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Medical Practitioners - Where to Go to Obtain Working Capital
If you are like most medical practitioners you are constantly balancing business objectives and strategies with working capital availability. Whether it is having the capital for a new piece of equipment, office renovations, or opening up a new location most practitioners are faced with the same challenge; where can I get the sufficient funds to fuel my business?
Bank Loans - Banks have the money but typically won't lend to the medical practitioners that really need it as these individuals have already sunk a good portion of personal cash and credit into their business and are viewed as highly leveraged.
Venture Capital - While this is a viable option, most venture capitalists desire investments in the $1 million plus range. Furthermore, these types of investors require equity ownership and, in many cases, control of the business.
Friends and Family - This option is always an alternative, but I have found it to be extremely risky. Besides the fact that often friends and family expect too much and contribute too little, mixing business with friends and family can be a dangerous formula.
New Alternative for Medical Practitioners - The Electronic Payment Advance
Assumption: A medical practitioner generates $4.2 million in annual gross revenues.
Qualification: Practitioner qualifies for an advance of $155,400
Payback: Practitioner will pay back $214,452 or $1.38 per $1.00 advanced. While the "best practice" electronic payment advance providers will determine a daily fixed percentage payback that will not hurt your business' operating cash flow, the typical payback is 10% of daily gross revenues with a payback occurring over a six month period.
Medical practitioners are finding that the electronic payment advance is a viable working capital alternative as it is quick to close (receive funding within ten business days), with limited paperwork and no personal guarantee or asset collateral required. If you are considering an electronic payment advance I encourage you to carefully research your provider, taking into consideration factors such as track record, customer service and understanding of the medical practitioner business model. Additionally, look to partner with a working capital provider that has extensive knowledge on other products to provide you with other funding alternatives for comparison purposes.