YOU ASKED: Can you borrow — for investment purposes — against the value of your practice?
WE ANSWER: Practice equity loans do let you borrow against your business’s equity. This can fund various ventures, from expanding your practice to investing in new technologies or external opportunities.
How It Works
- Valuation: Determine your practice’s market value through a professional financial audit and appraisal.
- Loan Amount: You can typically borrow a percentage of your practice’s appraised value, depending on factors like creditworthiness and financial health.
- Terms and Interest: Loan terms and interest rates vary, so compare options to secure favorable conditions.
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Key Considerations
- Risk vs. Reward: Weigh potential growth from your investment against the risk of increased debt. Ensure the borrowing is justified.
- Cash Flow: The loan shouldn’t compromise cash flow. Make sure you can manage repayments without straining your finances.
- Alternative Funding: Consider financing methods that o er lower risk or cost, such as lines of credit or SBA loans.
Borrowing against your practice’s equity is a significant decision that can impact your business’s future. Consult with financial advisors who understand the healthcare industry to evaluate the feasibility and impact of your plans. Careful consideration and professional advice are crucial to ensure that this strategy aligns with your long-term goals and financial stability.
