Starting Your Chiropractic Business With a Loan
You’re going to need capital to start your chiropractic business or expand on an existing practice. You’ll need cash flow to set up your office, hire competent staff, and buy all of the necessary medical equipment. These expenses can quickly add up. Unfortunately, the chiropractic field is often viewed as an alternative type of medicine. This can make it hard to get the money you need to set up your practice. While trying to start your chiropractic business may seem like a daunting task, there are financial options that can help.
Cover Your Startup Costs
On average, opening a chiropractic business can cost between $220,000 and $480,000. This includes the cost of a building, office equipment, medical equipment, your business license, insurance, legal fees, and working capital to cover expenses such as salaries.
This breaks down into the following percentages of money you’ll need for each:
- Security lease: 5%
- Architectural and design fees: 5%
- Construction and renovation costs: 47%
- Signage: 2%
- Office and medical equipment: 9%
- Legal fees and licensing: 5%
- Marketing: 8%
- Working capital: 14%
- Additional Expenses: 5%
Types of Chiropractic Business Loans
There are a few types of business loans for chiropractors. Each one suits a different need. Understanding them better will help you know which may work best for your situation.
Long-Term Loans
Long-term loans are used for large amounts. You can pay them off over several years. They’re used for large purchases such as a new building, medical equipment, or an existing chiropractic business. These loans are harder to qualify for, but you’ll be able to enjoy lower interest rates.
Short-Term Loans
Short-term loans are perfect if you need money to get you through a short amount of time. If you’ll be needing the money for less than one year in total, apply for a short-term cash flow loan. This type of loan is used to cover things like rent, payroll, and supplies until your business becomes established. These loans make it easy to get out of debt quickly, but they do have a higher interest rate.
Equipment Financing
If you need equipment, such as an X-ray machine or chiropractic tables, you’ll want to apply for equipment financing. When you get an equipment financing loan, the equipment you purchase is used as collateral. This helps you get a lower interest rate. The downside is that if you can’t keep up with the payments, the lender takes the equipment back.
Line of Credit
A line of credit refers to a flexible borrowing line. The lender lets you know the maximum amount you’re allowed to borrow. You then decide when and how much you want to borrow, which makes this a convenient option.
Startup Loans
Startup loans meet the needs of your business while aligning with your future goals. This type of loan provides you with a line of credit or a lump sum that you can use to start your practice. This gives you the cash needed to start strong and grow fast. There are two types of startup loans:
Secured Startup Loans
Secured startup loans require you to pledge assets as a guarantee of repayment. If you default, the lender seizes these items to cover the unpaid amount of the loan. The assets must have a value that’s equal to or greater than the amount of the loan.
Unsecured Startup Loans
You don’t have to pledge assets for an unsecured startup loan. Qualifying for the loan is based solely on your business’s potential and your personal credit history. Interest rates are higher on unsecured loans because the lender is taking a bigger risk.
Alternatives to Chiropractic Business Loans
While chiropractic business loans exist, lenders typically ask you for proven revenue and proof of having run your business for a minimum of a year. If you’re just starting out, you need to consider alternatives.
If your clients use their credit or debit cards to pay you for your services, you can set up a merchant cash advance. This is an advance a lender gives you based on an estimate of your future card sales.
Another option is a business credit card or a personal loan. You secure this with your personal credit score. You increase your chances of qualifying for these if you can obtain the loan with your car, home, or investment accounts as collateral. Be aware that if you can’t pay off your debt, you could lose these items.
Borrowing from friends, family, or colleagues is also an option. If you’re purchasing an existing business, the seller may provide financing as part of the deal. All of these options give you money to cover running your chiropractic business for the first few months until you can get a loan.
What Are Chiropractic Business Loans Used For?
Refresh Your Business
You can use a chiropractic business loan to refresh your current practice. Use it to purchase comfortable furniture for your waiting room and modern decor to update the business. You can also use the money to modernize the front desk in the reception area. This includes both decorative and functional details. This loan is ideal for refreshing your treatment rooms, too.
