Medical Practice Loans
Medical Practice Loans are typically available from three types of lenders:
- SBA Lenders
- Healthcare Financing department of Traditional Banks
- Specialty Medical Practice Lenders
This post is about non-SBA options. If you need info about Medical Practice Business Loans from the SBA then click here.
Medical Practice Loan Options
1. “Bank” Medical Practice Financing
There are many banks and lenders that offer medical practice loans. Most offer 100% financing at below market rates for up to 10 years on practice debt and some will offer longer terms and amortizations up to 15 years.
If the transaction includes real estate then they will consider 20 to 25 year loans.
Most lenders will finance Dental and Veterinary practices in the “medical practice” category, and some will consider physical therapy clinics as well as (strong) chiropractic practices, although more often than not PT and doctors of Chiropractic will fall under the domain of SBA lenders.
Funds are available for refinancing existing practice debt, purchase/acquisition of an existing practice as well as start up for qualified doctors with at least 2 years clinical experience and strong personal credit and collateral.
2. Specialty Lenders:
Specialty lenders also lend to Dentists, Optometrists, Opthalmologists, Veterinarians and Pharmacists
- Minimum Credit Score: none, but 675 or better preferred
- Global Debt Service Coverage Ratio: ideally 1.20 or better
- Fees: vary
- Prepayment Penalty: varies
- Practice Purchase/Medical Practice Acquisition Loans
- Partnership buy-in or partner buy-out
- Practice Start-up Loans for dentists and veterinarians and practice expansion loans (2nd location) for Medical and Optometry. (Available with deferred or graduated payment options).
- Equipment and Tenant Improvement
Both FIXED and Variable Rate Loans available with amortization of 3 to 15 years. Variable rates can adjust at 3 or 5 years.
3. Application Only Loans
Application only loans are available to medical doctors, dentists, veterinarians and optometrists for equipment and tenant improvements up to $200K assuming a 700+ credit score.
- Loans are for existing practices that are at least 2 years old.
- Terms are 3 to 7 years.
- The tenant improvement portion may be limited to 30% of the loan amount.
- Working capital loans are available up to $50,000.
- Competitive rates
4. Quick Close “Signature” Loan
Quick close working capital loans with no (hard) collateral required are also available.
They can be relatively expensive but can provide a decent fix to a short term cash need and the whole process is handled electronically.
Doctors who have used the program have found it helpful in the following situations:
- meeting payroll
- hiring additional staff
- consolidating debt
- equipment purchase
- tenant improvements
- Rates start at 8.99 % for 720 plus credit scores (higher “double digit” rates for lower credit scores)
- Maximum Loan: $200,000 ($20,000 minimum)
- Moderate pre-payment penalties
- Doc prep fee $2000 (this fee is financed so there is no out of pocket)
- 7 year term
- Approval within 3 business days of receipt of loan documentation
Loan can fund in as little as 5 days
- Minimum credit (FICO) score of 660
- Minimum income of $150,000
- Valid medical license (good standing)
- Maximum Debt to Income ratio of 65% or less Debt 45% of income
For more information about any of the above medical pracitce loans contact:
jking(at)greencommercialcapital(dot)com or call 1-800-414-5285