If you are looking for support with loans or other finance in primary care we can help. We are experienced and independent and can find the right solution for you.
And the best bit..... if we source new finance there is no additional cost to you as the finance provider will pay us an introducer fee!
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Specialising in premises finance and re-finance plus partner buy-in and support for mergers
Finance for first-time practice purchase, re-finance for existing practices or for grow by acquisition or extension
Support for first-time purchase, re-finance, or for growth by acquisition, shop re-fits or cashflow funding
Doctors and General Practice as seen as low risk sector by almost all banks and finance providers. Set out below are the usual options BUT which is right for you will depend on your specific circumstances. Bear in mind there is far more to look at than the headline interest rate. See some examples in our 'Things to Consider' section
Becoming partner often involves needing to 'buy-in' to the partnership capital account. The amount will vary and it may be agreed to buy-in over several years by deduction from earnings. Usually however the new partners is asked to effectively pay-in with cash and needs to take a loan to cover. We can usually source unsecured finance with a variety of repayment options
Around 50% of GP Practices still own their own premises. However, concerns over the future can mean finding finance and a new partner to buy in when partners retire can cause problems. We can provide support with
We can also help facilitate a discussion on the best option for your practice and design a pathway to putting that solution in place.
Mergers can need finance but each case has its own challenges. If property is involved it can become a major issue. We can facilitate discussions about a property strategy and help provide sustainable finance with easier succession for future partners - see above.
Tax demands can cause cashflow issues and recent pension changes have meant some tax liabilities are greater than had been expected. We can help by sourcing tax finance enabling partners to spread the cost over time.
Mortgage providers usually need evidence of consistent earnings via a regular salary. GP Partners are self-employed and therefore may find it more difficult to prove regular income. We work with specialist providers who understand the healthcare sector.
Dentistry is seen as a low risk sector by almost all banks and finance providers. Set out below are the usual options BUT which is right for you will depend on your specific circumstances. Bear in mind there is far more to look at than the headline interest rate. See some examples in our 'Things to Consider' section
The purchase of a dental practice normally involved buying the 'goodwill' from the current owner. Goodwill is an 'intangible' asset as far as a bank is concerned and is considered differently to 'tangible' assets such as property which can more readily be used as security. When sourcing finance it is important to work with banks and providers who understand the value of dental goodwill. PrimaryCare Banking and Finance can help you find the right bank and right deal for you.
Many dental practices occupy rented premises but others own the freehold or leasehold title. If you want to buy the surgery property you need to consider whether to buy with a combined goodwill/property loan or two separate loans. Some banks will lend over a longer term for property and may offer better interest rates
Using finance to make your equipment purchase can help you manage your cashflow, as well as being able to reap the benefits of having the latest equipment in your practice. We will deal directly with your preferred supplier once your approval is in place and have very competitive fixed rates with terms up to 7 years.
By offering patient finance you should see an increase in the uptake of higher value treatment plans with the potential for patients to consider cosmetic treatments (dental or otherwise) & increase revenues.
Mortgage providers usually need evidence of consistent earnings via a regular salary. Dental owners are self-employed and therefore may find it more difficult to prove regular income. We work with specialist providers who understand the healthcare sector.
Pharmacy is still seen as a low risk sector by some but not now all banks and finance providers. Set out below are the usual options BUT which is right for you will depend on your specific circumstances. Bear in mind there is far more to look at than the headline interest rate. See some examples in our 'Things to Consider' section
The first purchase of pharmacy normally involved buying the 'goodwill' from the current owner, stock and possibly the premises. Goodwill is an 'intangible' asset as far as a bank is concerned and is considered differently to 'tangible' assets such as property which can more readily be used as security. When sourcing finance it is important to work with banks and providers that understand the value of pharmacy. PrimaryCare Finance can help you find the right provider and the right deal for you.
