Struggling doctors turn to SBA loans

1/30/2012

Loans provided to doctors by the U.S. Small Business Administration have grown nearly 1,000 percent since 2000, according to CNN.  Specifically, SBA loans to doctors - mental health specialists included - grew from less than $60 million to $675 million during that 12-year span.

The reason? Many independent doctors who own private practices have been losing business due to falling insurance reimbursements, changing regulations and higher drug costs.

"The fact that SBA loans have jumped this much is eye-opening," Tom Blue, executive director of the American Academy of Private Physicians, told the news source. "It definitely speaks to the story that doctors are struggling."

To counter this, some doctors are seeking out SBA loans so they can transition to insurance-free business models

According to the website for Balboa Capital, doctors have also been considering alternative options such as working capital loans. These provide a "quick infusion of cash," and are used primarily to finance everyday operations of a company rather than buying long-term assets or investments, notes Investopedia.