By: Leah Virzi
Quick, call a doctor
Healthcare is expensive. It is expensive to receive, and it is expensive to offer. When owning your own private healthcare office, you have to pay for an array of expenses. These expenses include the cost of liability insurance, buying medical equipment, payroll, paying for utilities, purchasing pharmaceuticals, and much more.
That is quite a bit to keep track of. In fact, the majority of medical businesses that fail are those that are unable to keep track of their own expenses. Some may even fail to keep track of how their patients are paying them back, which leads to a major loss of revenue.
Knowing you are paying quite a bit to keep your office running and to keep your physicians, nurses, scribes, and technicians on staff, you have to charge quite a bit more for your services in order to gain any sort of profit. Sitting down with an accountant or CPA will help you organize the financial losses and gains so that you do not end up going under.
Taking precautions by forming a good budget and acutely keeping track of patient repayment are two great ways to keep your business from failing, but some things are inevitable. The inevitable is the event of taking on patients with little to no insurance. Those who are under or uninsured may not be able to repay the money from a surgical procedure, or from performing a series of medical images, for a long while.
This creates a problem, because you want to maintain your high credibility in your community and keep the quality employees that you have on staff, but you may run short of being able to pay for things like new equipment or even next month’s payroll.
This is where we can step in and help, so you can end up making more of a profit to keep your business up to date, or to expand and build new locations around your area.
What kind of loans can you use?
For when you are looking to purchase newer equipment, equipment financing is a great solution. You will be able to finance or lease equipment such as an MRI machine, a heart monitor, EKG machine, or even just an exam table. Those are all tools that are essential to make sure your patients are being carefully monitored and comfortable at all times. Equipment financing is a quicker way to receive funds for exactly what you need, as long as you can provide business records from the past year, as well as your credit score. These loans are paid back within the lifespan of the equipment, or refinanced upon purchasing new or used equipment, making it both an affordable and flexible option to ease the high cost of most medical equipment.
Business Line of Credit
If you are looking to fill gaps in cash flow, then a line of credit may be the best solution for your business. A business line of credit will allow you access to funds at all times. This is great if you are looking to cover the cost for insurance, restock pharmaceuticals for in-office dispensing, or even just to cover the cost of payroll. A business line of credit also has a fast, easy application which once it is assessed, you can receive funds within 1-3 business days.
Term loans are really great if you are looking to expand your business. Once your application is accepted and reviewed, it will take 1-2 weeks to receive funds. If you are looking to make a large purchase like a new medical office, we recommend that you look into taking out a medium-term or long-term loan. Medium-term loans are usually paid off within 5 years, and long-term loans can be stretched out to 10 years. The length of these loans makes repaying them more affordable than if you were to pay the whole sum of money back within a year or two.
A short-term loan can be utilized when you are looking to cover insurance costs if someone files a claim against you, because often times, legal fees can come at a very hefty price.
Utilizing funding will give you more financial freedom while you are waiting for patients to repay their medical bills through your practice. You can also use funding solutions to cover the costs of marketing, accounting, legal services, and random expenses. Most medical practices fail because they are not able to keep track of funds coming in and going out, so with the help of a CPA, you can get your finances together, and we can help you take care of the rest so you can continue to pay for every expense that keeps your business running.