Start-up finance for your medical practice

Traditional lenders are only interested in lending to established businesses with years of audited accounts. Even the new breed of online business lenders usually want evidence of a year’s trading, with online accounts and VAT returns before they will consider an application. As a start-up, your practice has no trading history - so they have no evidence that they will be repaid; they see the risk as too high for lending.

But you will need a high level of finance to set up your own medical practice. You will need premises, equipment, marketing, and working finance until you have built up a patient list and become profitable.

At Rangewell, we know that there are solutions. Whether you borrow money, dip into your savings, look for equity investors or go another route, you need to understand all your options before you choose. At Rangewell, we can show you all the options, and we have a 5-step plan to help you to secure the finance you need.

The Rangewell 5-step plan to help you set up your own medical practice.

Step 1

Your first step should be to ensure you understand the real costs and challenges your new practice will present. If you are serious about running your own practice, you should be able to decide on a clear figure of just how much finance you will need, and be able to explain exactly how you will use it.

Step 2

Then ensure that your own personal financial situation has no issues like outstanding debts, CCJs or other negatives. You may need to provide a personal guarantee to secure the funding you need, and although as a medical practitioner you represent a good prospect for lenders, the better your credit status, the better deal you may get.

Step 3

Prepare a business plan with a forecast profit and loss, your balance sheet and your cashflow. This should help you see how much funding you need and help lenders or investors understand the potential of your practice. You may need to include forecasts for two or three years ahead as your patient list builds.

Step 4

Now simply contact us. We’ll help you use your business plan as a tool to help secure the funding you need. Because we work across the entire UK lending market, we know which lenders to approach.

Step 5

We will find lenders who are prepared to provide the finance you need and use our unique online system to ensure you can secure the funds you want at the most competitive rate.

The types of funding you might need to set up your practice

A Commercial Mortgage

Premises will be a major cost for your new practice, but buying with a commercial mortgage may cut costs compared with leasing. Commercial Mortgages work much like a residential mortgage and can be used to help you buy a surgery or even a  complete existing practice.

Commercial Property Finance is arranged on an individual basis, and your rates and terms will be agreed based on your business plans.

Commercial Loans

There are two main types of commercial loan - Secured and Unsecured which could help provide the funding you need.

Secured Loans must be supported by security, such as your home, that the lender would take and sell if you became unable to make repayments. This reduces the risk to lenders and allows them to reduce the cost to you, with rates that can be as low as 2% above base rate, and ten or more years to repay. Larger sums may be available with a secured loan.

Unsecured business loans are a straightforward way of borrowing and operate much in the same way as a personal loan. The loan is repaid in monthly or quarterly instalments over an agreed term under 5 years. Decisions can be fast but you will need to provide a Personal Guarantee meaning that you will become personally liable for the debt if your business was unable to pay.

Asset Finance

Asset Finance covers a range of funding solutions designed to let you spread the cost of everything you need to equip your practice:

Hire Purchase lets you acquire equipment straight away, with a single deposit payment. It then lets you spread the costs in regular monthly instalments over up to 5 years. At the end of this term, you own the asset outright, making it ideal for items which have a high cost and a relatively long life.

Leasing works much like a rental agreement. It lets you use the equipment without having to buy it, with a payment each month to the finance company. For technical equipment which could go out of date, leasing can be ideal, as it can be easy to update when a better model becomes available. Leasing can also include maintenance agreements - meaning that keeping your equipment in perfect condition remains the responsibility of the lender - helping you avoid any unexpected costs.

Government-backed Start-up Loans

Government-supported start-up loans are now available for entrepreneurs looking to start a business. The scheme is designed for individuals over the age of 18 who have a viable business plan, but no access to finance. The scheme can provide loans to businesses in every sector, which means that they may be worth considering for your practice - particularly if it is a location not well served by existing doctors

‘Jigsaw’ Finance

Setting up a practice may mean finding the solution to a wide range of funding needs. We can provide Jigsaw Finance for your medical practice - a bespoke package made up of the most appropriate type of funding for each one. We have found that it can help access a higher level of funding that could be provided by a single finance option - and reduce costs.

The finance you need

At Rangewell, we will work with you to understand your plans for your practice, and use our expertise to help find the funding that meets your needs. We can find the most competitive rates for all types of finance, including Professional Loans, Unsecured and Secured Loans, Invoice Finance, Asset Finance, Merchant Cash Advance, Commercial Mortgages, Growth Finance and more.

To find out more about setting up the most appropriate finance for doctors to start a new practice or even buy a competitor, simply call us. From setting up a private medical practice to refurbishing a medical practice, our experts are ready to help.