Start-Up Practice Financing
Starting your own plastic surgery practice can be exciting, but it also takes money to make it happen. You might need money for office space, equipment, staff, or even an EMR, electronic medical record. If you don’t have the money saved up, you’ll need to explore financing options. This blog will help you understand your choices, the risks involved, and the benefits of starting your practice.
Why You Might Need Financing
When you’re starting a plastic surgery practice, there are many costs to think about:
Renting or buying office space.
Buying medical equipment and supplies.
Hiring staff like nurses, receptionists, or billing specialists.
Marketing your practice to attract patients.
Paying for licenses, insurance, and software.
Many new practices don’t have enough cash to cover all these costs upfront. That’s where financing comes in.
Financing Options
Here are the most common ways to finance a new practice:
1. Bank Loans
Banks often give loans to doctors starting practices because it’s seen as a low-risk investment. With a bank loan, you borrow money and agree to pay it back with interest over time.
Pros: Lower interest rates compared to other loans.
Cons: Approval takes time, and you may need a strong credit history.
2. Small Business Administration (SBA) Loans
The SBA offers loans specifically for small businesses, including medical practices.
Pros: Lower interest rates and longer repayment periods.
Cons: Approval can be slow, and there’s a lot of paperwork.
3. Business Credit Cards
Credit cards can help with smaller, ongoing expenses like office supplies or utilities.
Pros: Easy to use for immediate needs.
Cons: High interest rates if you don’t pay the balance quickly.
4. Lines of Credit
A line of credit is like a flexible loan. The lender gives you access to a set amount of money, and you can borrow as needed up to the limit.
Pros: You only pay interest on the amount you use. It’s useful for covering unpredictable expenses.
Cons: If you don’t manage it carefully, it can lead to high interest payments or overuse.
Understanding the Risks
Borrowing money always comes with risks. Here are a few to keep in mind:
Debt: If your practice doesn’t succeed, you might struggle to repay the loan.
High Costs: Loans and credit cards come with interest, which can add up over time.
Commitment: Some lenders may require collateral or a personal guarantee.
Benefits of Financing
Despite the risks, financing can help you achieve your goals:
Start Sooner: You don’t have to wait until you save up enough money.
Grow Faster: With funding, you can invest in better equipment or hire more staff.
Build Equity: As your practice grows, you can pay off the loan and fully own the business.
Tips for Managing Financing
Plan Ahead: Create a budget and know exactly how much you need to borrow.
Shop Around: Compare different loans and lenders to find the best terms.
Did you know Bank of America is an ASPS endorsed partner? They offer Healthcare Practice Loans and are a great resource for plastic surgeons looking to open their own practice.
Start Small: Only borrow what you need and avoid taking on too much debt.
Starting your own plastic surgery practice is a big step, but the right financing can make it possible. By understanding your options, risks, and benefits, you can make informed decisions and set your practice up for success.
Schedule a call to learn more about our Practice Start-Up package and how plastic surgery consulting can help you through the pre-opening process.