This article is a continuation of our series in regards to methods of financing for different segments of economy, professionals, businesses etc.
Many doctors recent graduates from med schools have substantial difficulties finding proper financing sources for their new practices. Medical equipment is expansive, and financing sources for purchase of such equipment are not readily available. Lease hold improvements, operating capital requirements, office equipment purchases and new employees hiring is also expensive. All of the above financing requests are not covered by the same financing products or small business loans for medical offices offered by institutions in Ontario. Therefore properly qualified financial advisor is required in order to structure the request.
Practicing doctors very often also looking to expand. Open new office for a new practice. Purchase new equipment, diagnostic equipment or office furniture etc. WeCanFinancial.ca has a great experience in financing new doctors and existing doctors and we will discuss some of the potential ways how this financing is achieved. Most of such financing is obtained through a combination of a small business loan, operating line, inventory funding.
Normally as in any other business loan transaction, we begin with properly prepared business plan, financial plan, use of proceeds and 2 year projections. Doctor that requires financing requires to provide us with a license, credit report and personal networth form. Ultimately Doctor’s license and quality of the analytical work that our associates prepare, dictate the quality of the response from potential lenders, amount of financing and also terms of such financing.
Doctor’s equipment is very expensive. Normally use of proceeds for business loan has to properly identify where the money is going, and what is the major reason for the expense. Medical equipment often could be leased, which could be a much smaller up front expense vs. the outright purchase. Now, medical equipment suppliers very often have a specialized list of equipment that could not be leased, due to liabilities, and many other reasons. Therefore when WeCanFinancial.ca prepares business plan, use of proceeds is very thoroughly analyzed and “optimized” in order to fit in the most appropriate manner into a financing product that client is being qualified for. Small business loan products offered by most institutions have a limit of $350k per deal, and up to 80% of the funds could be spent on equipment. In medical field $300k does not purchase much, therefore very often other forms of financing are required. WeCanFinancial have access to many different products that could cover up to several million in equipment funding per deal, per doctor.
Leasehold improvements are also not cheap. Contractors have approximate idea on how much the costs will be up front. Normally such costs are calculated on square foot basis, say $60-$80 per sq. ft is a good estimate for newly renovated medical office set up. Doctors-entrepreneurs need to properly plan out the budget for lease hold improvements, therefore our associates normally require 2 independent quotes for jobs required from good/verified contractors. Small business loan products normally cover up to 60% out of $250-$350k offered by institutions, for the purpose of construction and lease hold improvements. If substantial equipment financing is requested simultaneously, WeCanFinancial prepares a combination of several loans, in order to allow for the maximum leverage that Doctor requires to open the practice.
When established Doctor is expanding their practice, existing established cash flow of the existing practice is a very serious argument for substantial new financing program for new location. Strong cash flow and existing balance sheet, could be leveraged in a very efficient manner by experienced consultant such as WeCanFinancial.ca and out associates. Financial projections and use of proceeds could be based on previous history of the Doctor/client, or based on similar clients that our firm helped in expansion over many years in service. Doctor who is looking for expansion and development money could enjoy several other financial products, based on line of credit principle, thanks to existing cash flow. More importantly when WeCanFinancial.ca and our associates run the qualification process, any Doctor should be 100% confident that they are with the best in business.
We will continue updating our clients on different products and structures in small business loans for medical offices and Doctors in Ontario,
Happy Financing everyone!