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Tailored for entrepreneurs that want to establish additional active and passive income streams.

 

 

 

Customized financing to consolidate high-interest debt or fund major purchases or expenses.

June 15, 2023

What is a Medical Practice Loan? | BHG Financial

Reasons to consider taking a loan to pay for a vacation

Medical practice loans are financial solutions that are uniquely designed to allow doctors and other healthcare providers to manage and expand their practices. Borrowed funds are used to cover expenses, improve facilities and patient experiences, and/or further develop operations. Larger loan amounts can be used for more specialized purposes, including but not limited to partner buy-ins, partner buyouts, and practice acquisitions.

Compared to other business financing options, medical practice loans are generally long-term solutions that can come with more generous borrowing limits and longer, more flexible repayment terms. As with any loan, the borrower is responsible for repaying the principal amount plus interest within a specific timeframe.

Note: Medical practice loans are intended for established healthcare providers. Those still in residency should consider alternative sources of funding to start a practice.

The lender’s perspective

Providers of financial solutions prefer to work with borrowers who demonstrate a great deal of reliability. Healthcare providers like you are highly respectable and critical members of our communities. You’ve made many sacrifices throughout your journey and are recognized for your superior work ethic and dedication.

In other words—your character matters, and it can increase your chances of being approved for financing.

Plus, in the eyes of the lender, medical practices are generally perceived as having a lower risk due to their high-income potential and ability to generate returns.

That being said, approval is never guaranteed. You must submit a completed application, have it reviewed by your lender, and wait for a credit decision based on creditworthiness and the specifics of the request, such as the amount you are looking to borrow.

For our part, BHG Financial and other lenders are held to high underwriting standards. We’re responsible for protecting our institutions against delinquencies and charge-offs (when a lender writes off a debt that they believe will not be repaid).

To increase the likelihood of approval and to maximize the amount that can be borrowed, medical practice owners must be prepared to demonstrate financial strength, as well as the ability and propensity to repay debt.

3 ways to use a medical practice loan

There are 3 overarching reasons why a provider would obtain a medical practice loan. In this section, we’ll set context for each.
 

  • Practice development—To stay competitive in this evolving market, healthcare providers need to continuously develop their practices. Medical practice loans can help you upgrade patient services with features like online booking, online paperwork, live wait times, and extended hours. The funds can be used to buy or replace essential equipment, whether you’re a dentist who needs a new X-ray machine or an optometrist who wants top-of-the-line retinal scanners. With medical practice financing, you can purchase your rented office space to decrease your monthly expenses and earn capital appreciation in the future. You can even relocate your practice to a more desirable part of town to expand your client base. All of these initiatives fall within the scope of practice development.
  • Practice expansion—If you’ve outgrown your existing office space, it may be time to expand your practice. A larger office generally generates more income and can improve your bottom line with the right strategy in place. If you’re wondering whether expansion is right for you, here are some questions to consider:
    • Do you believe you will gain new patients by expanding?
    • Will you retain your loyal patients while you work through the transition?
    • Will expansion lead to economies of scale (increased savings as a result of a higher level of production)?
    • Do you have a strong management team and reliable staff?
    • Do you plan to treat additional patients yourself or bring on another provider?

Note: These questions should serve as a starting point for weighing the benefits and drawbacks of expansion.

  • Practice acquisition—As we mentioned, a medical practice is a low-risk investment with high income potential, but it’s almost impossible to predict when a medical practice will go for sale. That makes the market highly competitive—often involving parties like hospitals and private equity firms—and opportunities disappear fast. So, if you are considering buying a medical practice, you must navigate quickly and decisively, while keeping affordability in mind.

What are the advantages of obtaining a Medical Practice Loan from BHG Financial?

When someone is looking for a specific service in the medical industry, it’s highly recommended that they see a specialist—a professional who has extensive expertise in that particular area.

The same approach bears weight for healthcare professionals who are searching for financing—it benefits you to choose an experienced financial partner who understands your unique needs and can provide you with a tailored loan solution.

BHG Financial was originally founded in 2001 as “Bankers Healthcare Group,” specializing in financial solutions for members of the medical community. Since our inception, we have funded over 100,000 healthcare professionals, with many returning for additional financing to further develop their practices.

Though we’ve grown over 20 years of lending to serve other professions as well—now as BHG Financial—we’re still committed to providing the financing that hardworking healthcare providers deserve.

Our Medical Practice Loans are customized to support every stage of practice development. Compared to other lenders that offer low amounts and/or short repayment periods, BHG Financial provides loan financing up to $500,0001,2 coupled with extended terms of up to 12 years1, making your goals of acquiring or growing a practice more affordable than ever.

We understand that, as a practicing provider, your time is limited—so we simplify the application process as much as possible, while still maintaining the integrity of our business.

Can you relate?

For some medical providers, lack of financial know-how is a hinderance to the rapid success of their practice. Most often, business training—including financial management—is an afterthought in medical school and remains a persistent pain point for long thereafter.

At BHG Financial, we’re dedicated to treating you with the same level of service that you give your patients. You can count on our team of trusted financial professionals, who are available 7 days a week, to guide you through the process and explain all your options so that you feel confident in your decision.

You can also view your personalized estimate quickly and without affecting your credit score by using our online Payment Estimator.

 

1 Terms subject to credit approval upon completion of an application. Loan sizes, interest rates, and loan terms vary based on the applicant's credit profile. Finance amount may vary depending on the applicant's state of residence.

2 BHG Financial business loans typically range from $20,000 to $250,000; however, well-qualified borrowers may be eligible for business loans up to $500,000.

For California Residents: BHG Financial loans made or arranged pursuant to a California Financing Law license - Number 603G493.

No application fees, commitment, or impact on personal credit to estimate your payment.