Which is the Better Financial Option for My Medical Practice: A Physician Loan or Medical Factoring?

Last Updated on March 12, 2016

From a patient’s standpoint, their doctor is a caregiver. To the physician’s financing partner, however, he or she is a business owner. When doctors -and their businesses- require additional working capital, they generally have questions about two possible financial options they may have heard about: Physician loans and Medical Factoring.

For many physicians, a particular source of financial stress is the gap between insurance company payouts and when that money will be received. Slow paying medical insurance claims mean that the money needed to run the practice, pay staff salaries, to lease or to buy medical equipment, etc., must be drawn from their working capital. Not having sufficient cash flow is the primary reason doctors seek additional financing.

Similar to a bridge loan to homeowners, Medical Factoring is at best, a stop-gap measure. It offers only a 30, 60, or 90-day financial solution by which time the entire amount borrowed plus interest must be repaid. It is not advisable from several standpoints but particularly for accounts receivable scenarios when physicians have no set date by which insurers will pay medical claims. If the insurance payouts have not been received by the specified financing repayment period, the interest and penalties will create additional debt for an already financially-taxed practice.

Sound Financial Solutions for Every Practice

Given the specific reason a medical practitioner may be seeking financing, Physician loans as well as Equipment Financing are far better options. Here again, the financial product as well as where the financing is obtained makes a big difference. While traditional banks offer these options, their turnaround is far longer and requires more documentation than the same financing options obtained through alternative financing companies.

National Business Capital is a leading alternative financing company. Our goal is to establish long-term financial relationships with our clients. We take a personal interest in our clients’ businesses and want to assist them to obtain the working capital their enterprise requires at every stage of its success. Talk with our Business Consultants about Physician loans with terms up to 36 months or Equipment Financing from 2-5 years to determine which is the right option for your business right now. We can also advise you about Small Business Loans and a Business Line of Credit as well. If you have questions please call us at (888) 888-9124 or apply online.

National Business Capital & Services is the #1 FinTech marketplace offering small business loans and services. Harnessing the power of smart technology and even smarter people, we’ve streamlined the approval process to secure over $1 billion in financing for small business owners to date.

Our expert Business Financing Advisors work within our 75+ Lender Marketplace in real time to give you easy access to the best low-interest SBA loans, short and long-term loans and business lines of credit, as well as a full suite of revenue-driving business services.

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About the Author, Megan Capobianco

Megan is passionate about helping business owners along their journey - providing them with relevant content they can use in their day-to-day operations.

Disclaimer: The information and insights in this article are provided for informational purposes only, and do not constitute financial, legal, tax, business or personal advise from National Business Capital & Services and the author. Do no rely on this information as advice and please consult with your financial advisor, accountant and/or attorney before making any decisions. If you rely solely in this information it is at your own risk. The information is true and accurate to the best of our knowledge, but there maybe errors, omissions, or mistakes.