What does a physician do if he has to grow his practice or acquire highly costly medical equipment? Does he use a home loan, mortgage loan, or personal loan, or does he have access to a loan that is suited to his professional needs, or does he know what a professional loan means? Several financial firms currently provide funding for healthcare finance.
Healthcare finance is a new credit product given by banks and non-banking financial institutions to physicians, medical professionals, limited liability businesses, private hospitals, eye and diagnostics centers, pathology labs, nursing homes, and medical and dental universities. It is given with equipment collateral and a personal guarantee. Specialty clientele like skin and dentistry clinics are also eligible for healthcare finance.
How long it take to get a loan?
The applicant must complete the loan application form and provide the required documentation. The necessary documents include professional qualification certificates in the case of doctors, a minimum of three years of work experience in the relevant healthcare field, details about the funding requirement/project report, the most recent three years of income tax returns, the most recent six months of bank statements, a track record of previous loans if availed, a proforma invoice for the equipment to be purchased, and the desired know your customer documents.
Anyone seeking a loan will be required to provide a guarantor as insurance against default and should also know what a professional loan meaning is. If the borrower is an individual promoter, a private limited business, or a partnership firm, the latest three years’ audited balance sheets and profit and loss statements are required. A personal company must submit a copy of its memorandum of association, whereas a partnership firm must attach a copy of its partnership agreement.
Five things to know about healthcare finance
Loan amount and duration
Typically, the maximum loan amount cannot exceed 80 percent of the cost of medical equipment. Certain financial institutions may provide up to 90 percent of the loan amount, depending on the customer’s financial standing. Loans are also available for the acquisition of used machinery. In this instance, the equipment is appraised by a third party. Approximately 65 percent of the loan amount may be supplied to the borrower based on the appraiser’s report.
Insurance rates and interest rates
These loans have an average annual interest rate of 14 percent. Do not forget to negotiate the interest rate for a better bargain. You will need fire and burglary insurance to safeguard the medical equipment from damage or loss.
Disability Insurance
For many medical professionals, opening their practice is a significant objective. However, investing your time and money in private practice might leave you with little funds, making disability insurance necessary for medical practitioners.
For young physicians and other healthcare professionals, their peak earning years lie ahead. If they were to lose their capacity to work, they would face an uphill struggle with debt to pay off and a reduction in income. Doctors, surgeons, and other healthcare professionals may protect themselves financially against this worst-case situation by purchasing disability insurance.
Robust Estate Plan
Your profession is challenging, but it does not excuse you from establishing a strategy to safeguard your legacy. From defining what will happen to your private practice after your death to guarantee the well-being of your spouse and children, healthcare professionals must have a comprehensive and well-defined estate plan.
Additional charges
The processing cost on these loans is typically one percent of the entire amount borrowed. This price is a one-time, non-refundable payment. Some financial organizations additionally assess a prepayment fee if the loan is repaid before the end of its term.
Before obtaining a loan, a borrower must examine the interest rate, extra fees such as processing fees, prepayment penalties, late payment fees, necessary papers, approval time, and loan length.
