Line of credit – working capital when you need it

All medical practices experience swings in cash flow. Jeff Miller, Chief Growth Officer 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, it’s inevitable that medical practices – like all businesses – will experience ‘lumpy’ or uneven cash flows from time to time.

There can be predictable periods, such as following quarterly tax lodgements, when medical professionals know there will be a possible cash squeeze.

However, at other times a practice may need additional funds to meet unexpected costs.

This is where line of credit finance plays an important role, maintaining the steady functioning of a medical practice.

How does line of credit finance for doctors work?

The practice will be given a maximum funding limit, and from there funds can be drawn down as needed (up to the set limit). Then, when surplus cash is available, the practice can choose to reduce the balance. There is no formal schedule of repayments, however there is a loan term.

This makes a line of credit a very flexible form of finance. It can also be highly cost-effective as interest is only charged on the funds drawn down.

A line of credit benefits 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 doctors are setting up a new practice, cash flows are far less predictable. In this situation, line of credit finance can be an essential source of working capital. As with many new businesses, it can take time to grow revenue. In the meantime, of course, the practice will continue to face ongoing expenses.

Fortunately, having a brand-new practice is not a barrier to arranging overdraft finance. As Avant Finance specifically works with medical professionals, we have a wealth of experience in this area. Our lending specialists will assess a range of factors including where the doctor is in terms of their personal career, as a means of determining the upper funding limit.

The main point is that line of credit finance can be the key that allows a new practice to open its doors, giving doctors the confidence of knowing funds are available to cover the inevitable shortfalls of cash, particularly in the early days.

Access to funds in just a few days

As a dedicated lender to the medical profession, Avant Finance understands that doctors need fast, efficient funding. We can usually have a line of credit facility up and running within 24-48 hours of receiving all the relevant information needed to make a lending decision.

The beauty of partnering with Avant Finance for a line of credit is that we give doctors choice. Select from our own line of credit products or let us recommend a suitable product 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.

Interested in a line of credit for your practice?


*Eligibility criteria, terms and conditions, fees and charges apply. Contact us for further details.

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