Starting up and running a medical practice is a major milestone in the career of any medical professional. But it’s also an expensive one. Are you trying to finance your first medical practice? The medical accountants at Nitschke Nancarrow have some tips.
Starting up your very own medical practice will give you an unprecedented level of control and freedom in practice and will generate virtually unlimited opportunities for growing wealth and growing as a professional.
Unless you have inherited a small fortune, however, you will likely need some help to finance your first medical practice.
You have several options to choose from. The key is to find the method that will work best for you.
Save Up to Finance Your First Medical Practice
You can’t go wrong with savings. If you have been working as a medical professional for some time, you are likely to have been earning a good income for a number of years, and with smart accounting and financial advice you could have a nice nest egg to finance your first medical practice.
Here’s a few tips to help you save.
Manage and reduce your debts. Get advice about refinancing and debt consolidation, if need be.
And remember to keep your business savings separate from those you set aside for an emergency or for personal use.
Of course, the best way to super charge your savings is to get advice from an experienced medical accountant.
Take Out a Loan to Finance Your Medical Practice
You have a few different loan options to consider, depending on your circumstances: line of credit, business loan and an equipment loan.
Then there are quite literally hundreds of loan options from all of the different banks and lenders. It is a lot to consider.
As you decide between different loan options, remember to compare loan repayment period length, fees and interest rates and flexible payment options. Don’t just settle for trying to get the biggest possible loan. You’ll also want a loan that will be easy to pay off.
Where can you get a loan for your new medical practice?
One option is to work with a large financial institution. As a doctor, you stand a good chance of securing a large loan, but you will still need to come prepared with a rock-solid business plan, some savings and a good employment history.
Alternatively, you can choose a smaller lender that specialises in medical practices. Such a lender can give you more in-depth insights and help you get a loan faster, but it isn’t likely to be as large as what you could get at a bigger bank.
The best way to tackle a loan for your medical practice is to work with a finance broker who specialises in the medical sector (like the team at Nitschke Nancarrow). Your broker will give you advice and also do the hard work of sourcing the best loan deal on the market.
Finance Your Medical Practice with Your Self-Managed Super Fund (SMSF)
It is possible to set up a Self-Managed Super Fund (SMSF) to purchase a property with. Buying a property to build your business in is a long-term kind of investment and expensive commitment that your SMSF favours.
There are also some significant tax benefits and asset protection that come with financing your practice with your SMSF.
Start Your Medical Practice by Investing in an Existing One
Instead of starting your own medical practice from scratch, it could make more sense to buy out an existing practice. The benefit of doing this is that you’ll already have a bank of clients, a team and working processes in place. You won’t need to waste any time or money in getting things started. Your new practice will hit the ground running and immediately start earning revenue that will help replenish your savings or pay back your loan.
You do sacrifice a measure of freedom if you decide to invest in an existing practice. It will take longer to make big changes, as change can be slow in a practice that is used to doing things a certain way. There may even still be some financial agreements in place that you have to honour by waiting out before you can set up ones that you prefer.
Get advice
Before financing your medical practice investment, you need the best possible advice.
Contact Nitschke Nancarrow, experts in all aspects of medical accounting, financial planning and business. We operate in Adelaide, Sydney, Melbourne and throughout Australia. Managing partner Kym Nitschke is available for a free initial discussion about your situation. Call us on (08) 8379 9950 or send me an email.
– Kym Nitschke
The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.
Taxation, legal and other matters referred to on this website are of a general nature only and are based on Nitschke Nancarrow’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.
Nitschke Nancarrow specialises in accounting, tax and financial advice for superannuation. Contact us now for a no obligations discussion about your needs.
