Medical Laboratory-Debt or Equity Financing

Gav-Med Solutions encourages the selling of your business idea to banks or investors but some MEDICAL TECHNOLOGISTS do not know the difference between selling to a bank and selling to an investor. Selling your idea of starting a medical lab to a bank is referred to as Debt financing while selling your idea to an investor(s) is referred to as Equity financing. In both instances your have to use SALES IN LABORATORY MEDICINE in order to persuade other people to give you their money to fund your dreams. Is it better to use debt or equity financing to start a medical lab? It is going to require bringing money from outside whenever you decide to start a Medical Laboratory. The two primary options are to leverage business debt financing using banks or fundraising using equity investors. You have to determine which method is best for you to start a Medical Laboratory because each can carry its own pros and cons.

DEBT FINANCING

Everyone is familiar with debt whether it is student loan debt, using a credit card, a mortgage or an auto loan. Debt simply means you are borrowing money in order to finance an idea (such as starting a medical lab). Once you are using debt financing you will have to pay monthly installments, over a fixed period of time at a specific interest rate. The most notable advantage of using debt versus equity is ownership and control, and with debt financing you do not give up any controlling interests. You own the Medical Laboratory, make all the decisions, keep all the profits. Business debt can also lead to tax deductions and make a huge impact in net profits and yield positive revenues.

EQUITY FINANCING

Using this method, you are simply taking money from investors for ownership rights in your Medical Laboratory. There are no monthly loan installments repaid but equity investors receive a percentage of the profits based on their shares in your Medical Laboratory. This method has the potential to bring in more money than using only debt. You don't have the stress of loan repayments if your Medical Laboratory is not making a profit. Good equity investors can use their influence and connections to help your Medical Laboratory secure more attractive debt in the future. Before you start looking for money to start a Medical Laboratory, you should spend time to understand debt and equity financing. It always good to get legal advice from corporate lawyers that have closed similar business transactions before using either debt or equity financing to start your Medical Laboratory.