Key Benefits of a Medical Practice Loan

By Ed Durant 

Members of the American Association of Endodontists have an extraordinarily valuable tool in helping them reach continued success – Medical Practice Loans. These financial solutions are designed to help endodontists and other healthcare providers expand their businesses, practices, and brands.  

These borrowed, fixed-rate funds can be used as capital to cover day-to-day business expenses. They can also be leveraged to improve facilities and patient experiences, purchase new equipment, and expand operations or add new services to a practice. Larger loan amounts can be used for more specialized purposes, including, but not limited to, partner buy-ins, partner buyouts, and practice acquisitions. 

Compared to other business financing options, endodontists will discover that Medical Practice Loans do not require any specific collateral to be pledged in conjunction with the borrower and do not require a down payment. The loans can have repayment terms of up to twelve years1, resulting in an affordable monthly payment, minimizing the impact on practice cash flow.  

As with any loan, the borrower is responsible for repaying the principal amount plus interest within a specific timeframe. 

Note: Medical Practice Loans are intended for established, high-earning healthcare providers. Those still in residency should consider alternative sources of funding to start a practice.  

Lender’s point-of-view

Lenders typically look for borrowers who are less risky and demonstrate an ongoing ability to repay the loan. Endodontist is an occupation that is highly regarded, respected, and critical to our communities. They have made sacrifices throughout their journey and are recognized for their superior work ethic, drive, and dedication. 

Plus, in the eyes of most lenders, endodontist practices have historically proven themselves to be, on average, lower risk, due to their high earning potential and ability to generate consistent, positive returns.  

Once a completed loan application is submitted, it is reviewed by the lender and its underwriters. The wait time for a credit decision is typically based on the relative complexity of a borrower’s financial situation and the specifics of the request.  This may include the number of partners in the practice, the purpose of the loan, and the size of the request. It is worth noting that approval is not a guarantee. 

For our part, BHG Financial and other lenders are held to high underwriting standards. A lender’s viability as an ongoing concern depends upon protecting against excessive delinquencies and losses. 

Endodontists should be prepared to demonstrate financial strength and the ability and propensity to repay debt to maximize the likelihood of approval and maximize the amount that can be borrowed. 

3 ways to use a Medical Practice Loan

There are three overarching reasons why an endodontist would obtain a medical practice loan. 

1. Practice development— To stay competitive in this evolving market, endodontists and all healthcare providers must develop their practices continuously. Medical Practice Loans can help upgrade patient services with features like online booking, online patient intake, live wait times, and extended hours. The funds can also buy or replace essential equipment, whether a new X-ray machine or top-of-the-line computer equipment. With this specialized financing, rented office space can be refurbished or upgraded in order to create a better experience for patients.  The loan can also potentially be used to create cash for a down payment on the acquisition of practice real estate.   
2. Practice expansion— A larger office generally generates more income and can improve the bottom line with the right strategy in place. Endodontists wondering whether expansion is right for them should consider these questions:  
   1. Will expansion help gain new patients?  
   2. Will loyal patients be retained while working through the transition?  
   3. Will expansion lead to economies of scale (higher production with similar staffing levels)?   
   4. Do you have a strong management team and reliable staff?  
   5. Do you plan to treat additional patients yourself or bring on another provider? 
      Note: These questions can serve as a starting point for weighing the benefits and drawbacks of expansion. 
3. Practice acquisition—A medical practice is a low-risk investment with high-income potential, but it’s almost impossible to predict when one will go for sale. That makes the market highly competitive—often involving parties like hospitals and private equity firms—and opportunities disappear fast. So, those considering buying a medical practice must navigate quickly and decisively while considering affordability.  Partner buy-ins and buy-outs are generally less widely marketed and often have better returns and lower total costs as a result. A partial investment can be a much lower-risk transaction than a total practice acquisition. 

What are the advantages of obtaining a Medical Practice Loan from BHG Financial?

Just like when patients turn to endodontists for specialized medical needs, the same can be said when someone is searching for financing. Choosing to work with a specialist comes with heightened benefits. BHG Financial has been working specifically with medical professionals since 2001. Healthcare is our heritage. We understand the unique needs of endodontists and can provide tailored loan solutions that speak to their aspirations and goals.  

Since our inception, we have originated over $19 billion in loans and funded over 170,000 customers. Our Medical Practice Loans are customized to support every stage of practice development. We offer loan financing up to $500,0001,2 coupled with extended terms of up to 12 years1, making the goal of acquiring or growing a practice more affordable.  

If you would like to learn more about BHG Financial’s Medical Practice Loans, click here.  

You can also view your personalized estimate in seconds without affecting your credit score by using our online payment estimator. 

Ed Durant is Chief Credit Officer with BHG Financial. 

1Terms subject to credit approval upon completion of an application. Loan sizes, interest rates, and loan terms vary based on the applicant’s credit profile. Finance amount may vary depending on the applicant’s state of residence. 

2BHG Financial business loans typically range from $20,000 to $250,000; however, well-qualified borrowers may be eligible for business loans up to $500,000. 

No application fees, commitment, or impact on personal credit to estimate your payment. 

For California Residents: BHG Financial loans made or arranged pursuant to a California Financing Law license – Number 603G493.