Loans for Health Businesses During Corona Virus Outbreak

Updated on April 5, 2020


The COVID-19 pandemic has posed major challenges for the entire world. It has affected lives, destroyed businesses, and caused the world to witness yet another episode of a severe recession. So much so that it has become almost impossible for many individuals and ventures to stand on their feet again quickly. However, the sweeping bill amounting to $2 trillion is all set to pull the victims out of the quagmire.

After its passage, the program is expected to receive millions of applications from those who need assurance and empowerment to regain their ground. The envisaged funds will provide much-needed support to the struggling health sector and enable businesses to retain their employees and overcome finance-related issues. 

The major areas that are expected to receive the impact include small businesses, large entities, state institutions, Federal Safety Net, education, and the health sector that is battling the outbreak. The situation is particularly tense at hospitals as they are struggling to survive and manage the critical functions of their work.

The Rise in Demand for Loans

Several healthcare businesses are considering letting their employees go and other similar measures to bear the cost of providing critical care. On top of that, they have the responsibility to make sure that the institutions remain infection-free for the visitors and practitioners. While a sum of $100 billion for the hospitals has been proposed in the legislation, it is indeed beneficial to look for other options and make an informed decision. This article will look at the loans that a healthcare business can acquire in such a situation of uncertainty and heightened challenges. 

But before we begin to explore different types of business loans, it is important to remember that we should never settle for unrealistic or too-good-to-be-true rates. You may want to look into some good online resources to have a fair idea of some small business loans rates. Now, let’s find out what the government and the private sector are offering to support small and large businesses. Doing so will enable you to keep your venture running and thriving.

State Loans

  1. SBA Loan

Any healthcare business, irrespective of its standing, can benefit from the state’s loan to help get back on its feet. The government, through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, has made it easier for a venture to receive the necessary financing. Now, a business can acquire the funds anywhere between $5 million to $10 million. The loan can enable a healthcare operation to pay salaries to the employees, make up for insurance premiums, support its payroll, and fulfill any debt obligations. A business, non-profit institution, or a veteran organization operating with less than 500 employees can qualify for this loan.

  1. Paycheck Protection Program

This program makes sure that no business has to shut or begin any layoffs because of inadequate funds. Again, this loan is designed to help an organization to pay its employees and cover for all the essential utilities and functioning. This program is different than the rest of the loans in terms of its convenience and feasibility. Any business can acquire funds through this module without having to collateralize any assets or give any credit or personal guarantees. The only eligibility is that the business must have been operational before February 2020. The government is providing a full guarantee on this loan throughout the current year, thus adding further feasibility to the program.

  1. Economic Injury Disaster Loans

Under the CARES Act, the state has allocated $10 billion to assist healthcare, and other businesses recover from the current situation. However, the loan is applicable only in a state where the governor has announced an emergency under the Stafford Act. Through this loan, a business can borrow a sum of up to $2 billion to fulfill all basic payment functions.

Private Loans

  1. Financial Institution

Any healthcare business struggling to survive in the current scenario can borrow a loan through a financial institution. Mostly, these funds can be borrowed by getting in touch with the sales teams associated with the sector. In addition to an independent institution, you can also borrow from a bank, but it may have strict eligibility criteria for lending any money. For instance, it requires a business to have a positive credit rating, a clean record of repayment, and functional operation.

  1. Physician-Specific Loans

This loan is specifically helpful for healthcare business owners and managers to tackle the looming financial recession. In this case, no borrower has to wait for several days to get the much necessary capital. Also, these don’t come with tough conditions, such as a typical credit criterion or previous good record. The way to acquire these loans is through an online lender, and the amount could be anywhere from $5000 to $500,000. However, the amount you can borrow depends on your monthly deposits and the organization’s performance. Again, this is a suitable option for healthcare businesses wanting urgent capital because it requires little paperwork or effort to acquire the funds.

  1. Specialty Finance Loans

If you run a healthcare business, then you would truly want to opt for this loan as it is relatively more convenient. The lender, in this case, may offer an agreement with a shorter maturity, usually less than one year. This means that the repayment will have to be much faster. But the good thing with these loans is they typically do not require collateral and are issued in a comparatively smaller timeframe.


Healthcare is the basic need of every citizen, and it must be made affordable at all costs. When a country faces a crisis-like situation, it must take measures to ensure that quality care and resources of wellbeing are within every citizen’s reach. The crisis has made it imperative for several healthcare businesses to borrow loans, so they can avoid layoffs or face difficulties in running their operations. It is immensely important for them to develop sustainability and ensure medical assistance to the masses. Only an effective, viable, and foreseeable financial strategy can save the nation from chaos or collapse.

Throughout the year, our writers feature fresh, in-depth, and relevant information for our audience of 40,000+ healthcare leaders and professionals. As a healthcare business publication, we cover and cherish our relationship with the entire health care industry including administrators, nurses, physicians, physical therapists, pharmacists, and more. We cover a broad spectrum from hospitals to medical offices to outpatient services to eye surgery centers to university settings. We focus on rehabilitation, nursing homes, home care, hospice as well as men’s health, women’s heath, and pediatrics.