  • Alternative lenders

Alternative lenders have flexible approval requirements that consider more than your credit score, and typically don’t require collateral or a personal guarantee.

If you’re a newer practice

  • Alternative lenders

Banks and the SBA require 2+ years in business. Alternative lenders consider businesses who’ve been in operation for at least 6 months.

If you need working capital

  • Alternative lenders
  • Banks and other traditional lenders

Traditional lenders offer funding for use as working capital, but some restrict their usage.

Alternative lenders offer more small business working capital loan options without restrictions on usage.

If you’re investing in real estate or purchasing an existing practice

  • Alternative lenders
  • Small Business Administration
  • Banks and other traditional lenders

Whether you’re buying a practice from a retiring physician, investing in an existing practice, or expanding to a new location, practice acquisition loans are available from each lender:

  • Traditional lenders offer the best terms if you have strong credit, collateral, and time to navigate the longer application process.
  • Alternative lenders offer collateral business loans with higher rates, but with less restrictive requirements and faster turnaround times.

If you’re purchasing equipment

  • Alternative lenders
  • Banks and other traditional lenders

Some traditional lenders offer equipment financing for medical equipment purchase or repair. The terms are linked to the equipment’s lifespan, and the equipment serves as collateral.

Alternative lenders also offer funding that can be used to purchase or repair equipment, such as MCAs or online invoice factoring.

Get the medical practice funding that’s right for you

Traditional lenders like the SBA and banks have the lowest rates, longest terms, and strictest approval requirements. Alternative lenders, on the other hand, have looser requirements, faster approval times, and multiple types of physician funding up to $500,000.

Alfredo Rosing is the Vice President of Marketing at Greenbox Capital®. With over 25 years of combined experience in marketing and financial services, Alfredo is an expert on innovative financial technologies with a passion for connecting consumers and businesses with socially responsible funding. Prior to joining the Greenbox Capital team, Alfredo launched an award-winning online lender that was recognized as the winner of the 2017 Fintech Awards US Firm of the Year for Lending Innovation Award. Alfredo is a graduate of Southern New Hampshire University with a BS in Marketing.Greenbox Capital® funds all medical specialties. Our expert Funding Advisors work closely with you to find the right funding option for your goals. Learn more about medical practice funding.