Refinance Your GP Practice Loan to Save Money

As most GPs know, one finance company was the go-to provider for practice loans for many years. Practice loans don’t require security and offer favourable interest rates – but many also carry strict restrictions on exit terms. For many UK doctors, these restrictions are now leading to frustration and challenges that limit their ability to raise additional finance to expand their practice or even block them from paying off the loan early in order to retire. 

Nowadays, many of these loans are approaching a refinancing window. Our team is here to help you find a provider more suited to your requirements. We know the healthcare industry inside and out and can quickly identify the right lenders after an initial consultation. We can help you overcome some of the more demanding problems associated with your existing lender such as expensive break costs, all at no cost to you. 

Before you reach your refinancing date, it pays to discover which lenders may be able to help you, what finance agreements they could offer and how the refinancing process will impact you. After repaying the same practice loan for years, we can virtually guarantee a better offer and a cheaper loan – so get in touch today. 

What is refinancing? 

Refinancing, in its simplest sense, is renegotiating an existing loan. In most cases, that means moving to another provider with increased repayment timelines or reduced interest rates. You can stay with your existing lender too, though it’s always better to ‘shop around’ in the wider lender’s market to find the best deal. 

Refinancing can incur a ‘redemption fee’ where you have to pay a charge to your current lender. However, if you work with Rangewell we’ll help find lenders that can absorb this cost and allow you to refinance without disrupting your business. 

Why should GPs refinance? 

Refinancing offers both general benefits to GPs with all forms of business loan, as well as more specific advantages unique to GPs with long-standing practice loans. 

If you’ve taken out general business loans or other forms of finance such as asset finance, refinancing allows you to: 

• Release and utilise equity built up in an existing loan
• Switch to a longer-term loan with a lower interest rate, reducing your repayment amount to help ease cashflow
• Raise additional finance to help fund practice growth or expansion
• Move to a new provider with more straightforward exit terms to help plan retirement
• Switch to a different facility that allows for a Partner to take over as the primary 

If you're not convinced, take a look at this case study where we helped a GP move from a costly restrictive loan to a more affordable, flexible option. 

Refinancing practice loans

Most UK GPs own their practices, subject to loan repayments. This gives you a tangible asset that has, provided it is well maintained and operated successfully, been growing in value. As your property and business value grows, refinancing allows you to use this important leverage to negotiate a new deal. 

Refinancing to a new lender will incur many of the same processes you likely underwent in your initial loan. The lender will carry out due diligence on your property to determine its value and the physical condition of your practice. They will also appoint a solicitor to perform legal due diligence over all of the legal complexities involved with property and your business as a whole. 

Retirement or partner buy-out

One of the most obvious challenges for GP practice loans has been the high early repayment costs imposed by historic lenders. These costs dissuade GPs from exiting their loan even when they are financially able to do so and mean your loan can almost artificially stretch far beyond what you require. 

For GPs approaching retirement, this is an issue – you can’t simply sell the practice and move on, as you’ll be bound by the strict conditions of the loan. Refinancing can help you gain more control over your future as you can move to a different provider with less restrictive terms and subsequently exit when it suits you. 

Practice upgrades and expansions

When you want to grow your business, you may need to construct new parts of your practice to best utilise land – or simply upgrade/update the premises you already own. Both situations likely require finance, but taking on another loan on top of an existing practice loan can be expensive and intimidating. 

Rather than having to take out a new loan, refinancing may be able to free up equity you can use to fund the project. Alternatively, some lenders will purchase your existing debt and offer a further credit facility with an extended repayment window, which allows you to fund the project without increasing interest. With Rangewell acting on your behalf, we can often decrease your repayments even whilst securing a greater loan. 

Practice purchases and mergers

If you’re buying a different practice, merging with another surgery or permitting partners to buy into ownership, there’ll be a complex array of freehold conditions, finance arrangements and legal requirements to sort out. Refinancing from your existing practice loan will be a necessity in order to realign capital shares between all owners. 

Explore refinancing early

Don't wait until your loan terms allow you to refinance. Get in touch with us early and we'll help you understand the lender's market, identify the right lenders to suit your goals and support you throughout the application and negotiation process.  

Refinancing may seem unnecessary if you’ve had no issues with your existing provider. However, we would stress that in the case of GP practice loans, there’s a historical precedent for problems occurring when GPs don’t expect them to, such as when you’re approaching retirement and are then forced to pay break costs. 

Ultimately, why continue repaying a costly, restrictive loan when you don't have to? Get our help today and see how refinancing can help you.