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Development finance – always a challenge as the whole development process can be a long process with many potential pitfalls not least planning permission and getting NHS England and CQC agreement to both the need for new medical centre and notional rent. Not unusual for doctors to be gifted land under section 106 and or get grants such as the former ETTF grants – in these cases notional rent is usually abated for a term. To make the deal viable pharmacies are encouraged to take space and pay rent to the doctors and rooms may be let out to local CQC and medical consultants or in the larger development a private hospital make take space. Funding considerations will primarily be notional and pharmacy rent plus any other long term guaranteed rent with a good covenant eg 10/15 year lease or longer
Refinance – an increasing number of lenders welcome applications for freehold premises funding. Notional rent is a particularly important figure when assessing GP surgery finance
Sterling’s healthcare funding division find funding solutions for your GP Surgery Development projects
You are in a specialist market so use a specialist broker who understands your sector. With access to major banks to specialist niche healthcare lenders, we know the types of deals that are synonymous with this sector.
Our team of healthcare specialists have, over many years, put together finance packages for GP’s / Doctors to:-
- Build new GP Surgeries where one or more practices are coming together in a locality to enable them to provide additional and more cost effective services.
- Extension of current practices to provide additional space to accommodate growth and anticipated future growth in patient numbers.
- Upgrade of current surgery premises
Each project will have its own particular challenges and maybe the larger developments more than most. Not least because not all the doctors will have the same requirements, financial or otherwise (some may be nearing retirement others just joining their first practice)
Examples of funding potential are:-
- Loans up to 100% of the total cost of the new development including all fees and roll up interest
- Capital repayment holidays of up to 7 years
- Loan repayments of up to 30 years
- Up to 50% of the loan could be interest only for the full term of the loan (this could be for full 25 years).
- Partnership. Property Company or Limited Liability Partnership loans
- Base rate, 3 month libor linked variable rate loans
- Mix and match of loan terms and rates. Could be useful if / when notional and other rent increases and better able to fund capital loan repayments.
- Loan repayments could be linked to any guaranteed RPI increases in rental income.
Our team have extensive experience in dealing with doctors and helping both the partnership team and individual doctors find an acceptable solution for all parties.
We have experience in helping to put business cases together for the PCT’s and have of course put many business lending cases together for the lenders.
We have strong contacts with all the GP specialist lenders and understand their lending criteria. Our team understand what the lenders look for and what is particularly important to them.
All lenders have basic core requirements that must be met. However interpretation of the information is not always the same with each lender and it is important to understand this as it can be the difference between a loan being approved, referred or declined.
Not all lenders are able to offer the same lending package. However, because of our specialist knowledge and understanding of both the GP sector and the Bank’s we are able to identify which lenders are best placed and most likely to be able to fund a particular project.