If you run a health care practice, you likely know that it can be a capital-intensive venture. Employees, especially doctors and nurses, can be highly paid and equipment is far from cheap. However, it can also be very lucrative if you get the ball rolling. Health care advances may be one way to get the funding you need to succeed.
Why You May Need an Advance
There are many reasons why an advance may be right for your business. These are the most common:
- Expenses related to hiring new team members, especially when first opening.
- The cost of buying new equipment to either get started or expand your practice.
- Equipment often becomes obsolete as medical advances arise.
- Team members need to be supplied with equipment, especially if they provide home-based treatment.
MCA vs. BCA
There are two major types of advances for health care businesses: merchant cash advances and business cash advances. The former type uses your merchant account (used for payment card processing) as the repayment vehicle. You will receive a sum upfront then repay it (plus fees and the advance rate) through a portion of your payment card sales.
The latter type uses your bank account. It is similar in function to an MCA but uses your main business bank account as a way to repay the advance. A payment is withdrawn automatically either daily or weekly (rarely, a different interval may be used).
Both options can be great for a health care practice. However, the BCA is likely the better choice in many cases because medical businesses often receive much of their revenue through insurance providers. However, more providers tend to offer MCAs. The best choice is to shop around a little based on your specific needs.
Special Considerations for Health Care Businesses
Health care businesses can benefit significantly from advances. However, there may be some unique circumstances that don’t affect other business types. For example, if you are waiting on NSF funds, this may be a particularly good option. However, it would not operate well with an MCA, a BCA would be the only available choice. Additionally, some health care businesses may have more debt than other business types. This also recommends using an advance.
Discover more about health care advances. They can be a great way to improve your business’s financial outlook. This could be the right option to get your practice on the path to success.