HOW TO TAP IN TO FUNDS FOR YOUR PRACTICE

This column represents the female perspective in eye care. It is produced in cooperation with the Optical Women’s Association.

ADDING A LANE, revamping the pretest room and building out a new practice all require you to secure financing. The fear of too little experience with financing and concern regarding making a costly mistake, can cause a wealth of anxiety.

Here are some tips to help.

WEIGH YOUR OPTIONS

By making any of the purchases mentioned above in cash, you avoid paying interest; but does that automatically make self-financing the best choice? Surprisingly, no.

If waiting until you have the cash is inhibiting you from investing in equipment now, you risk losing revenue and possibly patients.

Also, tax deductions, such as Section 179, which allow writing off investments in the business, may offset the interest.

SHOP FOR A LOAN

It’s important to shop around to choose the right terms and rate for you. These factors are entwined.

Most lenders offer the best rates to applicants who have a 700 FICO score or higher. But borrowers with scores between 670 and 699 are able to secure loans at somewhat higher rates, provided the reasons for the lower score aren’t due to poor financial habits. A bankruptcy or too many late payments on your mortgage will be deal breakers.

Sub-prime lenders specialize in loans to borrowers who have low FICO scores, but expect to pay interest rates in the 20% range. Additionally, you can apply for a loan with your bank; they will often lend to a long-time customer who has less than perfect credit, but, again, the rates can be very high.

Make all loan inquiries in the same week or two to limit the effect on your FICO score, advises Jamie Ritter of De Lage Landen Financial Services. Lenders check your FICO score to provide you with things, such as loan terms and rates, which you get when shopping for a loan. Having too many of these inquiries within a short period of time can bring down your credit score. However, Ms. Ritter says, as long as the inquiries are all close together and for the same amount; it shouldn’t affect your score too much.

EVALUATE THE LENDER

The rate and the terms of the loan are key considerations when choosing a lender. However, Ms. Ritter points out another consideration:

“You may not think about it now, but using a vendor with advanced customer service really goes a long way,” she says.

And Lisa Hartley, a vice president at Univest Capital Inc., strongly suggests you check the reputation of the company before you sign anything:

“A Google search should reveal any issues with the lender, fairly quickly,” she says.

There are quite a few sites that disclose less-than-reputable lenders, one of them is www.ripoffreport.com .

DON’T BE INTIMIDATED

While it may seem intimidating, remember that lending is a business. The banks and finance companies don’t make money unless they write loans. This is good news because it means that your rep wants to find a way to do the deal as much as you do. So, as long as your credit is decent and you do your homework, you should be able to navigate the loan process successfully. OM

This column represents the female perspective in eye care. It is produced in cooperation with the Optical Women’s Association.

MS. SHAW has been in the eye care industry for nearly 30 years. She currently works for IBM Watson Health Imaging and is a Vice Chair for the Communications Committee of the Optical Women’s Association; a non-profit organization to help women in the Eye Care industry to connect, lead and inspire.