Chiropractic Business Loan: What are your options

Whether you are just starting out with your chiropractor practice or you want to grow your practice, you need to know what your financing options are. By understanding your various options, you can consider which option will work best for whatever you need the money for. There are some limitations with certain loans that you need to be aware of when you seek funding. This article will take a look at everything that you need to know about a chiropractor business loan.

Chiropractic Loan Options

Sometimes an alternative lender can be the best solution for chiropractors. They can provide funding for various things, including working capital loans and chiropractic equipment. Finding a chiropractic alternative funding solution that best meets the needs of your chiropractic practice can really help you through difficult times or help you grow and expand your practice. Alternative financing offers the fast cash solutions that you need. But which option is the best one for your business? This section will take a closer look at your different alternative financing options.

Business Line of Credit

You can get a business line of credit either from a traditional bank or from an online alternative lender. This is a great option to consider for your funding needs. These are easier to access than a term loan and operate more like a credit card than a traditional loan. When you get a business line of credit, you get a specific amount of money. However, you don’t have to necessarily use it right away. You can use it a little at a time, paying back interest only on the amount you have used. Once you pay it off, you have it there whenever you need it.

This is a great option because it allows you to always have financing available when you need it, as long as you haven’t used it up. The fact that you only pay based on what you use, not the entire amount of the line of credit, makes it even more appealing. This money can be used for whatever you need, whether you need new equipment or some funding to get you through a slow period.

Online Loans/Online Marketplace

Online lenders offer business loans that are similar to what you would find at a traditional bank, such as lines of credit and term loans. There are some significant differences between these two options. One way is because online loans usually have less strict requirements when it comes to your revenue, how long you’ve been in business and your credit score. Online loans make the loan application process easier, and you get a faster response on your application which means you get your money faster.

The thing that you need to watch out here is that while you get ease and convenience when applying for these loans, you will also end up paying higher interest rates.

Term Loans

Also referred to as “installment loans”, a term loan is the standard type of loan that you would typically get from a traditional bank or credit union. This type of financing gets its name from the fact that the loan is repaid over a specific term as agreed upon before getting your loan. This term is typically up to 6 years and has either a fixed or variable rate for interest.

These days, you don’t just need to go to your bank or credit union to get this type of loan. Thanks to the Internet, you can actually apply for these loans online directly from the lender or use an online marketplace to get matched with various loan options so that you can choose from the list. With the more modern choices, you get the ability to customize your options, giving you a really flexible solution for your needs.

Short-Term Business Loans

Short-term business loans are a type of alternative funding that you get from an online lender. These have shorter repayment terms, usually only about a few months or a year, which can make them appealing for some businesses. Short-term loans do have some significant differences when compared to traditional term loans, such as:

• Payments are made more frequently, sometimes daily.
• There is a higher cost of the loan, which is between 10% and 60% of the amount you borrowed.
• Lender is more focused on your daily cash flow, not so much your credit score.
• You can get funding within a couple of days.
• Rather than interest rate, these loans use a factor rate fee structure.

There are reputable short-term lenders that you can find, but you really need to be careful. There are a lot of predatory lenders who fund short-term loans, but they will charge massive fees. Be sure that you look at the fine print and only work with a reputable lender.

Merchant Cash Advance

A merchant case advance can be very similar to a short-term loan. This is because they are easy to obtain, can be more expensive in the long term than other loans, and offer a factor rate fee structure. This isn’t necessarily a loan; this is merely an advance on any of your future earnings. The lender will front you a specific amount of money, then will take a percentage of your daily credit card sales to get that money back with interest. What this means is that as you get more sales on one day, you will get more money taken out. This helps compensate for those days that you may not have made as much.

You won’t usually find a specific term or deadline for paying back a merchant cash advance. They will just continue to take money until they are fully repaid.

Personal Loans

If you are just starting out in the industry or just haven’t been a practice for that long, it can be hard to obtain a traditional business loan. There are some personal loans that you can use for the purpose of your business. These loans are usually structured in the same manner as other installment loans. To get these loans, the lender will determine your eligibility and your interest rates based on your household income and your creditworthiness.

The downside with this option is that you usually have access to less money, as personal loan lenders usually cap the borrowing amounts at between $35,000 and $50,000. If you require more money than this amount, you will want to consider other loan options for your practice.

Business Credit Cards

Business credit cards are useful to have on hand because this gives you access to money when you need it. You are able to use these cards to pay for various items that you need for your business. Even if you don’t necessarily need the funds right now, it’s always a good idea to have a business credit card that you use for your practice so that you have access to the money whenever you need it.

It’s important that you do take the time to select the right business credit card for your business. You want to pick an option that offers the best rewards (such as cashback or airline miles) for the purchases that you will most likely make for your practice. There are some business credit cards that you can benefit from charging any expenses that you have for business travel. Other cards may offer great rewards for purchasing office supplies or paying your utilities. Some credit cards offer a 0% APR introductory rate for your first year. Take a close look at what your practice needs and what these credit cards offer you.

You should know that business credit cards often require you to have good or excellent credit to get one.