Many dental pharmacies occupy rented premises but others own the freehold or leasehold title. If you want to buy the property you need to consider whether to buy with a combined goodwill/property loan or two separate loans. Some banks will lend over a longer term for property and may offer better interest rates
Pharmacy generally has a very predictable cashflow with the major costs being drug supplies and the majority of income received monthly via FP34/PPD submission data. Cashflow finance services can bridge the gap between you paying for stock and the reimbursements and is usually up-to a percentage e.g. 90%. Not all providers are the same - let PrimaryCare Finance help you compare what's on offer.
With some banks being less attracted to pharmacy, and others only 'committing' lending for a few years, you may need to refinance loans every few years. The provider that offered the best rate when you initially took out your loan may not now be the best choice. We can support you in finding the best deals today and help you decide which is right for you.
Mortgage providers usually need evidence of consistent earnings via a regular salary. Pharmacy owners are self-employed and therefore may find it more difficult to prove regular income. We work with specialist providers who understand the healthcare sector.
This is the headline figure many people use as the main comparison. Is the rate fixed, base rate linked of something else? Does the rate quoted cover the entire loan or only the 'secured' part? How long does the rate apply and can it change?
Some banks only 'commit' the funding for a number of years less than the loan! An example is a 15 year loan with a 5 year commitment. This can result in the need to re-finance after 5 years which may involve higher rates, additional valuations and fees.
Typically banks will need a professional valuation by one of their 'panel' for the practice and/or property when the loan is taken out. Some banks however want new valuations every few years which can add significant ongoing costs.
Fixed rates can be helpful for budgeting as they remove the potential of the increase in repayments is base rates rise. However, depending on your plans do you want them to apply to the entire loan of just for the first few years. Also what breakage fees apply if you want to clear the loan before the agreed term?
Fixed rate loans often have 'break-fees' attached if repaid early. There are also different types of break-fee with different calculations. It is important to consider any potential fees before the loan is taken out. NB: some banks are now applying break fees to base rate linked loans.
The 5 issues above are probably the most common considerations but there are others. We gather comprehensive quotes from all appropriate providers and set them out in a simple table so that you can compare fully. We will also help you consider each aspect and how it impacts you specific plans.
PrimaryCare Finance Consultancy Ltd was established by Ian Crompton to provide independent support to primary care businesses looking for finance.
Ian worked for Lloyds Bank for 43 years with the last 15 dedicated to the HealthCare sector. He established what became an award winning team; winning the GP Awards 'Financial Advisers of the Year' for six consecutive years. Ian also personally won the 'Most Influential Banker in HealthCare' award from Health Investor.
Ian' aim has always been to understand the sector and then what you, the clinicians, and your practices need. The primary objective is to support you with the banking and finance side of your business leaving you to get on with delivering great care and service to your patients.
Through his time at Lloyds Ian built a significant network of support professionals, e.g. specialist accountants, lawyers and valuers. From attending numerous conferences and seminars he also built up a wealth of knowledge and experience. With his knowledge of banking and finance this gives Ian the ability to support you with finding the right finance package and if appropriate introduce you to other specialists and help you put in place the right business structure and agreements
Ian has supported many practices and businesses over the last 15 years including some of the biggest GP mergers seen to-date, finance and refinance of surgeries and partner buy-ins. He has also supported dental and pharmacy first-time buys and group growth and refinancing.
Previously 'tied' to Lloyds Bank, Ian is now independent and can find the best deal from across all providers. The really good part is that as an independent broker the banks and finance providers pay introducer fees so there is no additional cost to you AND you get the benefit of an experienced specialist support.
PrimaryCare Finance Consultancy Ltd can also provide 'day-rate' consultancy for advice and support with primary care finance issues in which cases any fees is always agreed in advance.
Ian Crompton ACIB, Founder and Director, was Head of HealthCare at Lloyds Banking Group for 15 years
10 Considerations when looking for a Premsies Loan
Owning surgery premises may have benefits but finding the right finance can be time-consuming and daunting. Here we look at some things to consider.
One issue which comes around all too often for GP Partnerships that own their property, is that of sorting out premises finance. New or re-finance is usually required when there is a partner changes, or now more than ever, on loans maturities where the existing lender does not want to lend again.
