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Business Loans for Medical Professionals
Consider your business loan options as a medical professional here with Savvy and our reputable lending partners today.
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How do I get a business loan as medical professional?
Generally, it’s reasonably easy. Medical professionals are highly desirable customers for most business lenders, due to relatively high earning potential and the likelihood of their income being reliable on an ongoing basis. This means that a qualified medical professional generally has a lot of lending power.
There’s a multitude of different lenders willing to loan money to medical professionals for a variety of reasons and there are even some dedicated lenders who work exclusively in that area. When it comes to loaning money for a business practice, the options are generally just as plentiful – although it’s worth knowing that some lenders will require you to have been in business for three to five years to be eligible for some business loan products. As a general rule, though, a medical professional with a good credit rating will have their pick of lenders.
If you’re a medical professional on the hunt for a business loan, why not start your search with Savvy? You can easily compare a variety of loans from some of Australia’s best lenders, and quickly choose the one you prefer.
What different types of business loans are on offer specifically for medical professionals?
There are many loans on the market for medical business needs. If you’re buying a business property or even an existing medical practice, there are loans specifically catering for those needs. On a slightly smaller scale, there are also equipment finance options and fit out finance to refit a medical practice. Some of these options are from dedicated medical lenders, but many normal lenders also provide specific provisions for medical workplaces it their loan products. For example, some lenders offering fit out finance will offer more of the overall value of the fit out to an eligible medical professional.
There are also highly competitive business lines of credit which can be secured against a medical practice to provide a higher credit limit. Whether going with a dedicated medical lender or not, medical professionals can often get access to some of the best loan terms and rates on the Australian market.
Types of business loan
The most common type of business finance, unsecured loans enable businesses to access the funds they need without attaching an asset to the loan as security. Some lenders may allow you to borrow up to $500,000 and, because there's no collateral, offer same-day approval.
If your business already owns valuable assets, such as property or expensive equipment, you may choose a secured business loan instead. These loans may increase your borrowing power beyond what an unsecured loan can offer and, crucially, typically come with lower interest rates.
Business loans don't always have to be worth hundreds of thousands. If you're operating a small business and need a boost to help you keep on top of your expenses or expand your company, you may be able to take out a loan starting from as little as $5,000 and unlock further capital.
Just because you don't have all the required documents for a standard business loan doesn't mean you're out of options. Low doc finance enables you to use alternative documentation, such as other business financials, in the application process to access the funds you need.
A commercial line of credit allows you to draw from your loan account whenever your business needs access to their funds, instead of managing a lump sum and repaying it like a regular loan. This can add flexibility to your finance arrangement, providing money when you need it.
Invoice finance presents another option to business operators looking to free up cash through outstanding invoices yet to be paid by their customers. Your invoice finance can either be invoice discounting or factoring, which present different options when it comes to your invoices.
A common reason for seeking out a loan is to purchase commercial equipment. You can do this either with an unsecured arrangement or one with the equipment itself as collateral, with the latter potentially increasing your borrowing power and lowering your interest rate.
With this finance, when your business purchases product, your supplier provides an invoice which you send to your financier and pledge to repay by a set date. From there, your supplier sells the invoice to your financier at a discounted rate, while you repay the full amount to your financier.
Under an inventory finance agreement, your lender pays your supplier directly for inventory, which allows it to be signed off and sent to you. From there, you can pay off your debt within a pre-determined period to your lender, which may be longer than the regular debtor period.
An overdraft facility is attached to an existing financial account belonging to your business, such as a transaction or savings account, and enables you to borrow up to a set limit after the account’s balance reaches zero. These overdrafts are repaid with interest, but only on what you use.
You may simply be in a position where your business needs a boost to its cash flow. If this is the case, there’s a range of stop-gap solutions which may be suitable for your situation, from standard unsecured loans to specialist cash flow loans, invoice finance or even an overdraft.
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How to get the best rates on a medical business loan
Protect your credit rating
An excellent credit score often means excellent terms on a loan, so it’s worth taking care to keep your credit rating as healthy as possible. It’s worth doing a little homework on this, as getting excellent credit means more than just paying bills on time.
Having too much available credit, for example, isn’t always a good thing.
Offer security on the loan
Offering a significant asset as security on a loan will generally bring much better interest rates. It’s worth remembering that this doesn’t have to be a property – a large piece of state-of-the-art medical equipment could potentially act as collateral as well.
Have evidence of steady business at the practice
Evidence that your business is doing well will generally mean better terms on a loan – lenders are generally quite happy to lend to a well-established business with good cash flow.
Shop around for the best base rate
Lenders offer different rates and terms, and to get the best rates it generally pays to shop around. Using a comparison website – like Savvy – to quickly compare a range of business loans and their respective interest rates is a great way to get started on the hunt.
Frequently asked questions about loans for medical professionals
Yes – business loans, equipment finance and hire purchase loans allow for the purchase of highly specialised equipment. This is one of the main advantages of loan products like equipment finance. Even a chattel mortgage – which uses the equipment as collateral – can still be used to buy specialised technology for medical professionals, provided the equipment is still valuable in financial terms. It’s a question of market value, not how specialised the equipment is.
For dedicated online lenders and financial institutions that work electronically, information security is a critical, core part of their business. Most Australian lenders use highly secure encryption technology on their websites, meaning your information is well protected when you do an online application. The main security threat is normally from scams – so be wary of unsolicited messages from any lender and contact your lender directly if anything seems suspicious. Also, be careful what information you send via email, as this normally isn’t as secure. You can ask your lender if you have any questions about online security.
No – it’s generally much simpler if you’re an Australian citizen or permanent resident, but you can still get a business loan if you’re not. You’ll probably need to be on a Business Innovation and Investment (Provisional) visa (subclass 188) though, allowing you to take part in business and investment activity within Australia.
Potentially, yes – a deposit might not be needed in many cases: an unsecured loan, for example, doesn’t require a deposit or collateral. If you’re in a position to offer a decent deposit, it can improve lender confidence, which generally translates into lower rates and better terms. You can discuss with your lender what benefit a deposit might offer.
Yes – business loans and equipment finance allow for the purchase of second-hand equipment. If you’re also using it for collateral, there might be a few more hoops to jump through to establish its market value, but there’s usually nothing to prevent you from buying medical equipment from another practice.
Generally, you can – although some lenders charge substantial fees for doing so. It’s worth double checking what fees your lender charges for making early repayments and for early settlement and if you want paying the loan off early to be an option, it’s worth checking this before you choose a lender. You should preferably choose one that charges no fees for that.
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