Home  Library  Consolidate Your Business Debt to "Grow" Your Practice

Consolidate Your Business Debt to "Grow" Your Practice

By: Sabrina Morrow

With the appropriate financing, healthcare professionals like you may be able to achieve your practice growth goals. But for some practitioners, debt accumulation might be weighing them down and -- if not properly managed -- could derail the dream. If you're like other healthcare practitioners, you may have taken out your first loan to finance your education. Years later, you may have borrowed again to realize your dream of owning your own practice. As your business grew more successful, perhaps you sought to finance expansion, technology purchases, or a change in location.

While these are all smart investments in your business, your challenge may now be how to manage a variety of loans with varying rates and terms.

To help you balance the load, the answer may be to consolidate your business debt. Consolidating your debt may help you simplify monthly payments but because you pay interest on one, albeit larger loan, you may have more flexible cash flow enabling you to reinvest in your business.

When you reduce your number of monthly loan payments, you may be more able to fund vital practice enhancements. From your team?s increased job satisfaction to improvements in patient care, you may see the benefits of your investment, both in the short and long term. And practice reinvestment may allow you to take advantage of IRS section 179 tax credits. Any extra cash flow you create could also help you fund your retirement account. For the best guidance specific to your situation, consult with your tax advisor or trusted financial planner.

When consolidating debt, look for opportunities to lower your interest rate and monthly payments without increasing the overall term of your obligations. To strike that balance, keep these helpful tips in mind:

  • As you narrow in on your choice of lender, ensure the lender understands your business and has loan options that can meet your needs.
  • As you consider debt consolidation, be sure to also manage your personal credit history well before approaching a lender. Even if your credit is good, any increase in credit activity, even on a personal level, may stall the loan process for your business.
  • Before you apply, carefully consider whether consolidating your existing debt is the right choice for you. Consolidating multiple debts means you’ll have a single monthly payment, but it may not reduce or pay your debt off sooner. The payment reduction may come from a lower interest rate, a longer loan term, or a combination of both. By extending the loan term you may pay more in interest over the life of the loan. By understanding how consolidating your debt benefits you, you’ll be in a better position to decide if it is the right option for you.
  • Avoid submitting multiple loan applications during the approval process. A lender who sees that your credit has been repeatedly reviewed over a short period might consider you as a credit risk if you have taken on too much debt or been rejected by other lenders.
  • Stick with fixed. A fixed-rate loan may help you balance cash flow because you know what the payment will be each month. Evaluate the benefits of both fixed and variable to your business situation.
  • Depending on the size of the loan, practice loan terms typically are seven to 10 years. Keep in mind that a longer term will add to your interest expense over the life of the loan, another important factor to balance. 
  • Have your trusted financial consultant review any loan commitment.

Careful debt consolidation could help you unlock the vast potential of your practice in new and exciting ways, possibly enabling you to grow and save at the same time!

For more information about refinancing your business term debt, call 1-888-652-4942 to speak to a healthcare specialist.

About the Author

Sabrina Morrow, MBA, Manager Pacific Northwest, Wells Fargo Practice Finance, has more than 18 years in business administration, banking, and building strong long lasting relationships with happy clients. Sabrina holds a master's degree in business administration and has extensive experience in small business finance, business and consumer lending and credit. Her passion is helping her clients, large or small succeed financially. Currently, Sabrina specializes in the small business healthcare lending segment with four verticals (Dental, Medical, Veterinary, and Optometry). When she is not helping clients startup or acquire a new practice, upgrade, renovate or expand an existing practice or prepare for a transition event, she is taking care of her 4 dogs, extended family and volunteering for some cause she is close to. Most of all she enjoys being a resource for her clients, family, friends and colleagues. Contact: Sabrina.Morrow@wellsfargo.com 844-800-0140

View all articles by Sabrina Morrow


Want more strategies for practice success?

The best way for us to help you meet your needs is to hear about them directly from you. If there's a business, financial or practice-related topic you're interested in, let us know. We'll do our research and get back to you.

The articles and materials on the Wells Fargo Practice Finance website are provided for general information only and do not constitute, nor are they intended as, a substitute for consultation with accounting, tax, legal or other professional advisors. Wells Fargo makes no representation regarding the articles available in the Strategies for Success Library or the completeness or accuracy of the information contained therein. The articles and the information contained therein may be incomplete, may contain errors or may have become out of date. Wells Fargo makes no commitment, and disclaims any duty, to update any of the articles or materials in the Strategies for Success Library.

The views expressed in the articles are those of the authors alone. They may or may not reflect the views or opinions of Wells Fargo.

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.

Wells Fargo Stagecoach Logo