Premises finance is usually not the top priority and is sometimes left until the last minute. Time is always short, and it is tempting to take the first solution offered with the view that it will ‘do the job’ and anyway all banks are as bad as one another! However, it pays to plan and will be better in the long run if you take time to find the right package for your practice rather than a quick fix. Consideration should be given to:
If you are faced with a loan maturity or partners changes and need to find the right loan package here are ten things to consider:
Be clear who is borrowing the money.
Should the borrowing be in the name of individual partners, the partnership or even a limited company? How the loan is set up will affect the cost but may also impact the ease of borrowing in the future if partners changes etc. Also consider any connected issues e.g. partners changes will mean you need to update your partnership agreement or there may be the need for a lease; are there any tax implications?
Don't assume your bank will give you the best deal.
A common assumption is that your current bank will provide the best deal. They might; but often the best rates are used to attract new custom or ’switchers’. As with some insurance and utility contracts, banks can take advantage of your loyalty. Also make sure the person you talk to at the bank understands GP Premises Finance and that the bank has specific credit and pricing policies which reflect the sectors ‘low risk’.
Decide whether to minimize repayments or minimize outstanding debt.
Some GPs want to pay the minimum they can each month so they can take any ongoing ‘profit’ along the way, with less equity when they leave. Others may want to pay off their loan as soon as possible and take any benefit at the end as a lump sum. The right loan may allow some partners to do it one way and some the other.
Don’t get fooled by headline rates.
Most people look at the proposed interest rate as the main comparison between providers. You should question whether the rate covers the entire loan or just any ’secured' element; can it change for any reason after say 3 years; is it fixed or variable? As with many things what appears to be the cheapest may not be the best value or the best deal for you.
Compare offers like-with-like
There are different ways banks ‘commit’ funds, and this will impact the rate offered. Some will commit for the full term of say 25 years; others want to review every 5 years. In general, the shorter the commitment the lower the interest rate but subsequent renewals may see the rate rise and additional fees incurred. When comparing rates make sure you compare offers with the same terms and commitment.
If it’s complicated go step-by-step
Existing arrangements can be complicated with historic partner loans, some with fixed rates and penalties, others at very cheap rates, and all with different maturity dates. Refinancing every loan and every partner at the same time may not be possible. Decide how the ideal structure would look and then work towards it in stages if necessary. Make sure the bank works with you to provide what is best for the practice.
Future-proof the loan
Try and make sure the loan has sufficient flexibility to allow for future partners changes, retirements etc. Consider what might happen; is there the possibility of a merger or surgery development? Do not commit to fixed rates if the contract may have to be ‘broken’ incurring large penalties. Also build in some flexibility to enable lump sum capital reductions or potentially increase the borrowing if circumstances change.
Don’t over commit.
A major consideration should be the monthly loan repayment commitment. What may be comfortable now may not be in a couple of years and remember if interest rates rise your repayments will increase. For this reason, do not over-commit and if appropriate go for a slightly longer loan term e.g. 25 years instead of 20, with the option to repay early without penalty.
It doesn’t have to be either-or.
You will probably be asked to decide between fixed rates or base rate linked; 20 or 25-years term, full repayment or interest only (if available). With the right provider however, it need not be ‘all or nothing’; as an example, you may be able to have part fixed, part variable and possibly some interest only. Decide what is best for you and get in built into your loan
Understand all the ’small-print’
All contracts and agreements tend to have more 'terms and conditions’ than the headline features. Make sure you understand anything which may impact your plans or mean additional fees. As examples, are personal guarantees required, are there restrictions on early repayments or the need for regular re-valuations at your expense?
At the start of this article it was suggested the choices around practice loans can be daunting: the 10 items above probably reinforce that view! This leads to the final suggestion: use an experienced, independent specialist broker to help you build the best loan package for you. Make sure they understand GP premises finance, work with specialist accountants and lawyers, and the specialist teams in the provider banks.
Finally, the good news is that if you work with the right broker, there should be no cost for their support as the bank will pay them an ‘introducer fee’ which is not passed on to you. It may sound too good to be true, but you really can get a lot of specialist support fee free.
Ian Crompton ACIB
Mobile: 07802 750707
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