Medical Practice Loans: Business Finance For Doctors | Rangewell

What can a business loan be used for?

Whether you are already working in private medical practice or considering setting up your own surgery or specialised clinic, we can help you find the right type of funding option to:

Loans to buy a medical practice or become a partner

Buying into an existing practice as a partner, or buying it outright from a retiring partner, generally requires a substantial investment. Before making an offer, you must determine the value of the practice itself. It’s important to assess the overall performance of the business to understand its current value. The patient base, the premises and equipment, and the value of any NHS contract need to be understood and assessed before you negotiate.

Medical financing companies will seek to verify this valuation with their own independent assessment, so the more accurate you can be, the more likely you are to receive the finance you need. 

We can help you arrange a number of solutions to let you buy into an established practice. A Secured Loan is one answer, with the security provided by the practice itself. Another alternative may be a Partner Equity Loan. This can take the form of an interest-only loan with a term of up to 25 years, which can be the most cost-efficient way to buy into a practice.

If you are thinking of buying into a large practice, you may need to do so as a partner – or buy out a partner who may be retiring. Buy in and Buyout finance recognises the challenges and provides GP practice funding tailored to help you make full use of the opportunity.

Setting up a new doctor’s practice

As a doctor, setting up your own practice will carry some substantial costs. From initial purchases to ongoing operating costs, you may need finance to help provide the cashflow needed for you to achieve your goals. 

The first cost you’ll face is that of the premises itself.  Most practices are purchased with a rental agreement that must be repaid for several years. There may also be substantial equipment costs, depending on your speciality. You’ll also have staff and operating costs to provide for. A receptionist will be essential, and you are likely to need an assistant. Electricity and business rates will have to be paid for.

Remember, simply opening the door for business will not bring in patients. You will need funding while you become established and build a patient list. Once you’ve established the practice, you may be able to secure public funding – but private finance is always an option to help you bolster cashflow and make new investments. 

If the practice starts poorly, you may need to borrow working capital to keep your practice running until it becomes profitable, which could mean having months of operating expenses to cover. In all of these cases, medical practice finance can help you. 

Funding for large facilities

If you are looking at the costs of setting up a large clinic or small private hospital, you may be looking at funding of several million pounds. At Rangewell, we are experienced in large-scale development and medical funding, meaning no loan requirement is too much. We can help you find lenders that will meet the level of funding you need, negotiate an agreement, field offers and guide you to the best choice for your practice’s ongoing success. 

Contact us to find out more about funding for major facilities or even development finance for new buildings. 

What medical equipment can be funded?

Medical equipment is essential to successfully operating a GP practice or private clinic. Equipping your facility with the right equipment ensures you meet regulatory standards, but also enables you to provide a higher level of care. 

Medical equipment can be costly, as each practice will have specific needs and specialisms. Equipment needs may include:

What finance options are available for medical equipment?

Medical assets are usually highly specialised and command premium prices as a result. In many cases, this high value is a benefit for practices as it enables financing through asset funding. In our experience as medical practice financing experts, we have found that asset finance provides the most cost-effective solutions for most kinds of equipment you will use. 

Asset finance is a broad term that encapsulates different types of loans, but the basic concept is that you’ll be able to purchase the asset and the lender secures the loan against the asset’s value. This means, in the event of a default, the asset would be reclaimed by the lender – but it also means you don’t need to offer personal security and there’s less of a burden on the practice itself to prove financial performance. 

Hire Purchase

If you need equipment that you want to go on giving service for years, Hire Purchase can provide the solution. You can have up to five years to spread the costs of most types of equipment your surgery or clinic will need.

If you need the latest equipment without the cost of owning it, leasing will give you the freedom and flexibility you need. Leasing can mean that responsibility for maintenance remains with the leasing company, reducing demands on your time as well as reducing costs.

Vehicle finance

Asset finance solutions such as Contract Hire can be the most cost-effective way to provide a vehicle, which could be essential to make house calls.

Vehicle Finance could help you cut the cost of the vehicles you need.

New or used?

Good quality used equipment can be a sound investment, especially if you are setting up a new practice. However, many medical professionals miss out on the potential savings because they believe they need to find the cash to pay for it.

At Rangewell we can help you spread the cost of used as well as new equipment with Asset Finance.

Funding to buy your GP premises

If your premises is in a good location, ideally with parking and public transport nearby, the cost to purchase it may be significant. Even if you don’t intend to buy the practice outright, you may need help raising the deposit on a long-term lease.

Alternatively, you might want to buy your practice with a Commercial Mortgage. Not only will buying your premises protect your practice from rent increases, but it could also provide you with a valuable asset.

Commercial Property Finance is arranged on an individual basis. A Commercial Mortgage could help you find solutions, whether you want to acquire your existing medical premises from your landlord or look at developing a new one in a different location.

Running and growing costs for your medical practice

Your existing practice will have ongoing costs that you need to deal with. You may want to refurbish your premises, for example, or buy smaller pieces of equipment. You might want to fund growth, take on staff or set up a treatment room for a junior practitioner. You might also need to deal with more cash flow issues, especially in the early stages of a new practice.

Lenders offer a variety of different loan types which can suit these needs. Medical practice commercial loans include options such as:

Practice Loans

This type of lending recognises your status as a doctor and does not require security. It can provide a relatively high level of funding at a preferential rate of interest, which you may use for any purpose connected with your practice. Extending or refurbishing your practice, taking on staff, training or acquiring a competitor, or bringing in facilities to allow you to offer new treatments, such as cosmetic work can all be made easier to afford.

Practice loans can be used for many purposes including:

Find out more by contacting us.

This content was originally published here.