Microloans

Microloans are a type of alternative funding that are usually no more than $35,000, but more likely between $5,000 and $10,000. These loans are offered with a lower interest rate. Microloans generally are offered to startups or new businesses that need working capital. Traditional bank lenders don’t usually like to offer such low amounts of money, which is why alternative lenders used to be the only place you can get this type of loan. However, due to their popularity, more and more traditional lenders are starting to offer microloans as well.

Crowdfunding

Crowdfunding is becoming an increasingly popular funding option for businesses in any industry. With crowdfunding, your practice can raise money from peers online. There are different crowdfunding types that you can consider. One option is reward crowdfunding, which means that you don’t have to pay back the money. Instead, you offer something in return for the donation such as a coupon for services. When you use equity-based crowdfunding, you are giving up a share of your practice in exchange for the money.

You can find various crowdfunding sites that you can use to help find funding for your practice. Every crowdfunding site has its own strength when it comes to finding peers to give you money, so choose the crowdfunding site carefully.

Small Business Administration (SBA) Loans

The Small Business Administration is a government-backed organization that was meant to help small businesses get the help that they need to be successful. As far as SBA loans are concerned, these loans are partially guaranteed by the SBA which makes it less risky for the lenders. What this means is that if you happen to default on your loan, the SBA will repay some of this debt. This also means that the lender will offer you lower interest rates than they would if the loan wasn’t backed by the Small Business Administration.

There are a couple of different options with the SBA loans. The most popular SBA loan is the 7(a) small business loan. You should know that it can take potentially several months for your loan to be processed and to receive your money after approval. There are also some strict requirements that you need to meet in order to increase your chances of qualifying for an SBA loan. These requirements include having good credit, being in business for at least 2 years, and a down payment on your loan. You may also be required to put some collateral up for your loan.

Invoice Factoring

This is a type of alternative financing lets you get fast cash using your outstanding invoices. You will work with an invoice factoring company, which will buy your unpaid invoice. They will usually pay between 85% and 95% of the invoice value. The factoring company will then collect the payment of the invoice and send you the remaining amount, minus the percentage that they are taking (between 1% and 5%). The factoring fee is sometimes determined by how long it takes for the patient to pay the invoice.

If your practice often has unpaid invoices, this can be a great option to consider to ensure that you get your money. You can sometimes pay a significant fee for invoice factoring, but this can be worth it when you need a solution to a cash flow issue as soon as possible. This can be especially convenient if you don’t want to keep chasing after patients who are delinquent with their payments.

Your credit score isn’t necessarily a concern for invoice factoring companies, as they are focused more on whether or not your patients can pay their bills.

Invoice Financing

Invoice financing is often easily confused with invoice factoring, but these are not the same thing. Invoice financing requires a financing company to give you a line of credit based on your unpaid invoices, which is used as collateral. The amount of your line of credit will depend on the value of your unpaid invoices. The major difference is that an invoice factoring company will collect the payment for you, but with invoice financing, you still need to collect the payment yourself.

Equipment Financing

Equipment financing is money that you get for the specific purpose of buying the equipment you need for your chiropractor's practice. Whether you need some computers to run your business or you need some new equipment, this is a great option to consider. There are different types of equipment financing. With some options, you are merely leasing the equipment. You pay on equipment for a specific term and then after this term, you could choose to buy the equipment, or you can begin a new lease with a newer model of equipment.

Another option is an equipment financing loan. With this option, you are paying towards ownership of the equipment, and you can count it as an asset. If you are leasing the equipment, this doesn’t count towards your assets. In both cases, failure to make your payments on time will result in the equipment being repossessed.

Business Grants

Another option that you can look into are grants that are specific to your industry. You may be able to find grants that can offer you funding and help with starting or growing your practice. The great thing about grants is that this is free money. You don’t have to pay this money back, unlike if you went with one of these other loan options.

How to Select the Best Loan Option for Your Needs

Now that you understand your options, how do you choose the best one for your business? There are some things that you can consider to help you decide which is the best approach for your specific needs. This section will take a closer look at tips for selecting the best loan for your practice.

How Soon Do You Need the Money?

One of the first questions that you should ask is how soon you need your money. This is important because some options offer immediate access to cash while other options you will have to wait for. If you need a more immediate solution, you will need to consider options like business lines of credit or business credit cards. If you have some time to wait, you can try SBA loans or other traditional loans.

How Much Do You Need?

Another crucial question is how much money you actually need. There are some options that are better than others if you need a lump sum of major cash. Do the math and get an accurate count on how much you really need. Then choose the option that will be the most likely to get you that amount of money.

Which Repayment Plan Can I Afford?

You never want to get a loan that you can’t afford to pay back. Think about what you can afford for payments, then use this as help when deciding on your different loan options.

Conclusion

Finding the right financing solutions for your practice can be difficult. The good news is that you do have options available to you, depending on what your specific needs are. The goal of this article is to help you get a better understanding of financing for a chiropractic practice as well as what options are available to you. By having this information, you are going to be better able to make an informed decision as to which funding options will work best for your situation and needs.