Companies involved in the healthcare industry are some of the most important businesses in society. Like all businesses, however, a healthcare business may need financing to offer patients state-of-the-art care or expand to underserved communities.
Why Do You Need Financing?
A new business could require funding for startup costs, or an established business could want to upgrade its technology. Generally, though, healthcare businesses seek to boost their working capital with financing. Businesses within the healthcare industry are subject to unpredictable cash flows due to the way payments for their services are processed. Customers don’t usually pay upfront. Instead, they might pay through insurance. This means an invoice could be left unresolved for a few months before the patient’s insurance company sends in the payment. This makes it particularly difficult for healthcare companies to budget.
Who Offers Loans?
Commonly, banks and credit unions can offer loans for healthcare businesses of varying sizes. Usually with low-interest rates and reasonable terms. Each institution will have its process. But after the full application has been submitted, you can expect to receive funds within a month. The Small Business Administration is a federal agency that specializes in getting small businesses the capital they need. They offer several different types of loans, such as 7(a) loans and microloans, so check to see if there’s a loan specific to your needs. SBA loans do have stricter qualifications. Such as higher credit scores, and they can take a few months to approve, but they can also offer much higher amounts than a bank or credit union would be comfortable with.
Do You Qualify?
There are many healthcare business loans available, so you may qualify for one and not another. Take the time to shop around with different lenders and different types of loans and figure out what fits best for you. However, there generally are a few basic requirements you need to hit. All lenders will take a look at your revenue, cash flow, business organization, historical financial statements, and credit to determine your eligibility. A few lenders don’t consider credit to be a major part of the application. But having a high credit score will boost both your chances of approval and your ability to negotiate more affordable terms. It’s good practice to also have a business plan as part of your application, too. Lenders, particularly banks and the SBA, want to know that you have a detailed plan for your small business loan.
Call us to learn more about our business loans. Our large portfolio is sure to have something to offer your business, and we’re also able to tailor a commercial finance solution to meet your needs.
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