Practices are good businesses with awkward timing
A medical or dental practice usually has loyal patients and reliable income. The pressure comes from the size and timing of the costs. A new dental chair, an OPG or CBCT scanner, sterilisation equipment, a treatment room fit-out or a new practice management system can each cost a lot of money in one hit. Moving premises or opening a second location means a full fit-out, often months before the new rooms are earning.
Income has its own lags. Medicare rebates and health fund claims arrive on their own cycles. Specialists may wait on hospital or third-party payers. Practitioners on service agreements are paid out regularly, so the practice owner carries the gap. And the biggest moments in a practice's life, a buy-in, a buy-out or a partner retiring, rarely line up with a bank's appetite or timetable.
Where practices get squeezed
- Fit-outs for new or relocated rooms before patients arrive
- Major equipment purchases and replacements
- Buying into a practice, or buying out a retiring partner
- Settlement deadlines when buying an existing practice
- ATO debt, including payroll tax and GST reviews
- Waiting on the sale of a practice or the practice premises
Practice scenarios
| Practice type | Scenario | Exit |
|---|---|---|
| Dental clinic | Needs new imaging equipment and two chairs while waiting on equipment finance | Equipment finance or refinance |
| GP practice | Relocating to bigger rooms, fit-out needed before the move | Refinance once the new rooms are trading |
| Specialist | Buying out a retiring partner on a fixed date | Refinance to a bank |
| Physio or allied health group | Buying a second clinic with a short settlement | Refinance or sale of an investment property |
| Dental group | Owner selling the practice, payroll tax and ATO debt to clear first | Proceeds from the practice sale |
| Medical centre owner | Selling the practice premises, settlement months away | Settlement of the property sale |
These scenarios are examples only, not claimed results.
Why practices are frustrated by the usual lenders
Practitioners are often told they're a preferred customer at the bank, right up until the deal is a little unusual. A buy-out with a tight date, a practice with an ATO payroll tax issue, or a borrower with a recent separation or a past default can turn a simple application into months of back and forth. A bank refinance commonly takes up to three months or more, and you may not be approved for the amount you need.
Equipment financiers lend on the equipment, but not on fit-outs, goodwill, buy-outs or tax. Cash flow lenders are rarely suited to the amounts involved and their frequent repayments don't fit a practice that wants to invest in growth.
How Equity Tap lends to practice owners
We lend $50k to $5m for one to twelve months, secured by a first or second mortgage or caveat over residential or commercial property anywhere in Australia. If you own your home, an investment property or the practice premises, any of these can be the security.
We don't need your tax returns, BAS, profit and loss, an accountant's letter or bank statements, and we don't order a valuation before approval. Your consulting list doesn't need to be cancelled to meet a valuer, and your accountant doesn't need to prepare anything before you get an answer.
Interest for up to the first six months can be prepaid or added to the loan, so there are no scheduled payments while the new rooms are set up or the practice sale settles. Interest is not waived, and the full cost is shown to you before you proceed. We take the time to make sure you understand the loan, the costs and the exit before anything is signed.
Exits that suit practices
- Refinance to a bank once the move, buy-in or buy-out is complete (see refinance bridging loans)
- Equipment finance put in place after the purchase
- Sale of the practice or of the premises
- Practice cash flow over the term
- Sale of an investment property
From first call to settlement
- Call us or have your broker send the scenario.
- Tell us the property, existing mortgage, purpose and exit.
- Conditional approval can often be given on the call, with a term sheet in about 30 minutes once we have the scenario.
- We confirm ID, title and mortgage details, and documents are issued.
- Eligible loans can settle in as little as 24 hours.
Broker note
Practice finance is usually bank territory, which is exactly why the awkward ones end up with a broker under time pressure. If your practitioner client has a buy-out date, an ATO issue or a fit-out that can't wait for credit, send it through the broker page for a fast indicative answer.
Also see professional services and business bridging loans. Apply online or call 1300 123 024.
Business-purpose lending only. Approval, timing and terms depend on the scenario.
Frequently asked questions
Can I borrow to buy out my practice partner?
Can the loan fund a dental fit-out?
Do I need my accountant to prepare financials?
Can I use the practice premises as security?
I have a payroll tax debt. Can you still lend?
Will I need to meet a valuer?
How long can I borrow for?
Brokers: send the scenario through the Equity Tap broker channel and you will deal with the same lending team.