3 Reasons Medical Practices Are Using Asset Based Lending
More medical practices are turning to asset based lending as a renewable source of working capital. Having access to asset based lending provides an alternative to traditional short-term loans. But what are the real advantages?
What Is Asset Based Lending For Medical Practices?
Asset based lending is a revolving line of credit structured around the value of property owned by medical practices. “Property,” in this case, can mean everything from real estate, machinery, specialized equipment, vehicles, inventory, receivables, and more. The important part is that assets must be owned to qualify. Leased real estate and equipment are not considered assets, and therefore cannot be considered for this financing program.
A Revolving Line Of Credit
As mentioned above, asset based lending provides a revolving line of credit structured around assets owned by medical practices. Equipment, vehicles, receivables, and more are all analyzed to determine the spending limit on the line of credit. Instead of taking funding in one lump sum, as with traditional loans, you can access working capital as needed. Instead of going through the hassle of introductory credit cards or using secured credit, asset based lending allows medical practices to sidestep the red tape and go directly to revolving lines of business credit.
Building Up Credit Ratings
Building strong credit ratings can be difficult when medical practices are still paying off their initial loans. As with any revolving line of credit, using it and then repaying the balance will boost credit ratings. Increased credit ratings mean access to larger financing at better rates. This comes in very handy when medical practices are looking to purchase new equipment, move into larger facilities, or acquire another practice for growth.
Asset Based Lending Grows With Medical Practices
As medical practices grow or make improvements, the spending limit on asset based lending also increases. If a practice purchases new equipment, acquires additional assets through a buyout or merger, or sees growth in their receivables, asset based lending will reflect those changes with an increased spending limit. Having a line of credit through asset based lending is one of the few financing solutions which actually promotes growth for medical practices.
Get The Financing Your Practice Needs
If you own a medical practice, and need an extra source of working capital without taking on extra debt, contact North American Commercial Capital. We provide asset based lending, as well as a wide range of financing solutions to medical practices across the country.