A Failure to Plan Ahead
The number one mistake that optometrists make when it comes to financing solutions is a failure to plan. You don’t just need to know how you’re going to spend that money – you also need to understand how you’re going to pay it back and, most importantly, how long. Are you shopping for new equipment to expand services? The new income you’ll generate will help you pay the loan back quicker than if you were just hiring new employees. Plan ahead to avoid falling behind later on.
A Failure to Shop for the Best Terms
When you apply for a car loan, your dealer will run your application through a few different financing services to help try to find you the best loan. Why would you then not take the same precautions with something as important as your business? For the best results, compare and contrast what different lenders offer to help end up in the best situation.
Whenever possible, always try to use a provider like MedTrust Capital that will adjust the terms and conditions on small business loans depending on exactly how you plan on using the money. MedTrust Capital has commercial real estate loans designed for optometrists that are set up in a much different way from other types of small business loans – even if you’re borrowing the exact same amount of money.
Another big mistake that optometrists make when borrowing money is assuming that they don’t have to pay attention to the term rate. If you’re taking on a small business loan to help get you through a slow period, a shorter term is obviously something you can work with. If you’re purchasing a commercial building to expand your practice, a 15-year loan isn’t going to cut it. Look for a 25 to 30-year loan in that situation for the absolute best results.
Financing Too Little
Finally, another mistake optometrists make when borrowing money involves overlooking one of the biggest gifts they have: 100% financing. Just because you have the cash on hand to only take out 50% of the money that you need doesn’t mean that you should. Remember some periods will be better than others. If 100% financing is available at terms that are favorable to your practice, it would be a mistake not to take it.
Jay Horenstein is CEO of MedTrust Capital Group, based on Portland, OR. He has over 19 years experience in consulting medical professionals on their financing needs. PECAA members can call him at 800-941-1023 or email firstname.lastname@example.org for a free consultation on your financing questions.