a personal loan provided by your practice
As a medical or health professional, you may run a practice that creates wealth, but leaves you unable access the results of your hard work.
As a doctor, dentist, optician, chiropractor, vet or other medical professional, you run a practice that is also a business. As a business, it may be very lucrative - but it presents a problem.
The business may pay you a salary, wages or director's fees, but you cannot simply withdraw money from its funds, even if the business is yours without running into tax and legal problems. Even if you could, taking funds from your business could reduce its available working capital, cashflow and potential for growth.
A Goodwill Loan could be the solution. It can help you benefit from the wealth you have created, with no impact on your practice, because it leaves the funds in your business bank account untouched.
What is a Goodwill Loan?
Goodwill Loans, also known as Capital Withdrawal Loans or Cash Outs, are a way of accessing the value in your business, without withdrawing funds - and so help you avoid causing potential cashflow difficulties for your business, or major tax liabilities for yourself.
They let you use the goodwill built up in the practice or business as the security for a loan. The sum you could access might be comparable to your annual turnover, which with a busy practice could mean a very substantial sum.
What's more, you can use the funds released by a Goodwill Loan as you wish. You are not restricted to business purposes.
How it works
A Goodwill Loan is secured on the value of your business, as assessed by the lender on the strength of your accounts. It can bring you a sum typically between £50,000 and £500,000, with repayment terms of up to 15 years.
Interest rates will be agreed when the loan is taken out, and although they will be variable are likely to remain significantly more favourable than those provided by other lending methods.
Repayments can be made from your pre-tax profits - meaning that a Goodwill Loan can be a particularly tax-efficient way to obtain the funds you need.
How can you use your Goodwill Loan?
The Goodwill Loan can be used in any way that you wish.
You can invest in your practice. The scale of funds involved could make it possible to buy a competitor, or to set up a satellite practice. You might prefer to buy premises or to invest in a range of equipment that would let you extend the list of treatments that you offer.
But there is no need to use your loan to support your practice. Many practice owners use their Goodwill loan to buy investment property, including property overseas. Others will use them to pay for family costs like school or college fees. Some are keen to use their loan, or to buy another business as a sideline, or as a retirement project.
Some simply use their loan to buy something that they have always wanted, such as a boat or a light aircraft.
A Goodwill Loan may also provide a shrewd way to support retirement planning, or investment asset acquisition.
Who can have a Goodwill Loan?
Goodwill Loans can be arranged for individuals who operate a professional medical or related practice as a sole trader, as a partner or as limited company with a simple structure.
Suitable professions include:
Setting up a Goodwill Loan
A Goodwill Loan can be an important additional asset for your personal financial plans, and give you a great deal of extra spending power.
At Rangewell, we have helped a wide range of professional people use Goodwill Loans. We can explain the potential of this type of lending, assess your practice for suitability, and help you approach the most suitable lenders.
When you call us, we can explain the options – and find you the most competitive solutions which will bring you the funds you want.
REAL EXAMPLES OF WHAT WE CAN DO
Find a lender to provide a Goodwill Loan to allow a vet to invest in three small houses - the rental income from which would cover the repayments on the loan
Help arrange a Goodwill Loan for an optician, which would allow him to put his two children through private school and university
Helped arrange a Goodwill Loan to allow a dentist to buy a light aircraft
Find funding to allow a pharmacist to buy a small hotel in France
Help set up Goodwill Loans for two partners, which would allow each one to borrow £250,000 to invest in commercial property
Helping you build your profits
Cash never leaves your businessA Goodwill Loan leaves your business finances completely unaffected.
Versatile fundingA Goodwill Loan can be used for any purpose, from investment or buying property to the holiday of a lifetime.
No need for extra securityGoodwill Loans are secured on the future performance of your practice - there is no need to put your assets or possessions at risk.
Competitive rate fundingGoodwill loans represent a cost-effective way to borrow, as repayment rates can be very competitive.
Early repayment optionsSome Goodwill Loan providers will accept early repayments, reducing the total cost of your borrowing
No tax implicationsYour Goodwill loan will let you benefit from the value built up in your practice, with no negative tax implications for you or your business.
Download Rangewell’s free and detailed guide to Goodwill loans
- How do Goodwill Loans work?
- How can they provide extra funds for you - without reducing funds available for your business?
- Why you must find the right lender to cut costs
- The downsides of borrowing
- What paperwork you need?
- Guarantees and security
- Key Terms to check
An additional commitmentA Goodwill Loan is a long-term commitment, with ongoing monthly repayments.
You may need to repayIf you sell your business, you may need to repay your Goodwill Loan.
A personal liabilityThe loan will be secured on your practice, but you may be personally responsible for repayment.
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