A medical practice, like any small to mid-size business, may sometimes face financial struggles but fortunately there are options available for physicians who need working capital. Moreover, thanks to these solutions, physicians can have an easier time securing financing compared to professionals in other industries.
Some of the more flexible alternative business funding options available are merchant cash advances for physicians. They are not loans but purchases of a fixed dollar amount of a business’s future credit card and debit card sales and remittances. They provide working capital that can be used for any business need, such as new medical equipment, patient engagement programs and Emergency Medical Record and Emergency Health Record systems.
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A busy physician doesn’t have enough time in the day to fill out the endless paperwork to secure traditional financing. If the physician’s creditworthiness is in doubt, then obtaining a conventional business loan may prove problematic. These days many physicians shoulder the burdens of heavy student loan debt. For them, having the perfect credit score that most banks require to quality for a small business loans is but a dream.
As an alternative to loans, merchant cash advances can provide the working capital they need because their personal financial situation is not taken into consideration. With the advent of online lending, physicians can get approved fast and efficiently.
Merchant cash advances rely on the revenue of the business instead of the assets of the business or the individual. That’s why getting a merchant cash advance may make perfect sense for physicians, especially if they’re affiliated with a local health center. They can quickly get the funding they need without having to put their practice or their personal residence up as collateral.
Flexibility is probably the most important benefit that merchant cash advances offer physicians. Business loan programs have many terms and conditions attached to them, but merchant cash advances can eliminate those restrictions. If a physician has wanted to buy a special piece of equipment or expand the practice, then a merchant cash advance is the way to go.
Best of all, this flexibility allows physicians to have a steady flow of capital during uneven billing and reimbursement cycles, or if there were major charges in dispute with an insurer. Since these assets must be segregated during the dispute cycle, a practice might be left without ample capital. A merchant cash advance not only allows the physician to have adequate funding, but also provides a flexible payback option.
During lean times, a merchant cash advance lets physicians pay back a lesser amount compared to a fixed monthly payment. This can improve their cash flow and ensure they won’t default.
Not every lending situation is the same, so be mindful. However, for a physician prepared to conduct the proper due diligence, a merchant cash advance might be the best option.
For a quick and relatively painless underwriting process that doesn’t depend heavily on personal credit history and doesn’t require personal and business collateral, a merchant cash advance clearly offers advantages over conventional lending options. Instead of a fixed monthly payment schedule, here the payback option is flexible. And just as important, the practice can use the cash advance with fewer restrictions than a conventional loan might impose.
Physicians seeking a merchant cash advance loan must take care to use only reputable lenders who enjoy a professional reputation among other physicians and entities such as the Better Business Bureau. Moreover, they must be prepared to review the terms and conditions of every loan product and service to ensure that the fast and flexible funding option is truly a smart business decision to make. But as shown here, it could be the best solution they have.