Line of credit – working capital for your practice

At times medical, dental and veterinary practices may experience swings in cash flow. John Tassopoulos, GM - Commercial Finance of Avant Finance, explains how a line of credit can smooth out the highs and lows, giving doctors confidence that funds are available when needed.

Doctors sitting around a table in a meeting

Even with stringent budgeting and expert cash flow forecasting, at times some medical, dental and veterinary practices – like many businesses – may experience ‘lumpy’ or uneven cash flows.

There are times when a practice may need additional funds to meet unexpected costs such as repairs and recruitment. At other times, funds may be required to meet regular expenses like bulk ordering of consumables, payroll and insurance premiums during quieter trading periods.

This is where a line of credit can play an important role, maintaining the steady functioning of a practice.

How does line of credit finance work?

The practice will be given an appropriate funding limit, and from there funds can be drawn down, as needed, up to this limit. Then, when surplus cash is available, the practice can choose to repay the line of credit balance. Monthly payments on the line of credit are interest only, with interest charged only on funds drawn and outstanding.

This makes a line of credit a flexible form of finance.

A line of credit benefits both new and established practices

Doctors with established practices are often able to draw on past experience to identify periods when cash resources are likely to ebb and flow. Having a line of credit in place allows the practice to smooth out and stabilise cash flow.

By contrast, when setting up a new practice, cash flows are far less predictable and it can take time to grow revenue, so line of credit finance can be a valuable source of working capital to meet your expenses.

Fortunately, having a brand-new practice is not a barrier to arranging line of credit finance. As Avant Finance works with doctors, dentists and vets, we have a wealth of experience in this area. Our lending specialists will assess a range of factors including where the medical professional is in their career journey, as a means of determining the upper funding limit.

Line of credit finance can be the key that helps a new practice to open its doors, giving doctors the confidence of knowing that funds are available to cover any shortfalls of cash, particularly in the early days.

Access to funds

As a lender specialising in finance to doctors, dentists and vets, Avant Finance understands that medical professionals need simple and accessible funding.

Partnering with Avant Finance for a line of credit gives medical professionals choice. Select from our own line of credit product or let us recommend a suitable product for your needs from our extensive range of lender partners.

For more information on arranging a line of credit facility to suit your practice, call Avant Finance on 1300 99 22 08, or request a free consultation with one of Avant Finance’s medical finance specialists.

Disclaimer: ^*All applications for credit are subject to eligibility and credit approval criteria. Approval of any loan is subject to standard credit assessment and is at the lender’s complete discretion. Terms, conditions, fees and charges apply. Contact Avant Finance for further details.