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Healthcare Finance for Dentists
Banks have always been comfortable in lending up to 80% of the goodwill and 100% of the freehold premises value. They will still, for the right person and the right business, look at applications for 100% LTV funding especially where there is a large NHS contract element and or very significant capitation scheme in place.
100% LTV funding becomes more comfortable for lenders and thereby more likely when a dentist is experienced and can show they can comfortably undertake the work required with or without associates so long as serviceability is strong
Types of Dentists:
- NHS (Contract issued by the CQC)
Generally up to 80% LTV for business and 100% for freehold premises. For the “right deal” we have seen higher percentage funding for business purchase (100% LTV) although over recent years this has been the exception.
General dentistry and specialist procedures like implants, extractions, cosmetics and orthodontics. Importantly lenders will want to know what proportion of fee income is from capitation eg denplan and what % of income is fee per item. This will generally drive appetite percentage LTV for business purchase. Up to 80% for business purchase and 100% for freehold property. Again for the right deal we have seen higher percentage for business purchase but this is the exception rather than the rule.
Depends on the mixture however lenders generally like to see more than 50% NHS contract together with more than 25% capitation. Or could be more than 50% capitation.
- Orthodontics and other specialists
Often a specialist practice on its own, but can be done by your own dentist if qualified. Generally 80% LTV for business and 100% freehold practice premises.
Lenders are unlikely to go as high as 80% LTV, often much lower, for business purchases but will usually consider up to 100% LTV for freehold premises
Whilst lenders appear to have a policy limit on the unsecured element we have seen very significant unsecured funding for the right target right business and right client.