Business Loans
for Physical Therapy Clinic

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If you are thinking of starting a physical therapy business, demographics are in your favor. The population of the United States is aging differently than previous generations. They have a desire to remain active well into old-age, whether it’s on the golf course or hiking in the mountains. Baby Boomers visit the gym more than millennials and have a positive and goal-driven attitude towards aging.

Younger generations are participating in sports more than ever, with 56.5% of kids playing a team sport at least once during 2017. The rise in kids in sports has led to an increase in sports injuries; 3.5 million kids under age 14 were treated for sports injuries over two years, and 2 million high school athletes sustained a sports-related injury during the same period.

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What Do I Need to Qualify?

Below is a list of the requirements to get approved for business funding with our most basic program.

  • At Least 3 Months in Business
  • 530 Min. Credit Score
  • $10,000 Min. Monthly Revenue
  • How Do I Apply?

    Applying has never been easier. You can either call our toll free number 24 hours 7 days a week at


    Submit your online application by clicking apply below and entering a few basic details about your business.

    Types of Business Loans Available

    Short-Term Business Loans

    Perhaps you took out a large loan to fund your start-up costs, but cash is running low. Or, you borrowed from friends and family, but need more capital. A short term business loan fills a short term business need, often an unexpected one. You could not plan for a broken ultrasound machine that requires significant repairs, or a remodel that goes over budget, and now you need the money to complete it. A short-term loan could be the solution.

    Banks incur the same processing and lending costs for a short term loan as a long-term loan, but make more money off long-term loans. Thus, they are reluctant to lend for short terms. Alternative lenders offer short term business loans more often than large banks. Alternative lenders charge a higher interest rate than a bank, 9% to 45%, but will lend for just six to twenty-four months. In general, you do not want to make payments on a loan after you have realized its value.

    Equipment Financing

    Physical therapists can use exercise bands and balls for many patients, but at some point, your practice will need ultrasound machines, stationary bikes and treadmills, and weight sets. Equipment financing loans help you outfit your business at a low cost.

    The equipment that you use the loan to purchase also collateralizes it, so equipment financing loans have lower interest rates than other loan products. The lender may require an independent appraisal, but they will want information on the equipment’s age, condition, and resell value before approving financing.

    If you fail to make payments on an equipment financing loan, the lender can and will seize the equipment to recoup their losses. If your business could not survive without ultrasound or an X-Ray machine, consider another form of financing rather than taking this risk.

    A Merchant Cash Advance

    Merchant Cash Advances help all types of small business owners who cannot get approved for a loan at a bank. Banks reject loan applications for many reasons, not all of which relate to your credit score. They typically require that you have two years of tax returns, that your business has been open for at least two years, strong revenues, and consistent growth and profit. Newer companies struggle to meet all these requirements.

    Physical therapists graduate owing an average of $96,000 in student loan debt. If you have not paid down your debt yet, your debt service coverage ratio could be a disqualifying factor with a bank. This ratio measures your ability to repay your debt, and if it is too high, banks worry about your repayment ability. Alternative lenders may look at this ratio, but more important is that the business applying processes credit cards. That and the whole context of your financial situation and the business.

    Alternative lenders offer merchant loans to borrowers who cannot or do not want to borrow from a bank. While banks might offer lower interest rates, it can take as long as three months for a loan to go through underwriting. Some small business owners prefer not to wait that long. Alternative lenders can approve an mca loan application and disburse funds in the same day.

    Borrowers with credit scores as low as 500 can qualify as long as their business has monthly revenues above $8,000 and the company accepts credit card payments. Merchant advance loans range in size from $5,000 to $1 million, at rates of 12% to 45%, for terms of two to eighteen months or more.

    Working Capital Loans

    Once you have opened your clinic, working capital will keep it running. Working capital is the money available to cover daily expenses such as rent or payroll. To calculate it, subtract your current liabilities from your current assets on your Balance Sheet. Ideally, you want a positive balance.

    For many small businesses, this is a difficult balance to maintain. If you are waiting on provider reimbursements, which can take months, your clinic could be generating revenues but not have enough cash-on-hand to pay its bills. Working capital loans cover those gaps.

    Working capital loans have longer terms of 12 to 26 months. Use a working capital loan to cover your first year’s expenses, freeing you to concentrate on growing revenues. They require a minimum credit score of 650 and minimum monthly revenues of $10,000. Lenders place higher qualification requirements on these loans because of the longer terms. The longer they wait for their money, the greater their risk.

