If you’re considering opening your own practice, the chances are that you’ll have to take out a loan. Medical equipment and staff can be expensive, so it only makes since to seek financial help in order to start your practice. What most people don’t know is that you can protect any loan you purchase with business loan insurance.
Business loan protection, also known as business loan insurance, helps cover loan payments in case the policyholder can’t pay. You may miss a payment because of an illness, disability, unemployment or other factor that prevents you from making your loan payment. Business loan protection usually covers a certain amount of time, such as 12 months or 24 months. A standard policy will pay after a 60-day exclusion period. Unlike other insurances, loan protection doesn’t consider your age, gender or occupation when it comes to calculating cost. 
Why Do Medical Practices Need Loans?
Unless you have plenty of savings to start up your own practice, there are a lot of expenses that make it difficult to start a medical practice. You can purchase a medical practice loan for:
- Startup costs (hiring, training, supplies, advertising, etc.)
- Purchasing an existing medical practice
Loans come in various amounts depending on the bank, term, and your needs. There are loans as small as $25,000 while others amount to $5 million. A small business administration loan is provided by the SBA to people who fall under a certain scope. For example, some of these loans are only given to those whose net worth is less than $15 million.
Loan protection is especially important if you are still paying off medical school debt. Having at least one of your loans covered in case you’re unable to pay is a huge relief.
What Type of Loan Do I Need for a Medical Practice?
There are different loans you can take out from a lender.
Medical practice loans are designed for healthcare professionals and often have larger limits than other business loans to account for the unique risks that doctors and other medical professionals face.
Equipment financing can cover expensive equipment by serving as collateral. The financing typically extends to the lifespan of the financed equipment. This means that if a piece of equipment typically lasts 5 years, you will be paying for equipment financing for 5 years for that piece of equipment.
If you’re not sure what type of loan to take out, seek out an industry professional for advice. Each practice is different, and your practice may not need the same amount of equipment as another medical practice. Also be sure to get several offers from different lenders before settling on a loan.
How to Qualify for Business Loan Protection
The only qualifications you need for business loan is that you must be employed 16 hours a week or more or be self-employed for a certain amount of time. When signing up for loan protection, you will need details of the loan, proof of your credit history and the time period you wish for the policy to run.
Lastly, a lender may require you to carry insurance to cover your payments. It’s important to do your research on each lender that offers a loan in order to understand their requirements. Whether a lender requires insurance or not, it’s important to have coverage for the unexpected. Medical practices face a lot of unique dangers which you must anticipate if you’re considering starting your own practice. This includes medical malpractice insurance, which helps if you or an employee are accused of negligence.