Preparing for a Medical Loan: Steps to Consider
Whether you’re looking to buy a practice, invest in equipment, or purchase real estate, securing a medical loan is a key step toward growing your healthcare business. But navigating the financing landscape can be daunting without the right preparation. Here’s how to get ready—and position yourself for success.
Know Your Why
Before applying for a loan, clearly consider the purpose of the financing. Are you buying an existing practice? Expanding your current location? Investing in new technology? Different goals require different loan structures—such as acquisition loans, real estate loans, or medical equipment loans.
Understanding your “why” will help your lender align the loan terms with your business objectives.
Get Your Financial Documents in Order
- Lenders want to see a clear picture of your financial health. Gather the following:
- Two to three years of tax returns
- Business and personal financial statements
- Profit and loss reports
- Balance sheets
Proof of liquidity or down payment funds
Having this information organized signals that you’re serious and reduces delays in the approval process.
Check and Strengthen Your Credit
Both your business and personal credit scores impact your loan eligibility. Most lenders are looking for a FICO score of 680 or higher. Review your credit reports for errors and pay off any outstanding debts or collections.
If you’re not yet in ideal credit standing, consider working with a financial advisor to improve your score before applying.
- Evaluate Loan Options (Including SBA Loans)
- SBA loans are among the most popular choices for medical professionals. They offer:
- Lower interest rates
- Extended repayment terms (up to 25 years)
- Lower down payments (as little as 10%)
You can also explore conventional bank loans or financing from specialty lenders who focus on the healthcare space. Each has its own pros and cons depending on your needs and practice history.
Create a Business Plan or Loan Proposal
Especially for startups or acquisitions, a comprehensive business plan is crucial. It should include:
- Market analysis and competitive landscape
- Revenue projections and growth strategy
- Staffing plans
- Equipment or facility needs
This helps lenders feel confident in your vision and the return on their investment.
Choose a Trusted Financial Partner
Work with a lender or broker who understands the medical industry. Companies like ProMed Financial specialize in practice financing and can guide you to the right funding solution, ensuring you meet industry-specific requirements and avoid unnecessary roadblocks.
Preparing for a medical loan isn’t just about paperwork—it’s about strategy. With the right foundation, you can secure funding that supports your practice’s goals while keeping your finances healthy. Take the first step by working with an experienced partner who understands your industry and your ambition.