Whether establishing new medical practices or expanding existing ones, more physicians are utilizing loans to help them reach their long-term goals.
Most practices do not have a significant surplus of capital on hand and are careful to preserve the capital they have, so it is becoming increasingly common for physicians to seek out loans for financing expensive medical equipment, purchasing buildings, practice acquisitions and more.
Applying for a business loan can be complex and seem overwhelming, but there are steps healthcare professionals can take to make the right business decisions for their practice.
Organize All Documentation
As you begin the loan application process, getting all of your documentation in order is an important first step. Having as much information as possible will help your banker see all aspects of your practice. Prepare all important documents such as:
- a profile of your practice with background information, such as the length of time your practice has been in business, what your earnings are, how many employees you have, etc.
- a business plan in which you outline your business goals and give a detailed description about your business model and how your practice makes money
- any collateral you can offer (personal or business assets)
- financial statements from your practice and personal accounts
Your accountant can assist in preparing your balance sheets, tax statements and other financial documents so you can demonstrate financial stability.
Prepare a Proposal
Lenders will have several questions about your intentions for a business loan. Having detailed responses and a thorough outline of your plans will make your proposal stronger. Prepare to address questions such as:
- How much money do you intend to borrow? What are your borrowing needs and for how long?
- How will you utilize the money? How do you expect it to positively impact your business?
- How do you plan to repay the loan? Will you be able to repay it if your practice experience losses?
- How much equity can you contribute? Can you commit with a personal guarantee?
Select the Right Banker
Take the time to talk to bankers at several institutions before applying for your loan. Just as they are interviewing you to see if you are qualified, you should interview them to make sure you find an institution and a banker that fit your practice. As you meet with different bankers, ask them questions such as:
- Do they have team members who specialize in banking medical practices specifically?
- Are loan decisions made locally?
- Does the bank do a significant amount of business with medical practices? Are the lenders familiar with the healthcare industry, and do they work closely with physicians regularly?
- Are there a variety of products and services available?
Know Your Options
Do your homework and make sure you are getting the right type of credit for your business needs. Depending on your goals and capital needs, you may want a standard business loan, a credit card or even a government small business loan. Talk to your banker about the different products and services available so you can find the best solution possible for your practice.
Remember, careful preparation, organization and open communication with your banker will help ensure the loan process goes smoothly from start to finish. Obtaining a loan can seem challenging at times, but it can also be rewarding as you begin to grow your business and take your practice to the next level.
Jeanne Bennett is a Senior Vice President, Private Banking Manager for Amegy Bank of Texas in San Antonio. She leads a team of professionals that works extensively with physicians and hand in hand with bankers from all lines of business, enabling clients to receive one-on-one, personalized solutions and comprehensive service at any time.
The private banking team specializes in meeting and anticipating the needs of doctors, corporate executives, professionals, entrepreneurs, business owners, wealthy individuals and families who expect and deserve excellence and seek personalized relationship banking. For more information, please contact Bennett at 210-343-4556 or email email@example.com.