How to Finance Your Private Practice - An Overview of Funding Options
Are you looking to start your own practice and wonder how you could afford it? Starting a private practice requires a substantial amount of start-up investment, which will then pay off in the long run.
You will have to buy things like medical equipment, office furniture, and pay the bill for the office space.
There are several funding options available if you don’t have the start-up capital sitting in your account (as most people don’t).
An Overview of Funding Options
Funding Options for Starting Your Private Practice:
Line of Credit
A loan that gives you access to a specified credit limit; property used as security, withdrawals can be made up to the agreed limit
Overdraft
Similar to line of credit, but attached to an existing account; once you have withdrawn all the funds from that account, the overdraft kicks in until a specified limit is reached.
Chattel Mortgage
This is when a finance company provides funds to you to purchase an asset (e.g. medical equipment) and also takes out a mortgage to secure the loan; you make regular repayments and gain full ownership and title to the asset once the entire value is paid off
Finance Lease
This is an arrangement between the lessor (owner) and lessee (user) where the owner rents an asset to the used for a period of time; the user then pays rent throughout this period; what happens at the end depends on the agreement, but ownership transfer to the user is possible
Which one of these options you pick depends on your personal circumstances and is usually contingent on your wealth, credit rating and income.
Each of these finance options have their advantages and disadvantages. It is important you decide which one is best for you, to start up your practice right and set a healthy financial standard from the very start.
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