Invest in New Technology
Use your chiropractic business loan to purchase new technology like Transcutaneous Electrical Nerve Stimulation (TENS) equipment, which is expensive. Your loan could even give you the opportunity to offer treatments like cold laser therapy to your patients.
Pay Your Monthly Expenses
You can apply for a working capital loan to keep your business running smoothly and to help pay for operating costs. These loans can cover the expense of business insurance for your chiropractic practice, too.
Cover Payroll
If you have a loan that helps cover your payroll, you’ll have the funds to hire high-quality front desk representatives and medical assistants. These individuals are critical when it comes to the success of your practice.
Potential Digital Marketing Strategies
Social media and online marketing are essential to having a successful chiropractic business. Word of mouth is no longer a viable way of attracting new patients and retaining clients; staying relevant costs money. About 49% of chiropractors in this country do their own marketing, and only 25% of thriving chiropractors manage their own Google ads. Be aware that you’ll spend a minimum of five hours a week on this task if you take on these tasks yourself, and this takes you away from your patients.
Building an effective digital marketing strategy and improving traffic to your website is so important that you may want to have a loan that allows you to hire an administrative assistant or a third-party marketing company to handle social media and marketing.
Chiropractic Business Loan Lenders
Banks and Credit Unions
Banks and credit unions are some of the first places people think of when it comes to financing a business. While these are reputable lenders, they have strict standards. These lenders may not consider lending a chiropractic business money until the practice has been operating for a few years. This means that banks and credit unions are best suited for established practices.
The Government
As a chiropractor, you may qualify for financing from the U.S. Small Business Administration (SBA). This is a program in which the federal government guarantees partial repayment of a loan. This allows lenders to charge more affordable fees and lower interest rates. Normally, two years of business history is needed for an SBA loan.
Online Lenders
Online lenders are more likely to accept applicants who are just starting their chiropractic businesses. They don’t require several years of experience, which makes them a great option for anyone who’s only had their practice for one year or less. These loans may have higher interest rates due to their accessibility.
Regardless of which lender you choose, look for one who specializes in doing business with chiropractors. If they understand the field, they’ll be more willing to approve your loan based on a well-developed business plan and potential billing trends.
Things to Consider
As you can see, not all loans or institutes are the same. This is especially true if it’s your first time applying for a loan. Keep in mind the following as you explore your options:
- Secured or unsecured
- Interest rates
- Term of loan
These details change from one institute to another. It’s best to compare these factors with at least three lenders before making a final decision. This allows you to make a knowledgeable decision.
Applying for a Chiropractic Business Loan
You’ve successfully finished chiropractic school, passed your exams, and secured your license. Now it’s time to start your own chiropractic practice. A chiropractic business loan can help you make your dreams come true. Simply follow these steps to obtain the necessary funding needed to reach your goals.
- The first thing you need to do is create a business plan. This will show your lender what you need for your start-up costs. Be sure to include your expected operational costs, estimated profits, and long-term goals. They’ll also want to see how you plan to repay the loan.
- You’ll be asked to provide your personal information to the lender. Have all the necessary documents and information organized and ready to go. Make sure you don’t have any blemishes on your credit history that could hold up the lending process. These should be taken care of in advance.
- Provide any further financial or start-up details that you feel the lender may need.
- Once you are offered a chiropractic business loan, review the terms carefully. Ensure that you’re getting the best interest rates and loan terms possible. Be prepared to negotiate these items.
- Finally, you’ll need to sign your chiropractic business loan contract. You’re now ready to get to work on your chiropractic business.
Get a Chiropractic Business Loan Today
It doesn’t have to be difficult to obtain a chiropractic business loan. A lender who specializes in business loans can help. They’ll talk to you about starting your practice, and they’ll review your business plan. This helps determine which financing is best for you and your business at this time.
American Business Credit is a leader in start-up business loans. Our unsecured chiropractic business loans can be tailored to your specific needs. We’ll help you with everything from covering daily expenses to funding renovation plans. We provide you with the capital you need to move forward. Contact American Business Credit today for more information.
