How to Finance a Medical Practice

A medical practice requires funding for equipment, employees and testing.

Whether setting up a new medical practice, buying an existing one or expanding one, doctors will need financing to cover their expenses. Small business loans or loans for doctors are options that allow physicians to pay for their medical practice expenses until enough money is coming into the practice. Obtaining financing takes some work and planning, but once obtained, the money can be used for any purpose the doctor needs, such as initial startup costs or new equipment costs.

Things You'll Need

• Business plan
• Photo ID

Instructions

1. Locate a bank or lender. Like any other small business, obtaining a loan is a logical step for financing a medical practice. Banks have several small business loans available for doctors that are purchasing, expanding or setting up a medical practice. Banks will need the exact amount of money necessary for the project, a credit score, proof of identity and a business plan. If expanding an existing medical practice, the bank will need information about what the expansion will accomplish. When writing a business plan, include all information about initial startup costs, potential profits, the doctors running the practice, other key employees and the operating costs of the business.

2. Apply for a doctor's loan. Unlike a small business loan, a doctor's loan takes money out under the doctor's name rather than the practice name. It gives financing to medical professionals rather than medical businesses. These are usually smaller loans, but they are good supplementary loans to business loans if more money is needed.

3. Look for medical practice grants. Government grants are typically available for doctors that are working on medical studies, research or experiments. Some state or local governments might have grant programs for medical doctors setting up a new practice in rural or under-developed locations. Medical grants are available through sources like the government, or private lenders such as drug companies. Keep in mind that most medical grants are related to research and development, but some states might have developmental grants available as well for new doctors or new practices.

References

• Free Grant Money: Government Grants
• Wells Fargo Small Business Loans: Medical Practice and Health Care Professionals
• BRT Financial Inc.: Physician Loans and Doctors Loans
• Transition Consultants: Medical Practice Valuation