By Matthew Gillman, Business Financing Expert & SMB Compass Founder
Are you considering getting a loan for your healthcare business? Even if you don’t need the funds now, it’s important to establish a strong relationship with a financing expert.
This article outlines the different reasons why you should keep lenders in your contacts, no matter where your business stands. Whether your healthcare business just got off the ground or you’ve been serving patients for decades, having a finance manager to call anytime definitely has its perks.
Why Talk to a Lender Now
1Emergencies are inevitable
As you grow your medical practice, it’s inevitable to experience financial hiccups. You might need a new x-ray machine to replace your old one. You could use more funds to cover quick renovations or hire temporary practitioners. On top of that, emergencies such as calamities, natural disasters, a cyberattack, or a pandemic may take a toll on your business.
During these situations, having someone to call when you need funding may help you overcome unforeseen challenges and cover any expenditures that you currently don’t have the budget for.
2You’ll know the best loans for your medical practice
Small business loans come in many different types. Some loans may generally be used for various purposes, such as an SBA 7(a) loan. On the other hand, there are loans intended for more specific uses, like an equipment loan.
The thing is, even when you already have an idea of what type of loan to get, there’s no guarantee that you will be able to secure the funds. Some lenders may require collateral; others need you to have a credit score of more than 680. Some lenders will require you to be in business for more than two years; others wouldn’t lend you money if your industry is too risky to invest in.
With so many factors to consider, only lenders may be able to tell which type of loan is best for you. Working with someone who’s an expert in small business financing can help you find the best type of loan for your every need–even before you finally decide to apply for one.
3It gets easier to apply
When lenders already know about your business–the number of years in operation, your experience running the company, and so on–it gets easier to apply. Your lender already knows what type of loan to recommend and the requirements you need to submit.
On top of that, you’ll be able to accomplish your paperwork earlier. Since business loan applications can be a tedious process, having a lender to help you process your paperwork will go a long way in getting approved much faster.
4Someone tells you what to expect
Nothing feels worse than needing more capital, only to find out that you don’t meet the minimum requirements. Working with a lender sets realistic expectations about where you stand financially, so you can improve your credit score, manage your cash flow, or improve your business plan.
Plus, having a lender you trust makes it easier to open up about your current business situation. For example, when you tell your lender that you have outstanding debts, they can help you plan the best time to get a new loan and how much financing you’ll be qualified to get.
5You can get personalized services
Lenders are processing many different clients at the same time. Sometimes, they’re out of town to meet with a client and won’t be able to get back to you soon. Often, you won’t have direct access to the lender because a gatekeeper manages the schedule, appointments, calls, and emails. In which case, your message will sit in the mailbox unanswered for days or even weeks on end.
Leveraging close relationships with a lender gives you direct access to a finance expert anytime you need advice. You also get personalized services when you’re ready to apply for financing.
When you need to increase capital–whether that’s for urgent equipment repairs or to expand your medical practice–it can be reassuring to have direct communication with the lender.
Questions to ask your lender before getting financing
Healthcare businesses have more financing options today than ever before. In the past, traditional lenders like banks and credit unions were the ones you would typically go to for financing. Nowadays, it has become more convenient for small business owners to get funding through alternative business loan lenders.
If you’re looking at getting financing anytime soon, here are the 10 most important questions you need to ask your lender.
- Do you offer financing to businesses in my industry?
- What will my payment schedule look like?
- How do I know if I’m qualified to apply for a small business loan?
- What are the most basic requirements I need to prepare beforehand?
- How long will the application process take?
- What types of financing are ideal for my medical practice?
- What are the typical rates and fees for the type of loan you would recommend?
- Is there any way I could lower the interest rate I may have to pay?
- Do I need to put up collateral for a small business loan?
- Is there any restriction as to where I can use the funds?
Connecting with a lender now can help you fast-track your loan application
You don’t have to wait until the last minute to get in touch with a lender. Even before you need a loan, it’s advisable to establish a strong relationship with finance experts so you can prepare ahead of time.
About the Author
Matthew Gillman is a business financing expert with more than a decade of experience in commercial lending. He is the founder and CEO of SMB Compass, a specialty finance company providing education and financing options for business owners.
Healthcare Business Today is a leading online publication that covers the business of healthcare. Our stories are written from those who are entrenched in this field and helping to shape the future of this industry. Healthcare Business Today offers readers access to fresh developments in health, medicine, science, and technology as well as the latest in patient news, with an emphasis on how these developments affect our lives.