As further evidence that physicians are struggling to keep their practices afloat, government-backed Small Business Administration (SBA) loans issued to physicians have dramatically risen from less than $60 million in 2000 to $675 million in 2011.
While some physicians say they've applied for SBA loans just to meet payroll amid falling insurance reimbursements and ever-changing regulations, others have invested the money into transitioning to concierge or direct-pay business models, CNNMoney reported.
According to CNN, doctors tend to favor SBA loans, which are government-guaranteed bank loans, because they are easier to get and have lower interest rates than regular loans.
Meanwhile, with banks still suffering from the real estate crisis, many are eager to meet growing demand in healthcare, the Las Vegas Review-Journal reported.
In Nevada, for example, Plaza Bank, City National Bank and Bank of Nevada all report to have enhanced their services to doctors, clinics and medical specialty groups looking to meet growing local demand. And with competition heating up for loan business in the healthcare sector, some banks are rolling out new products specifically with physicians' needs in mind.
According to Ali Rizvi, chief banking officer with Plaza Bank, in response to numerous physician requests for a simplified loan application and revolving lines of credit of as much as $100,000, the bank introduced its HealthPro product, which includes those features plus access to payroll service, online banking, courier service and a single point of contact with a manager assigned to the client.
For banks, medical business also is attractive because physicians tend to have a lower default rate than other clients, the newspaper noted.
To learn more:
- read the article from CNNMoney
- read the article from the Las Vegas Review-Journal