Finding the right type of funding for your healthcare practice means you’ll have the support you need as your practice evolves. A banking partner with healthcare financing experience is a good resource to help you select and secure the best type of funding for your practice.
Rising costs and slow collections in healthcare practices make funding increasingly important. Ben Foltz, Vice President and Credit Products Manager in Citizens' Healthcare Banking group, shares his expertise here to explain how to find the right funding and partner.
Use his insights from years in healthcare financing to help with this important process.
Healthcare professionals typically turn to financing to start, acquire, or expand a healthcare practice, or for debt consolidation and commercial real estate purchases. Foltz notes that common healthcare practice financing scenarios include:
Working with a lender who understands healthcare practices can help you find the best type of funding. For example, many practice owners regularly need support while waiting for receivables. “It can take time for receivables to start flowing smoothly when practitioners first start, and even mature practices can face cash flow crunches,” Foltz explains. Practice owners regularly use revolving lines of credit (LOCs) to manage cash flow and to cover the ongoing costs of operating a practice.
When it’s time to buy expensive equipment, make leasehold improvements, or purchase multiple assets, term loans may make more sense. “Business and equipment loans provide security by giving a commitment of funds up front — before the practice needs to make a large purchase or investment,” Foltz clarifies. “These loans typically have set borrowing limits and repayment terms.”
This capital-intensive industry offers many opportunities for financing. If you’re in doubt about the ability to borrow for a specific need, speak with your lender. “Our Healthcare Specialists look at each request individually and in detail. This ensures that both the customer and our team arrive at the best financing solution,” Foltz says.
The details of financing vary with each transaction, so it’s difficult to generalize, but Foltz describes the steps a practice owner can take to speed up the process:
Foltz notes that if the financial institution you’re working with has experience in healthcare financing, they’ll be well positioned to understand the expenses associated with a practice. Most lenders are likely to consider the following factors when reviewing applications:
Foltz suggests looking at your relationship with your lender as a long-term partnership and asking questions to ensure that your lender feels the same way. Investigate the following topics to find the right match:
Choosing the right financing partner for your healthcare practice and preparing in advance will help your practice find the best financing solution. A successful partnership with the right lender can support your goals now and as your practice evolves. If you'd like to discuss your practice’s needs, call 1-800-428-7463 to schedule a consultation with your Healthcare Specialist. Want to see how much you might be able to finance? Try our loan calculator.
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Disclaimer: The information contained herein is for informational purposes only as a service to the public and is not legal advice or a substitute for legal counsel. You should do your own research and/or contact your own legal or tax advisor for assistance with questions you may have on the information contained herein.