Look For Financing? Find Your niche.

Do you hear opportunity knocking at your office door? If you are a healthcare professional in the market to purchase or build a practice, the loan application process should begin long before you fill out any paperwork. Number one on your to-do list—find a lender that understands your unique financing needs.

It’s time to consult a specialist.

Your loan approval process should begin with an interview—YOU interviewing lenders to find the right match for you. The best match could very well be one of the large conventional lenders. Or, it could be a “niche” lender that specializes in financing healthcare projects.

When you need surgery, you want the best surgeon available to you. While there may be plenty of qualified surgeons who can perform the necessary procedure, their experience and the skill born of that experience can vary widely. Before making your selection, you want to know how many times and how often they have performed this procedure. Likewise, there are plenty of lenders who can finance your medical practice. However, if you scratch the surface by asking how frequently they handle projects like yours, you will probably find that their experience falls short. Most lenders provide small business loans, along with other financial products and services, across all industries, never fully-understanding the needs and potential complications that come with lending to physicians. By finding a bank that understands your industry, you will likely encounter fewer roadblocks throughout the loan process.

You may find more suitable loan terms as well. Rob McCarville, Principal of Medical Consulting Group, LLC, is refinancing an ambulatory surgery center (ASC) with an SBA loan through a niche lender. “Some lenders don’t want to handle anything smaller than $3 million, but many ASCs need smaller loans, so I contacted Live Oak Bank. I don’t typically consider SBA financing, but the longer loan term offered by Live Oak Bank, in combination with the lower interest rate will give this center an additional $10,000 a month in cash flow.”

A niche lender is different…because you are different.

As when applying for a loan from a conventional lender, you will be required to provide financial information (state and federal tax returns, aged accounts receivable and accounts payable reports, cash flow statements, etc.), but your loan application needn’t be subjected to the same standards as an application from another type of business. The value of your assets, liquidity and cash flow may be less relevant when determining the financial health of a medical practice than they are in evaluating the credit-worthiness of a retail business.

Most financial institutions actively seek business from physicians because, statistically, physicians are timely on their monthly payments and are unlikely to default on their loans. Most conventional lenders simply run the financials to determine the loan amount they can provide to the borrower; however, a niche lender may be able to treat your individual situation more appropriately and equitably, even providing up to 100% financing on a real estate purchase or ground-up construction project. The difference doesn’t end there.

The loan process can be different too.

Does the mere mention of SBA financing cause you anxiety? If so, relax. If you place yourself in the specialized hands of a niche lender, it’s far more likely that you will have a satisfactory or even exceptional experience, much the same as Robb McCarville’s personal experience. “This has been an unbelievably smooth process absolutely seamless and remarkably positive. We recently received loan approval and our commitment letter, and expect closing to take place very soon. Communication has been excellent, and the loan officer routinely smoothed out snags that very well could have delayed or derailed another lender’s process. Here’s the bottom line—we’ll be working together again.”

“Smooth and seamless” begins with streamlined communication.

At Live Oak Bank, nimble loan officers and loan closing specialists respond promptly to phone calls, emails and an applicant’s concerns. Streamlined communication makes direct access with loan team members and real-time updates on loan status possible. Thanks to a state-of-the-art automated system, documents can be uploaded as completed, and checklists illustrate the progress of the loan process. Applicants generally receive a commitment letter within 5 to 8 business days and average time from application to closing is only 35 days.

McCarville’s take on niche lenders? “Everyone wants to loan to a winner, but the banking crisis has redefined what a ‘winner’ looks like. Conventional lenders even a local bank that you may have a relationship with are making borrowers jump through more hoops these days, and some of those hoops have little to nothing to do with medical practices. In my experience, a niche lender’s familiarity with the playing field, understanding of physicians’ concerns and the rules we must play by, willingness to consider sources of future revenue and knowledge of what it takes to win, make it possible to hit the ground running and avoid unnecessary delays. They know a winner when they see one.”

When seeking financing for your project, it pays to do your homework. Search for a niche lender who understands your business, helps you to avoid delays in the loan process and delivers a positive experience from origination to loan closing. Having a knowledgeable lender on your team who can shoulder much of the loan process will make it possible for you to devote more time to your preparations for ownership and focusing on doing what you do best practicing medicine.