    Interest rates range from 9% to 45%, and the rate you pay will depend in part upon your credit score.

    Apply Directly to One Source!

    Work with a direct lender and get a business loan as fast as the same day. Shield Funding offers competitive rates and terms on all it’s funding programs. Apply now with a trusted lender that has been helping business owners secure working capital for almost two decades.

    Growth Tips for a Physical Therapy Clinic

    State of the Industry

    According to the Bureau of Labor Statistics, physical therapy jobs will grow by a whopping 22% between 2018 and 2028. It’s a high-growth industry, driven by demand. The market is estimated to be worth $34.5 billion in 2018, and that number grew 6.2% growth over the previous year.

    It is an industry primed for new entrants and open to smaller players. The 50 largest companies hold less than 25% of the market share. The market consists primarily of small to medium companies and clinics that make around $1 million in annual revenues. While you should assess the amount of competition you face in your city before selecting a location and opening your doors, at least you will not be competing against a larger organization.

    The average clinic brings in $886,000 a year and has a 14.6% net profit margin.  Predictions based upon past enrollment growth estimate that there will be a 54% increase in physical therapy graduates by 2026. Even with the rate of retirees, you can expect to face stiff competition from other graduates. Developing a strong business plan and a clear path to success will help you succeed in what could become a crowded marketplace.

    Pick the Right Location

    If you decide to open a clinic, consider more than the space available and the monthly rent. If there are three other physical therapy clinics within five miles, you will face stiff competition. If, however, none of those clinics offer teen sports rehab services, your clinic could fill that gap. The perfect location will have an overlap between gaps in service and strong demand for those services.

    Look for an accessible building, both for patients on crutches and the elderly or otherwise disabled, and one with ample parking or near public transportation. Ask the landlord if they will subsidize or provide landlord incentives for any needed remodeling or work you will need to do to retrofit the space.

    If physical therapy adjacent businesses such as acupuncturists or chiropractors thrive in the neighborhood, it is a sign that your business could do well. Search for a visible location, where signage and foot traffic could bring in business.  Take some time to analyze any potential sites for their current and long-term potential.

    Analyze Local Market Conditions

    Before signing a lease, consider the local market. How many referral providers are there in the area? A strong referral network will help you grow your business. If you plan on joining a provider network, what are their typical reimbursement rates, and how can you become a preferred provider? Pay close attention to how long it will take for you to qualify a preferred provider, as this will impact your cash flow, and you may need to borrow in the interim.

    Consider Offering Subscription-Based or Concierge Services

    With an aging but health-conscious society, many people want access to physical therapy services but do not have an exigent need. Perhaps an old shoulder injury has begun acting up again on the golf course, or they want a physical therapist to work with them to strengthen their hip joints.

    With subscription-based services, patients pay a monthly fee for unlimited access to your services. With concierge-services, you may put together a 15-session package with a set price for common injuries such as a torn-ACL or torn rotator cuff. Patients purchase packages for their condition. Both are cash-based models that can offer physical therapists a steady revenue stream.

    For patients with a high-deductible insurance plan, the cost could be the same or less. Others who seek to address older conditions may not be able to get a referral. Patients also value on-demand services and price transparency. Concierge care reduces spending on long-term care by preventing future injuries and helps patients avoid high co-pays and long waits.

    It is a growing part of the physical therapy market, and if you set up shop in an affluent community, you could build your business around it.

    Go Cash-Based

    The industry has continued to see lower reimbursement rates and stricter guidelines, which has hurt many practice’s bottom lines. Some clinics have gone to a cash-based model.

    With this model, you set fees and collect payment yourself. If your patients want to, they can submit your bills to their insurance company for reimbursement, so you may have to maintain the same level of paperwork as a directly-reimbursed practice.

    Going cash-based reduces your reliance upon reimbursement, and since you can demand payment upfront, it can also solve cash flow issues. Before selecting this model, however, make sure that enough demand exists to support it. A component of demand will be the patient’s ability to pay out-of-pocket. This model works better in wealthier areas.

    Partner with a Local Gym

    If you specialized in sports medicine, consider partnering with a local gym. You could offer services both in the gym environment and out of a nearby location.

    Injury-prevention has become a hot topic, and many serious athletes and weight-lifters want to work with physical therapists to design workout routines or incorporate injury-prevention exercises into their routines. A 2016 study found that there had been a 35% increase in gym injuries since 2012, many related to improper equipment usage.

