Clinics in Lackawanna County, where health care is the largest sector, often fund equipment, space and payroll at the same time. Orchardmark Financial, a small-business funding broker in Scranton, Pennsylvania, explains why each is a separate funding decision with its own structure, and what lending partners review. Partners decide and set every rate and term.
Why health care is the place to start in Lackawanna County, PA
Health care and social assistance had more employer establishments than any other sector in Lackawanna County in 2023, 810, and paid the most in wages, about $1.19 billion of the county's $4.49 billion total (U.S. Census Bureau, County Business Patterns 2023). The outpatient side alone, the offices and clinics where patients are seen, counted 530 establishments with 8,852 paid employees, and 241 of those establishments had fewer than five employees.
So a typical clinic here is small, and when it expands, the expansion is a large share of the business.
Decision 1: the equipment
Exam tables, diagnostic devices, imaging, sterilization and IT each have a price and a useful life, which makes them a natural fit for equipment financing. The device secures the balance, the term can track how long it will be used, and a lease can make sense for technology that will be replaced in a few years. Before comparing offers, the equipment payment calculator gives the monthly payment, total interest and total cost for a price, down payment, rate and term.
Medical device financing tends to come with closer questions than general equipment, because a used ultrasound has a narrower resale market than a used van. Expect the partner to ask for the vendor quote, the model and whether the device is new or refurbished.
Decision 2: the space
A second exam room, a larger suite or a fit-out of leased space is a one-time cost that pays off over years, which usually suits a term loan. Partners want the contractor's bid, the lease and its remaining term, and a realistic plan for how many more patients the space will hold. Orchardmark Financial does not arrange mortgages, so buying a building is outside what we do; fitting out a leased space is not.
Where clinics sit matters for that plan. ZIP 18411, around Clarks Summit, had 102 health care establishments in 2023, and ZIP 18503, around our Biden Street address, had 73 (U.S. Census Bureau, ZIP Code Business Patterns 2023). A clinic opening near others of its kind will be asked how it expects to draw patients.
Decision 3: the payroll
New space and new equipment need staff, and staff are paid every two weeks whether or not insurers have paid for the visits they handled. That gap between payroll and collections is the third decision, and it suits short-term money: working capital for a gap with a clear end, or a credit line if it will recur. Funding payroll with a five-year loan means paying interest long after the gap has closed.
The order matters
- Firm up the space plan first, because it sets how much equipment fits and how many staff are needed.
- Price the equipment against the plan, one item or room at a time.
- Estimate the payroll gap from hiring date to the first full month of new collections.
- Only then decide which structure covers which piece.
Working backwards from a single loan amount usually leaves one piece underfunded, most often the payroll gap.
What partners look at for a clinic
Collections history, payer mix, existing equipment leases and loans, business and personal tax returns, and the quotes and bids for the project. A clinic that relies on one dominant payer, or whose collections lag production by months, should expect questions about that first. Financing for medical and dental practices covers each structure in more depth, and the blog has related articles.
By Orchardmark Financial · Updated
