Pharmacy and healthcare practice loans are a hot topic. They allow new veterinary, dental, medical, optical, and pharmacy practitioners, those who are relocating, expanding, or refinancing their pharmacy or practice to do so in an economical way. However, knowing which rates, terms or conditions are best for your particular specialty takes due diligence!
1. Shop Around
Different lenders will offer different options for pharmacy or healthcare practice loans—some may be perfect for your unique situation, others may be a bit less ideal. While it’s tempting to use the bank across the street from your pharmacy or veterinary practice, the bank you have your home loan with, or the bank that you have been frequenting since you got your first job, the bank or lender that ultimately provides the commercial loan for your business can make or break your success. This is especially true in the fields of dentistry, veterinary services, medicine, optometry, and pharmacy. A number of different options exist for specialty healthcare practice and pharmacy loans, and you want to find the best one possible. Consider not only calling around or looking on the internet, but going in person to see what your options are with local banks. There are a number of different options, and even if you do your banking with a local bank, they still may not provide the appropriate financing that you need. By doing your homework, you may save yourself a lot money and wasted time!
2. Make sure to use the right borrowing tool
A loan is a loan, right? Not necessarily. There may be different options for those who are seeking to expand their dental, veterinary, medical, optical, or pharmacy facilities, incorporate new technology, or accommodate temporary increases in spending. No matter what your financial needs are, making sure that you understand and are able to communicate these needs with your lender will help you to secure the right type of loan for your needs, at the best interest rates, terms and conditions available.
3. Try to cover your operating costs with income
A high rate working capital loan or line of credit can be a great temporary solution to relieve a cash flow crunch, but running on a constant line of credit can quickly kill your pharmacy or practice cash flow. Constant borrowing to make ends meet is never a good idea for a household, and it is just as unadvisable for a business. There are always exceptions, but in general, try to make sure that your pharmacy or practice’s revenue is adequate to cover your basic daily operating costs. Save your loans and credit lines for big expenditures and you will see greater returns.
4. Make sure your benefits outweigh your costs—and interest!
Business expenditures can have excellent returns—are you considering implementing the newest technology or building your dream pharmacy or veterinary, dental or healthcare practice that can accommodate twice the number of patients? Before diving in, consider the expected returns and the cost of interest on your pharmacy or practice loan. While our pharmacy and practice loans have some of the best interest rates around, if your costs are still going to exceed that amount, you may be better off waiting until the technology becomes less expensive. Take off the white coat, put on your business glasses, and work some numbers to determine just how much your investment will really pay off before committing yourself.
5. Stay on top of paperwork and accountability
Many business loans for joint pharmacists and healthcare practitioners include a clause of “joint and several” liability, which means that the business as a whole, as well as individual partners, are all liable for the loan. This means that every medical, optical, dental, veterinary, or pharmacy specialist will be jointly responsible for this loan. What happens if one of your partners leaves the firm? While that partner is still liable, the practice as a whole maintains liability as well, which could leave the remaining healthcare professionals in a tight situation. Read your documentation carefully and put into place a strong contingency plan that will allow you to be prepared in the event of anything that may occur.