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Financing Options for Your Practice Purchase, Start-Up or Expansion Project Part 2

By: Jim Baum

At-A-Glance:

  • Loan options are based on the type of project you pursue.
  • Conventional and SBA loans both may have distinct pros and cons.
  • Consider interviewing potential lenders to see if their terms meet your needs.
  • Using a specialized healthcare lender may save you both time and money.

Specialty Lender Financing

Using a specialized healthcare lender for your project may save you both time and money. Unlike most local banks, a specialized lender may combine your practice, equipment or property purchases into one loan package, providing a streamlined process with one credit application, one set of fees and one closing. In addition, specialty lenders may provide a broader range of loan options. They may also offer project management assistance and other business resources to help you make the start-up, practice purchase or expansion process run more smoothly.

Loan specifics may include:

  • Flexible repayment plans
  • 10-year amortization
  • Low closing costs
  • Financing based primarily on historical or projected practice income rather than personal assets

Questions to Ask Your Lender

Consider asking the following questions of potential lenders to help gain an understanding of the type and quality of service they may provide for your project.

Which specific markets do you serve?

Does the lender understand the unique financing needs of practices in your industry or speciality?

May I speak with your current practice customers?

Speaking to references may help you determine whether this lender can support your specific needs. If a lender does not have or will not offer the names of practice owners, you may want to consider other options for a lender.

How does the review and funding process work?

Funding may occur anywhere from a couple of weeks to several months post approval.

Is there a prepayment policy?

Ensure there are no prepayment fees or penalties, and avoid balloon payments if possible.

Who will fund and service my loan?

You may want to work with a financing team throughout your project that is available to answer questions and provide useful resources. Consider a lender who will not package your loan and sell to a third party.

Who do I call if I have questions or need help?

Having a name, and not just a department can be helpful during the life of the loan if you have questions.

How can you help if I experience problems in my practice?

You want to know your lender is part of your team and may be able to help you overcome potential challenges.

Understanding your financing options will help you select the loan that is just right for your situation so you can get your practice off to a successful start.

About the Author

Jim has worked successfully in the healthcare field for over three decades. He has most recently been advising and guiding doctors on a variety of matters including credit management, cash flow and practice borrowing. Jim has a degree in Business Administration. He is a trusted industry advisor and has made numerous presentations at national, state and local meetings. His experience has helped doctors successfully prepare for transition into practice ownership, as well as helping existing practitioners grow their practice. Contact: Jim.baum@wellsfargo.com or 1-855-798-9701

View all articles by Jim Baum


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All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.