Consolidate Your Business Debt to Grow Your Practice
The appropriate healthcare practice financing is essential to helping dentists, doctors, and veterinarians achieve their goals of practice growth. Unfortunately, debt accumulation may be a lead weight that, if not properly managed, could derail the dream of practice ownership and growth for some practitioners.
If you are like many healthcare practitioners, you may have first taken out loans to finance your education. Later, you may have borrowed again to finance your dreams of owning a practice. With business growth, you may have sought financing for equipment, expansion, or a new office location.
These are smart business investments, but the challenge comes with understanding the best way to manage a variety of loans with varying rates and terms.
Manage Your Healthcare Practice Debt
Consolidating your loans and business debt may help balance the load. Loan consolidation simplifies your monthly payments. Plus, by paying interest on one, albeit larger loan, you may have more flexible cash flow which allows you to reinvest money into your business.
Reducing your number of monthly loan payments may give you opportunities to fund practice improvements. Business enhancements can lead to increased employee job satisfaction and improvements in patient care.
Your investment has short- and long-term benefits.
Additionally, reinvesting in your healthcare practice may allow you to take advantage of IRS section 179 tax credits. Extra cash flow can also provide funding for your retirement account. Consult a tax advisor or trusted financial planner for the best guidance for your specific situation.
Tips for Loan Consolidation
Search for debt consolidation opportunities that include lowering your interest rate and monthly payments without increasing the overall term of your obligations. Consider the following tips when consolidating your loans:
- Choose a lender who understands the ins and outs of your business and has loans that meet your needs.
- Assess and manage your personal credit before you approach a lender. Even if you have good credit, an increase in credit activity, even personal credit, can affect or stall your business loan process.
- Before applying, carefully consider whether consolidating your existing debt is the right choice for you. Debt consolidation means having a single payment. However, it may not reduce your overall debt or pay it off sooner. Your new payment reduction may be the result of a lower interest rate, a longer loan term, or a combination of both. Extending the loan term may mean you pay more in interest over the life of the loan. Understanding how debt consolidation benefits or affects you puts you in a better position to decide if it is the best option for you.
- Do not submit multiple loan applications during the approval process. This results in repeated credit checks in a short period of time. A lender may consider you a credit risk if you have taken on too much recent debt or if you have been rejected by other lenders.
- Stick with a fixed-rate loan to help you balance cash flow since you will know the monthly payment. Evaluate the benefits of both fixed and variable interest rates to your business situation.
- Consider the length of your loan term. Generally, practice loan terms are 7-10 years. A longer term adds additional interest expenses over the life of the loan.
- Ask your trusted financial consultant for help reviewing any loan information.
With careful consideration for consolidating your debts, you may open up vast potential for your practice, possibly allowing you to grow your business and save money!
At LenDRgroup Consulting, our team cares about the long-term success of your healthcare practice. Our practice financing and business consulting services are customized to meet the needs of your business and your career.
We built a lending platform with 300+ dental and healthcare-specific lenders with the purpose of helping dentists, veterinarians, and physicians. Achieve practice ownership and eliminate your practice financing obstacles!
To date, we have helped hundreds of medical professionals expand and grow their practices. LenDRgroup Consulting recognizes and understands your business needs and can help you avoid costly mistakes. So, let’s get started.
Contact us today for a one-on-one consultation.