Common Mistakes When Planning Your Medical Spa
Everything starts with a business plan: If you don’t have one. Write it. A good business plan will help you get a handle on all of the things that get glossed over in the excitement of starting a new business. It’s also a usual requirement for getting financing.
Remember that this is a medical business and comes with special requirements. Non-physicians can not employ physicians, medical oversight, HIPPA compliance, and a host of other regulatory issues need to be addressed. Play fast and loose with these rules and you’re asking for trouble. (One of our local competitors in Utah was not providing adequate physician oversight. The state walked in one day, confiscated all of their technology and patient records and closed them down.) All lenders want to know how you’re going to handle these issues. ADVERTISEMENT
Financing is easy. Financing smart is hard: Speak the words “medical spa” as a physician and you’re everyone’s best friend. Banks, lenders, technology companies will all have big smiles on their faces and papers in their hands, ready to lend money or finance everything you need. If you’re not a physician it’s going to be harder.
If you need money or a line of credit for needs other than technology, a bank will probably be your first stop. Banks will provide the best rates but are the most rigorous in investigating borrowers and have the least tolerance for risk. Banks will require that you have spotless credit and that the entire loan is secured. In most cases, everyone who owns 10% or more of the business will be personally responsible for the loan and have to provide two or more years of tax returns. Be prepared for a blizzard of paperwork. Banks will want to see financial statements, cash flow, a business plan (although they don’t read it), and have a little visit.
The bank is going to want to know what the funds are intended to be used for. They want to see tangible assets that have a market and can be sold if the business fails or you can’t make the payments. They don’t want to hear that you need more money for marketing and advertising or salaries that don’t have any resale value.
The money that banks will lend you will take the form of a loan, or a line of Palm Desert homes credit. Loans have a set schedule and payments. A line of credit is somewhat different. The idea is that the bank extends a line of credit that you may draw on. Interest is paid only on the amount of money that is used. However, banks usually require that the entire balance is paid off and unused for one month every year to ensure that the business is liquid. If Smeg SX91VML-5 you can’t meet this requirement, the entire line reverts Бензин to a loan.
Some bankers are helpful and some are not. In one instance a branch manager told one of our accountants that wanted some information that “he didn’t need our business and we could just live with that”. Avoid these types if you can. A friendly banker can go a long way in securing loans and providing a little flexibility if things don’t go exactly as you planned. If you find a great banker, send him a Christmas card and some cookies once in a while.
If you are in the fringe of what a bank can tolerate risk wise, they will often suggest or apply on your behalf for an SBA (Small Business Administration) loan that’s partially guaranteed by the government. (www.sba.gov/financing)
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