Episode 1944 - Starting your own practice, pt. 4: financing
Mar 27, 2025
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Discover essential funding strategies for starting a therapy practice. Tips include utilizing grants for low-risk financing and exploring loans and credit options. Learn about tracking expenses to unlock tax savings and maximize your startup capital. Plus, gain insights on engaging with the community through social media and events for support and growth.
Prioritizing grants as a funding source is essential for starting a therapy business, as they provide non-repayable financial support.
Understanding the potential tax benefits from personal contributions and tracking expenses is crucial for the financial management of a new practice.
Deep dives
Understanding Grant Funding
Grants are identified as the most advantageous source of funding for starting a therapy business, as they represent free money without the expectation of repayment. It is crucial to prioritize searching for grants before considering other funding options; this includes federal, state, and local grants. Grant resources can be found on platforms like grants.gov, which lists a variety of federal grants, though many may not apply directly to therapy practices. Additionally, local small business departments often have grant programs that might offer funding specifically tailored to individuals from underrepresented groups, such as veterans and women entrepreneurs.
Navigating Loans for Funding
If grant options are exhausted, the next step involves considering loans as a funding source, including personal contributions or loans from friends and family. Classifying these contributions as loans can provide tax advantages, as the interest payments are tax-deductible business expenses. Small business loans from the Small Business Administration are recommended, as they typically come with lower interest rates compared to conventional banks. It is advised to approach credit cards as a last resort due to their high interest rates, which can significantly impact a new business's finances if not managed properly.
Smart Self-Funding Strategies
Self-funding is common in the early stages of starting a practice, but it's essential to track these contributions carefully for tax purposes. Contributions can be classified in a manner that reduces taxable income for the year, acting as a deduction for the business. Even small amounts invested early on can add up, reducing overall tax liability and improving financial sustainability. Proper documentation, such as receipts for contributions, ensures that funds are reported accurately, which is vital for both legal and financial management of the business.
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Exploring Funding Options for Therapy Practice Startups
Alan Fredendall // #LeadershipThursday // www.ptonice.com In today's episode of the PT on ICE Daily Show, ICE COO Alan Fredendall discusses the methods in which a new practice owner can fund their business including grants, self-contributions, loans, and credit cards. Alan challenges listeners to exhaust federal, state, county, and city grant options which may provide small, but free funding. In addition, he shares insights on how to reap tax benefits for potential owners considering using their own money to fund the start of their practice.