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23 May
  • Editorial Team
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Medical infrastructure is one of the key pillars of the medical practice in any country. It is easy to assume that a good medical infrastructure depends on well-established doctors. However, setting up a medical practice and expanding it is far from easy. There are multiple challenges in the path, the biggest of which is lack of funds. This is where doctor loans step in.

Doctor Loans or Medical Equipment Financing are loans meant specifically for doctors and medical professionals. While the general overview of a doctor loan is similar to other kinds of professional loans, some features are tailored specifically for the medical profession. Let’s know more about doctor loans and how it can benefit you.

Features and Benefits of Doctor Loans

  1. Start a New Practice: Starting a new practice is similar to starting a new company. There are simply too many things to be done, and all of it requires capital. Medical loans allow you to get the help needed in setting up a new practice from scratch.

  2. Fund Project Expansion: Expanding any project requires capital. You might want to expand a particular specialty or hire more professionals for the same. Like anything else in the medical field, it would not be cheap. Thus, it is yet another area where doctor loans might help you out.

  3. Get Working Capital: Sometimes, you simply need money to do things that may or may not be related to your profession. Certain loans aid you in maintaining the working capital for everyday expenses without the need to specify the objective of taking a loan.

  4. Purchase Medical Equipment: Medical equipment is the most expensive equipment required for any profession, and it is usually beyond the capacity of a single doctor to buy them. But at the same time, having in-house medical equipment is always more beneficial in the long run. Medical Equipment Loans allow you finance new equipment that helps further grow your practice.

  5. Grow Practice: Many doctors aim to expand their practice after a certain number of years. This includes getting a new office space, hiring new staff and building a portfolio. Doctor loans allow you to do that without worrying about the capital required.

  6. Consolidate Debt: Debt consolidation remains an important reason for taking loans, irrespective of the profession. Consolidating debt refers to taking a single loan (usually at a low-interest rate) to pay off multiple loans (usually at high-interest rates).

Types of Loans for Doctors

  1. Medical Equipment Financing: Medical equipment is not easy to acquire, owing to its high cost. Even a basic ECG machine starts from INR 50,000. Medical equipment financing allows you to get finance for any new equipment.

  2. Business Loans: Business loans have their own undeniable appeal for business growth. Business loans provide you with funds in an open line of credit, for a tenure generally ranging between 1-7 years. It is one of the preferred options for doctors who are looking to expand their practice.

  3. Working Capital Loan: Investing in long-term assets is good but being able to manage everyday expenses is vital. As a doctor, you might need to pay the bills, order medicine or pay the staff’s salaries. Working Capital loan enables you to fulfill your daily capital needs.

  4. Bill/ Invoice Discounting: Though bill/invoice discounting is technically meant for SMEs, medical professions also serve as an ideal case. Bill/invoice discounting essentially allows you to take a loan in exchange for outstanding bills of orders that you are yet to be paid. While Invoice discounting covers only unpaid bills, bill discounting covers all types of bills of exchange.

  5. Loan Against Property (LAP): In case you already have your own office, Loan Against Property seems like a great way to acquire funds. LAP is a simple loan that gives you funds in exchange for a fixed property as a mortgage. By mortgaging your office, you can get huge funds that you can use for expanding your practice.

Eligibility and Documentation

The eligibility criteria for a doctor loan vary greatly from lender to lender. In general, the following criteria are considered:

  • Public, Private, Partnership, Trust, Society & Individual Doctors

  • 5 years of experience & min. 3 years in current business

  • Business profitability as per industry norms

  • Satisfactory credit & financial history

The following documents are required while applying for a doctor loan:

  • Audits and financial projections in case of self-employed doctors. Income Tax returns from past years in case of salaried doctors.

  • Profiles and the KYC of all applicants.

  • Necessary documentation pertaining to the company, including documents of registration.

  • A certificate issued by the Indian Medical Association.

Conclusion

Doctor Loans are great aids for helping medical professionals expand their practice with access to necessary funds. While they are primarily responsible for setting up individual businesses, they also contribute to building the medical infrastructure of a country.

Did You Know

Disbursement

The act of paying out money for any kind of transaction is known as disbursement. From a lending perspective this usual implies the transfer of the loan amount to the borrower. It may cover paying to operate a business, dividend payments, cash outflow etc. So if disbursements are more than revenues, then cash flow of an entity is negative, and may indicate possible insolvency.

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