Chiropractors and chiropractic clinics are an essential part of the medical community. Unfortunately, back, muscle and joint pain are symptoms that almost all of us will experience at some point. However, something else that can cause a lot of unwanted stress, particularly for chiropractic business owners, is the lack of proper funding to keep your facility up and running.
That’s why, for the success of your chiropractic clinic, a good business loan might be the perfect solution. In fact, a business loan can be used in a number of ways including renovating your workspace, buying the latest chiropractic therapy equipment, and hiring qualified staff members. No matter what expense you need to take care of, with the right business loan, you’ll be able to get the job done.
Every good chiropractor needs a properly funded clinic where they can practice their craft. As a matter of fact, a clean, stable chiropractic office goes a long way in the eyes of many patients. However, as we mentioned, affording such a space definitely requires the appropriate financing. Simply put, no decent medical facility is cheap to maintain. So, if you’re a chiropractor or you simply manage your own chiropractic clinic, a business loan may be the most effective financial tool you can find. It is a versatile form of credit that can be used to fund your business in any way you want.
Considerable physical and financial effort must go toward the success of any business, let alone one that’s part of the medical community. Most modern medical equipment certainly costs a pretty penny, which can be especially hard on those attempting to fund their practice privately. This is where a business loan can help. A business loan can be used to:
Cover Payroll Expenses
Running a chiropractic clinic requires both experts and regular employees. You may need a chiropractic associate, an experienced chiropractor, a manager, a cleaner, a front desk representative and more. The payroll of all these employees can easily be hundreds of thousands of dollars. Unfortunately, if you’re experiencing cash flow shortages, skipping payroll payments is not usually an option. Instead, a business loan can help inject cash into the business and help boost cash flow.
As mentioned, outfitting your practice with the latest chiropractic equipment such as traction tables, ultrasound machines, and x-ray units can be difficult to afford upfront. A business loan can help finance these costs, plus, specialty furniture for your patient waiting room such as ergonomic chairs, back supports/lumbar cushions and more.
Numerous supplies and tools are required to run your business. You’ll need to buy all the right chiropractic tools, supplying your whole office with paper, pens, printers, telephones, fax machines, desks, chairs, lamps, and computers. You’ll also need to buy proper uniforms, lab coats, and other medical attire.
A business loan can also provide your chiropractic clinic with the funds it needs to remodel or improve your workspace. Moreover, if you want to move into a larger workspace or expand your business by opening up a second location, a business loan can help fund that as well.
Credit Score – One of the most common factors lenders use to evaluate your eligibility for a loan is your credit score. Most lenders check both your personal and business credit score to understand your ability to repay debt.
Time in Business – In general, lenders will be more reluctant to lend to start-ups or businesses with less than a year of experience. However, depending on the alternative lender, you may be eligible if you’ve been in business for at least 3 – 6 months.
Revenue – Many lenders will have a minimum monthly or yearly sale revenue in order to be eligible for a loan. Your revenue is typically considered to measure your capability of handling debt.
Cash Flow – Positive cash flow is necessary for businesses to pay their current expenses and debt. Businesses with a history of poor cash flow can be a red flag for lenders as it means your business expenses outweigh your revenue.
Assets – Some lenders will require you to provide collateral to qualify for the loan. In such circumstances, you’ll need to provide documents to verify the value of your asset.
Business Plan – Some lenders may request you provide a business plan if you don’t have a lot of financial history. A business plan lets lenders better understand your plan and ability to repay debt.
What to Consider When Getting a Business Loan?
Lender – When choosing a lender to work with, it’s in your best interest to find someone with a solid reputation and good customer service. As a borrower, you’ll be working quite closely with your lender, so it’s important you find someone you trust and can work with. Moreover, it’s beneficial to find a lender who’s an expert in the medical industry as they’ll be better able to guide you and recommend the best borrowing options for your business.
Interest – The biggest contributing factor to the cost of your loan is your interest rate. As such, it’s crucial you compare rates and obtain quotes to get the best rate.
Fees – Before agreeing to the terms of your contract, be sure to review the details regarding the fees. Be sure to ask about origination fees, administration fees, as well as potential fees like NSF fees, late payment fees, and prepayment fees.
Term Length – It’s usually wise to choose a short term that you can afford over a long term that provides you with overly affordable payments. The reason being, the longer your term, the more expensive your loan will be as you end up paying a lot more interest.
Loan Amount – Moreover, borrowing more than you need can lead to excessive debt and unaffordable payments, which can negatively impact your credit.
There are many different types of financing options available in Canada, each with its own strengths and weaknesses. Depending on your business needs, one option may be better suited for you than the other.
Merchant Cash Advance
If you have a fairly consistent flow of revenue through card sales, a merchant cash advance can be a great form of financing for your chiropractic business. In exchange for a percentage of your future card sales, you’ll receive a lump sum of cash. This form of credit can be particularly convenient when you’re in urgent need of cash as you don’t need much to qualify. However, while it provides fast access to cash, it is an expensive way to borrow.
Business Line of Credit
As previously mentioned, chiropractors require a variety of tools and supplies to run their business. Unfortunately, cash flow shortages and unexpected major expenses can make it difficult to afford. With a business line of credit, you’ll have a reserve of cash that you can withdraw against to cover such expenses at any point in time. Moreover, a business line of credit has a greater credit limit than a credit card and you only have to pay interest on the amount you use.
If you’re looking to finance an expensive piece of chiropractic equipment, then you should consider using an equipment loan. With an equipment loan, you can generally finance up to 80% of the equipment’s value, meaning, you’ll need to pay for the other 20% upfront. Moreover, unlike a business loan, an equipment loan secures itself against the equipment you purchase, making it easy to qualify for. Due to the security it provides, you have the opportunity to qualify for large amounts and for a lower interest rate, even if you have bad credit.
Will my personal credit affect my ability to get a business loan?
Generally, lenders evaluate both your personal and business credit. However, if you have a solid business credit score and outstanding financials, your lender may not require a personal credit check. Unfortunately, if you’re a new or young business, lenders will put additional focus on your personal credit, as that’s their main way of gauging your ability to repay debt. As such, if you have a bad credit history, it will affect your ability to get a business loan.
How do I get a good rate on my business loan?
Comparing lenders and obtaining quotes is one of the simplest ways of understanding your options and ensuring you get the best rate for you. Additionally, you can work on improving your credit, debt level, cash flow, business plan, and other factors lenders evaluate. You can also get a better rate by securing the loan with an asset or by providing a personal guarantee.
How long can I finance my chiropractic clinic?
Depending on how much you’re borrowing and which lender you choose to work with, the length of your business loan term will differ. In general, a short business loan term can range between 2 and 5 years, while a long term loan can be anywhere from 5 to 10 years.
Get The Money Your Clinic Needs
Being the owner of a chiropractic clinic, you’re probably balancing several plates at all times. With an affordable and convenient business loan you can rest easy knowing your finances are in order.
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