Securing £265,000 of Property Finance for a GP

By Richard Mitchell
Content writer
Published: 8 October 2019 | Last update: 8 November 20211 minute read

As a GP or a consultant, your patients probably identify your practice by your premises.  Moving your practice can mean losing patients who value familiar surroundings when they come in to see you.

What’s more, your current premises have probably helped you build your practice. The right location, one that is convenient for patients, with parking and public transport is a major business asset. But what can you do if your premises are no longer adequate for a growing practice?

One solution - if you own the premises your practice works from - is to extend them. It may mean some disruption - but with the right funding and forward planning, it could offer a more convenient and more profitable future for your practice. 

We recently helped a small practice make a major step forward by extending their premises. 

Our clients were partners in an established father and son practice. The practice owned the freehold of their surgery, which was in an excellent corner location, close to the heart of a large town in the south of England.

Both doctors were keen to generate more revenue and recognised that an extension to their premises might give them the means to do so.

It would let them:

  • Take on a junior partner to allow them to see more patients and reduce waiting times
  • Bring in a nurse practitioner who could take care of minor cases, and deal with tests and preliminary examinations
  • Generate revenue by letting out rooms to other healthcare professionals
  • Allow the renegotiation of their NHS contract

The son had explored some of the possibilities and had already had interest from the local hospital to use two rooms to provide community-based treatments. He had also interest from friends with practices of their own, one a chiropractor and the other an audiologist, who were eager to rent rooms - thus allowing the practice to establish itself as a health hub for the town, and offering the obvious opportunity to grow as a result by bringing in more patients.

He had drawn up plans for a three-floor extension that would put five new rooms into the practice while making only a small impact on the area currently serving as a car park behind it. 

Do you need to fund development to expand your business? Find out more here.

The costs for the build in total was around £400,000. The doctors had managed to secure part of the funding for the extension from the NHS, who had agreed to contribute 33.33% of the total cost.  

They had also assembled a sound business case for how additional revenue would be generated by letting out rooms to other healthcare professionals.

About property development finance

Property development ranges from the basic refurbishment of existing premises to major building work to provide extensions, to complete new structures. It can therefore require several different types of lending. These include specialised lending products aimed at developers, which can provide ways to fund the purchase of property as well as to fund the work required on it - but as a medical professional, this type of lending may not be necessary. 

A straightforward secured business loan might provide a simpler way to fund most types of building work that you are likely to be considering.

What's more, as a medical professional, you may be eligible for lending at particularly attractive rates. Rangewell’s expertise can be key to securing these rates for you.

How we helped

Our clients needed to find finance for the remaining £265,000 required for the project. 

The doctors had already approached their own bank and had been offered a loan at 3.50% above base rate over a 20-year term, but believed that it would be possible to be better this, and so reduce their monthly repayment commitment. 

At Rangewell, we were determined to prove them right. 

We were able to find three different lenders  - themselves all major banks - interested in funding the project. By using this interest as the basis of negotiations, we were able to persuade the doctors’ bank to reduce their rate to 2.45% above base rate – resulting in a substantial saving in monthly payments and the overall cost of the project.

 The funding Rangewell arranged: 

£265,000 over 20 years capital and interest at 2.45% above base rate currently 0.75% (as at August 2019). 

Monthly £1,496 

Annually £17,952. 

The expected new income from the new rooms was far in excess of the loan repayments, and the doctors were happy to start work on their new venture. 

At Rangewell, we can help medical professionals - and others - find better answers to all types of funding challenges. That means, whatever the need, a call to us can save you money, and help your practice do more. Our service is independent, fast and absolutely free.

Simply call us at Rangewell on 020 3637 4150 - or email  contact@Rangewell.com.

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