How to finance a healthcare business

Financing a healthcare business requires an understanding of the current market context and a clear long-term financial strategy. An important factor to consider is whether the business will operate on a fee-for-service or subscription basis. Funding can be obtained through a variety of sources, including personal savings, venture capital investment, small business loans, grants, and crowdfunding.

Effective utilisation and management of funds is key to success; wise decision making and diligent asset accounting will pay dividends in the long run. A successful financing strategy supported by strong financial performance should drive ROI and enable sustained development opportunities for growth businesses. Anticipating possible risks and developing strategies to respond are necessary components of successful financing in the healthcare industry

What is healthcare finance?

Healthcare finance is an important source of finance for the healthcare sector. It can provide a much-needed resource to businesses and organizations in this field to fund specific needs, big or small. Healthcare funding offers healthcare organizations the opportunity to expand their business, invest in new products, or even facilitate aggressive growth.

Moreover, healthcare funding provides healthcare professionals with access to newer technologies, treatments and equipment that help improve patient safety and healthcare outcomes. For healthcare business owners and administrators, healthcare funding provides the ability to achieve their goals and objectives at a much faster rate than would have otherwise been possible.

Healthcare sector types include:

• Pharmacies
• Private hospitals
• Dental surgeries GP surgeries
• Day care services
• Residential care home
• Domiciliary care services
• Special needs schools
• Opticians
• Veterinary surgeries

Why does a healthcare business need to be funded

For a healthcare business to be properly funded, there must be a well-rounded approach. The first step is to find potential investors or lenders who are able to provide the capital necessary for the business. This step often involves comprehensive research into the current healthcare industry and its associated financial needs, as well as networking with potential sources of funding. Once potential investors have been identified, then it is a matter of securing the required funding for the business venture.

To do this requires creating a detailed business plan that proves the concept is viable, writing an effective pitch deck and developing methods to prove any ROI expectations based on data from existing business operations or similar ventures. Without sufficiently convincing evidence to back up capital requests and projections, any chance at securing adequate funding may be in jeopardy.

Funding maybe required for the following reasons:

• Any mergers and acquisitions
• Purchase new surgeries and clinics
• Assist with cash flow, growth and cost savings
• Acquire medical drugs and products
• Expand or convert an existing property

Healthcare practices may require funding to purchase the following;

• Property (buy/rent)
• Equipment/stock (PPE, drugs etc)
• Large medical assets (surgery chairs, scanners etc)
• Staff
• Working capital
• Marketing
• Associated costs (legal, accounting, hr etc)

Types of finance is available for healthcare businesses?

There are a number of different types of finance available to healthcare businesses, these are the most commonly used:

Invoice Finance

Healthcare invoice finance is a growing trend among healthcare businesses that allows you to use unpaid invoices as collateral for loans. This type of financing works by providing healthcare companies with funds immediately after you invoice your customers, which can help bridge the financial gap between the issuing of an invoice and payment being received. Healthcare Invoice finance also offers benefits such as flexible repayment terms, quick access to capital and fast payouts with minimum paperwork. Ultimately, it’s an incredibly useful tool for boosting cash flow and unlocking valuable working capital from unpaid invoices.

Business Loan

Unsecured business loans offer a great solution for growing healthcare businesses that need more resources to fuel their growth. These loans allow companies to access the financial capital they need without requiring any assets as collateral. With flexible repayment plans, low interest rates, and multiple lending options, businesses are able to take advantage of this funding source to help them expand operations and reach new heights. Unsecured business loans can be especially beneficial for small businesses that may not have the same access to traditional bank financing. They provide an invaluable opportunity, allowing companies to pursue their dreams with the backing of a reliable loan provider.

Asset Finance

Asset finance is an incredibly popular approach for healthcare businesses to acquire the assets they need without requiring access to a line of credit or large amount of working capital. Unlike traditional financing, asset finance solutions enable companies to access equipment, technological advancement and other resources that may have otherwise been unavailable due to a lack of funds. Through this tax-effective and cost-efficient approach, asset finance offers a variety of flexible financing options tailored to individual needs, making it the ideal business solution for any organization looking for the necessary means to reach their goals.

Asset Refinance

Asset Refinance is an attractive option for healthcare businesses needing to access funds without additional borrowing. When a business opts for asset refinance, it takes an asset from its balance sheet, like accounts receivable or inventory, and agrees to pledge that asset as well-secured collateral to a financial institution in exchange for cash advances. With terms that typically range from 6-24 months, Asset Refinance is much less of a cost burden than traditional financing options and enjoys more flexibility in time constraints. Additionally, most lenders provide the option of deferring payments until funds become available with the sale of the asset in question. Businesses should investigate potential opportunities to utilise Asset Refinance because it’s often a more practical alternative to traditional forms of financing such as long term loans or lines of credit.

Hire purchase or leasing

Hire purchase and leasing are two great options for healthcare businesses to acquire the necessary equipment or supplies they need.

• Hire purchase allows businesses to make payments on their chosen products over an agreed period of time, meaning they can spread out the cost of the item – which can often be quite expensive upfront. Leasing, on the other hand, is useful for businesses who wish to keep up with constantly evolving technology in industries like information technology and communications.
• Leasing, you have access to the most advanced technology available at a fraction of what it costs to buy outright. It’s also flexible as terms for leasing agreements can be adjusted as needed; allowing businesses to make changes so that their operations remain consistent and profitable. Whichever path you take – hire purchase or leasing – finding the right solution will help your business foster sustainable growth.

Acquisition Finance

Acquisition Finance can be a powerful tool for healthcare businesses ready to make the leap from mom-and-pop operations to larger, corporate entities. It provides an ideal opportunity to add new capabilities, or capitalize on existing market trends, by leveraging existing resources and investments. With a comprehensive Acquisition Finance package, businesses can take charge of their future growth with confidence. Whether you are looking to secure funding for a startup acquisition or expanding existing operations, Acquisition Finance can provide the resources needed to make these moves successful.

Commercial Mortgages

Commercial mortgages are an important financial tool that many businesses need to access in order to grow and achieve success. Commercial mortgages provide access to capital by enabling companies to purchase necessary real estate, such as warehouses, restaurants, retail stores and office buildings. Additionally, commercial mortgages can be used as a way for businesses to finance necessary renovations or expansions of their existing property holdings.

As such, a commercial mortgage is an invaluable asset for any company seeking to build its footprint and expand its operations. While the process of obtaining a commercial mortgage may involve several steps and involve both high costs and risks for the borrower, it can be worth the time and effort when accessing needed capital if the terms are agreeable. For those looking to make this type of investment, it is essential they get support from financial professionals with experience in this type of loan before making any commitments.

Tax Loans

Tax loans are an excellent option for those who need to pay their tax bill but do not have the funds currently available. With a quick, easy application process and fast approval times, the loan can help pay off debts quickly without worrying about unexpected financial problems. Tax loans provide access to immediate funding and offer flexible repayment methods that fit any budget. This form of debt relief is also often secured with lower interest rates than many other forms of financing, meaning that you can have peace of mind knowing your debts are taken care of efficiently and cost-effectively. Tax loans are a great way to alleviate tax debt woes.

Apply for specialist healthcare finance

Applying for specialist healthcare finance can give you the financial resources to help you get the care you need. The application process is easily done online, giving you a streamlined way to access funds quickly. Once approved, you’ll gain peace of mind knowing the care you need is readily available.

To get started simply contact 01246 233018 or make an application online and one of the specialist healthcare finance team will return your call.