    Depending upon your skills and certifications, you could teach safety classes, or create personalized routines for gym-goers. Talk to the gym owner about how you could help their clientele and support their business so they have a stake in your success. If you go this route, you will need to investigate personal liability insurance, possibly sign a contract with the gym, and likely pay a fee or percentage of your fees to the gym-owner. But it can be a great way to build a referral network and capture new clients.

    Find the Right Niche

    In a smaller town or an area with few competitors, your business could succeed by offering generalized services to all. In larger towns and cities, with multiple PT clinics, you could achieve success by specializing. While you may have a gut feeling about what your town needs, look at the data.

    Again, look for gaps in the marketplace.  Research your area’s demographics. If the population is aging, and there is no geriatric clinic in town, there could be a need. Has enrollment in youth sports been on the upswing, but your city lacks a teen sports rehabilitation clinic? This could be your niche.

    Consider both current and future needs. If your neighborhood or zip code has a declining birth rate, a teen clinic might not be viable in the long-term. On the other hand, if young families are continuing to move into the neighborhood, it will replenish your patient pool.

    Relying on data to inform which niche you choose turns a gut feeling into a wise business decision.

    Focus on Patient Retention

    Patient churn rate, or the number of patients through your doors, can hurt your business. If it costs you an average of $200 to attract a new patient and you are continually losing and having to replace patients, your marketing budget could balloon. One of the best ways to grow your business is to maintain a solid base of satisfied patients.

    Keeping patients happy does not mean telling them what they want to hear, but it does mean providing superior care. Take the time to listen to their complaints and concerns, and to build a relationship with them. Always be ready for each appointment, review charts and past sessions before their appointment time so that you can give them your full attention.

    Build loyalty and a sense of teamwork to keep patients from dropping out before completing their course of treatment. Use language that suggests you are working together towards a goal. Make educating your patients a part of your practice, as this empowers them and increases compliance. If they understand why you are asking them to perform an exercise, and why it will benefit them, they will be less resistant.

    When scheduling your time, plan on devoting a portion of your day to both retaining and attracting new customers.

    Market your Physical Therapy Clinic

    You could offer superior patient care, reasonable rates, and a pleasant and inviting environment, but if no one knows your clinic exists, you will find it challenging to bring in patients. Build a marketing strategy into your business plan so that patients can find your services.

    Partnerships can also help your business grow. Offer free injury-prevention or stretching workshops at a local nursing home. Talk to a large high-school about coaching or working with their coaches on proper weightlifting form. Giving back to your community increases goodwill, word-of-mouth, and builds your reputation.

    In all marketing materials, keep it positive and focus on the benefits of psychical therapy. Talk about how working with you will help people, and include patient testimonials. If you have a set fee schedule or are focusing on a niche, consider hiring a marketing professional to write and design brochures or welcome packets. Have them professionally printed, and use them as sales tools.

    Many people start their search for a new provider online, and harnessing the power of social media and establishing an online presence will draw in new patients. Share helpful tips and articles on social media channels, and provide value to those who follow you. Pay to put up a professional website that includes basic information such as which insurance companies you work with, your credentials, and your hours and location.

    Solicit referrals and online reviews from current patients though it is important to be respectful of their time and the occasion. Do not ask while in the midst of a session. Ask them to recommend your services, or incentivize them by offering a discount if you sell subscription-based services.

    Know your Numbers

    What is your clinic’s breakeven point? The breakeven point is where your cash inflows meet your cash outflows, or revenues cover expenses. How many patients do you need to see monthly to reach this point? Knowing your numbers guides savvy business decisions and helps you set profitability goals.

    Net income, return on investment, get used to calculating ratios and studying financial statements to help you run and grow your business. You will have to add some of the skills of running a business to your skill portfolio or plan on paying to outsource to professionals.

    While, of course, you care about every patient, some patients represent greater value to your business. Invest in software that tracks the average number of patient visits per condition, how much you are paid for each treatment, patient referrals, and average net income per patient.

    These numbers will guide future business decisions. For example, if a particular injury has a significantly higher than margin than another, you could focus your marketing efforts on patients with that injury to grow revenues.  If your metrics show that patients in the 40-50-year-old band refer twice as many patients as other age groups, focus on keeping those patients happy.

    The Final Word on Business Loans for a Physical Therapy Practice

    Opening a physical therapy practice may be a dream come true, but it will turn into a nightmare if you have not taken the time to build a strong business plan. This plan should include the market need or gap in services that your practice will address, how you will bring in new business, and how you will finance your practice. To learn more about available financing options, reach out to Shield Funding today.

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