At some point in your chiropractic career, you'll probably need to choose a lender. But, with changes in the lending industry, there are many more choices today than just the local banking institution. Where do you begin to look for in a lender, how do you negotiate the best solution and what do you do if you get turned down?
Posted in Choosing Advisors on Sunday, November 15, 2015
What to Look For in a Lender
Although there are a variety of types of potential lenders, most chiropractors typically will be dealing with a banking institution. Regardless of who the lender is, it is important to keep in mind that you are not only seeking a current borrowing source, but a future one. As your practice grows, you may need additional funds.
Although at first glance the selection of a lender may seem easy, it is not. Lenders are selective about the loans they make and your business plan and credit history will be scrutinized closely before a relationship is established.
Whether this level of commitment is present can be evaluated during the initial interview process. Make contact with chiropractors and other professionals who may have had experience with the lender and ask who they have had success working with.
Persistence Pays Off
Investigate several potential lenders. Even though this process takes time, you should remember that there are pros and cons with every lending institution. Your practice needs, current and future, will guide you in this selection. It may also take several contacts before finding the right fit.
- Many lenders are not comfortable financing start-ups, so if you are just starting out, you will need to be persistent and find one who is.
- You may also encounter lenders who only want loans larger than what you need for your practice.
- Some lenders may be unfamiliar with financing healthcare practices.
Most of these obstacles may be difficult to overcome, so making several contacts will increase your chances of finding the right fit.
An Important Relationship
Interest rates and fees are fundamental in the selection, but should not be the sole determining factor. Keep in mind that when money is "tight," a secure established lending relationship will be essential to acquiring needed funds.
In business, the relationship is important. Once you find a source of financing, you should open your other banking accounts with that institution. Most lenders will strongly encourage, if not require, you to maintain an account at their institution.
Even though the relationship is important and may be beneficial to you in the future, you should periodically evaluate your lending needs and keep your eyes open for other relationships that could help your practice. Especially as you become more established with a track record of success, you will become more attractive to other lenders.
While loyalty to the lender who gave you your start is admirable, don't let your practice suffer if you can get a better deal elsewhere down the road.