Borrow when the money does something you can measure, like opening sooner, adding a provider or buying equipment that brings in members. Bootstrap when you can grow at the pace your cash allows. Whichever you pick, compare the total cost and the monthly payment, not only the rate.
The main options
- SBA loan. A bank lends the money, and the Small Business Administration guarantees part of it. Terms are often longer than a regular bank loan. Expect a detailed application, a personal guarantee, and weeks to months before the money arrives.
- Equipment loan or lease. Tied to a specific purchase, often quicker to get. This post compares those options.
- Line of credit. You borrow only when you need it and pay interest on what you use. Good for timing gaps, risky as a long-term crutch.
- Business credit card. Fast and expensive unless it's paid off quickly.
- Bootstrapping. Growing on your own savings and the practice's cash, with no lender.
Test it in members
Every monthly payment can be measured in members. If your membership is $80 a month and a loan payment is $1,200, the loan takes 15 members' fees every month until it's paid off.
So ask what the money does. In a made-up example, a $90,000 loan helps you open three months sooner. If those three months bring in members you'd otherwise wait for, and the practice can carry the payment from the panel you expect, the loan earns its keep. If it mostly covers costs you could trim, it doesn't.
What lenders look at
For a new practice, lenders usually look at your personal credit, your own money in the project, your business plan and your projections. For an open practice, they want reconciled financial statements, tax returns and a clear picture of cash. Books that are current and reconciled make every application faster.
The case for bootstrapping
No payment, no personal guarantee, and no lender's rules about what you can do. The cost is speed. You may open smaller, hire later or wait on equipment. Many DPC practices grow this way on purpose.
How a loan shows up in your books
Loan money coming in isn't income, and paying back principal isn't an expense. Only the interest is. That's why loan payments can leave your bank account lower than your P&L suggests. Here's how that gap works. Your bookkeeper should reconcile the loan balance to the lender's statement every month.
What I'd do this week
- Write down what the money would be used for, in one sentence.
- Turn the expected monthly payment into members at your current price.
- Check your cash runway with and without the loan.
- Get your last 12 months of reconciled statements ready before you talk to a lender.
Common questions
Do I need a personal guarantee?
Most small business loans, including SBA loans, ask for one. Read it carefully and talk with your attorney before you sign.
Is interest deductible?
Business loan interest is often deductible, but ask your CPA how it applies to your situation.
Should I pay off a loan early?
If your reserve is full and there's no prepayment penalty, it can make sense. Check both before you send extra payments.
Want lender-ready financial statements?
We reconcile every account each month and send your P&L and Balance Sheet by the 15th, so you're ready when a lender asks. If that's what you need, apply to work with us.