Reasons a Practice Would Need a Loan

There are many reasons an Optometry Practice would need a loan. Many are familiar with student loans however when it comes to practice loans the reasons are numerous and are being looked at from another perspective. Raising debt has positive and negative sides. The positive side is being able to reach performance goals of growth through tapping on opportunities that fade over time. Therefore, you need the money to finance a certain project that characterizes the opportunity that may not be available a year or two later. The negative side is if you fall into the debt trap and you don’t use the loan to finance productive projects that will pay the money and the cost of the money you will end up losing both the opportunity and incurring bad debts that poison the balance sheet and if you’re gone too far it may lead to your bankruptcy.

The reasons your practice may need a loan include:

Starting or buying a new practice may very well put you in a position where you will need a long-term loan. Small businesses often get loans from banks, credit unions, small business investment company, the Small Business Administration (SBA) in the States, and under the Small Business Act in Europe.

Renovating, redecorating, or expanding your current practice location.

Purchasing new equipment, investing in new machinery, office equipment, or renewing old ones. You want to make sure that the new technology you are investing in will be able to generate enough money to cover its cost, its maintenance costs, and the cost of money as it is depreciated throughout its productive lifetime period.

Hiring is another very common reason to considering a loan.

Inventory, rent, bill payments, suppliers payment, advertising, cash flow, tax payment, training, and development are also common reasons Optometry practices consider taking a loan whether for the short or long term.