There is a fairly substantial difference between financing a new piece of equipment and financing an entire healthcare business from the ground up.
SFE Loans has done both.
Healthcare businesses can be capital intensive, operationally complex and difficult to fit neatly into conventional lending models, particularly when the business is new, the ownership structure is unusual or the project combines property, fit-out, specialist equipment and working capital.
Yet healthcare businesses can also present strong lending propositions when the commercial case is properly understood and presented.
That distinction matters.
At SFE Loans, we work with healthcare professionals and business owners across practice acquisitions, expansions, commercial property, medical equipment, fit-outs and working capital. Our role is not simply to find a loan. It is to understand what you are building, work out how the different pieces should be funded and take that proposition to lenders capable of understanding it.
We know that approach works because we have already used it to help finance one of the more unusual healthcare projects you are likely to come across.
From an Idea to More Than $7 Million in Healthcare Development
When Maclean Radiology was being developed in northern NSW, it was hardly a straightforward finance application.
The business had no trading history because it was a start-up. Its founders were building an independent regional radiology service rather than acquiring an established clinic, and the project required substantial investment in specialist diagnostic equipment and a complete medical fit-out.
The founders also did not fit the conventional profile lenders were accustomed to seeing behind a radiology business.
None of that meant it was a bad business proposition. It meant the proposition had to be understood.
As NAB subsequently documented in its case study of the project, Maclean Radiology founders Haley Hodgson and Lindsay McLennan came to Sarah Eifermann at SFE Loans after experiencing months of funding setbacks.
SFE Loans worked through the project, tested the proposal with multiple lenders and ultimately escalated the opportunity through NAB, where the right combination of commercial banking, healthcare knowledge and credit expertise came together.
The result was a tailored finance solution covering more than $7 million in development, including MRI, CT, X-ray and ultrasound equipment and the medical fit-out.
NAB approved the application within two weeks of submission.
NAB has since published the Maclean Radiology project as a case study of how brokers, clients and specialist banking teams can work together to finance an unconventional healthcare business.
EXTERNAL LINK:
Read NAB’s full Maclean Radiology case study: “How Maclean Radiology helped its community”
https://business.nab.com.au/tag/commercial-broker/how-maclean-radiology-helped-its-community
Healthcare Finance Is Rarely Just One Loan
The Maclean Radiology project is an unusually large example, but the principle applies equally to a GP buying a practice, a dentist opening another location, an allied health provider fitting out larger premises or a specialist investing in new equipment.
The first question should not necessarily be, “What’s the interest rate?”
It should be, “What are we actually financing?”
A healthcare acquisition or expansion can involve goodwill, property, equipment, fit-out, technology, vehicles, professional costs and working capital. Those assets do different jobs within the business and can have very different useful lives.
Putting everything into one facility simply because it is convenient can leave a business with the wrong repayment profile, unnecessarily tie up property or other security, or consume borrowing capacity that would have been useful for the next stage of growth.
Equally, using cash for everything is not automatically conservative financial management. If paying cash for equipment leaves a growing practice short of working capital six months later, preserving the cash may have been the more conservative decision.
The structure needs to make sense for the business.
Buying an Existing Medical or Healthcare Practice
Acquiring an established practice creates another set of questions because the value of the transaction may sit across tangible assets and goodwill.
The lender needs to understand what is being purchased, historical financial performance, the sustainability of revenue after settlement, the experience of the incoming owners and how the debt will be serviced.
The buyer needs to think beyond settlement as well.
What happens to revenue when ownership changes? Are key clinicians remaining? Does equipment need replacing? Is additional recruitment required? How much working capital will remain after the acquisition? Is another site or service already part of the longer-term plan?
A finance structure that gets you through settlement but leaves the business without enough liquidity afterwards has only done half the job.
SFE Loans works with clients before and during an acquisition to understand the transaction, identify appropriate lenders and build the finance requirement around the business rather than treating the purchase price as the entire funding problem.
Expanding an Established Healthcare Business
Growth creates its own financing challenges.
Perhaps patient demand has outgrown the existing premises. You might be adding practitioners, opening another location, installing additional treatment rooms or investing in equipment that allows the practice to offer a new service.
That growth can require significant capital before the additional revenue arrives.
This is where understanding the relationship between equipment finance, commercial lending, property finance and working capital becomes particularly important.
An MRI machine and the building containing it are both essential to a radiology practice, for example, but they are very different assets from a finance perspective.
The same principle applies at a smaller scale to dental equipment, diagnostic technology, treatment equipment, practice fit-outs and vehicles.
Matching the finance to the asset and the expected cash flow of the business can preserve liquidity and borrowing capacity while allowing the business to invest in growth.
Commercial Property and Healthcare
For some established healthcare businesses, purchasing their premises also becomes part of the longer-term strategy.
Owning the property can provide greater control over a highly specialised fit-out and remove some of the uncertainty associated with leasing premises that may be expensive or difficult to replicate.
It also adds another substantial financial commitment to the business or ownership group.
The property purchase therefore needs to be considered alongside existing business debt, future equipment requirements, working capital and whatever the owners intend to do next.
This is precisely where looking at the whole picture matters.
Why Use SFE Loans for Healthcare Finance?
Because healthcare finance is not just about finding someone prepared to lend you money.
It is about understanding the business well enough to know what needs to be financed, how it should be structured and which lenders are worth approaching.
With Maclean Radiology, the challenge was not simply finding more than $7 million. The project needed a lender prepared to understand an unusual ownership model, a start-up with no historical trading figures, substantial specialist equipment requirements and a business case built around an unmet regional healthcare need.
As NAB noted in its own case study, the detailed proposal, strong market data and clear business rationale were important in giving the bank confidence to support the project.
That work happens before an approval lands.
SFE Loans specialises in business, commercial and asset finance, and we work across the different funding requirements that can arise throughout the life of a healthcare business, including:
• medical, dental and allied health practice acquisitions
• new healthcare businesses and practice establishment
• expansion and additional locations
• commercial property purchases
• medical and diagnostic equipment
• fit-outs and renovations
• vehicles and other business assets
• working capital and cash-flow facilities
• refinancing and restructuring existing business debt.
We also know when a proposal needs more work before it goes anywhere near a lender.
Sometimes that means challenging assumptions, rebuilding forecasts, looking more closely at cash flow or changing the proposed finance structure. That is preferable to sending an application into the market before it is ready and hoping somebody says yes.
Planning an Acquisition or Expansion? Talk to Us Before You Commit.
If you are considering buying a healthcare practice, expanding an existing business, purchasing commercial premises or investing in significant medical equipment, the finance conversation is worth having early.
There may be considerably more funding options available than you realise, particularly when the transaction is properly structured and presented.
There may also be issues worth identifying before you sign a contract, commit your cash or order the equipment.
Maclean Radiology is a useful example of what can happen when a complex healthcare proposition is properly understood, properly structured and taken to the right people.
More than $7 million in development finance later, it is also a fairly good demonstration that SFE Loans knows its way around healthcare finance.
Talk to SFE Loans about financing your healthcare business, acquisition or expansion.
FAQ SECTION
Can I get finance to buy a medical or healthcare practice?
Yes. Finance may be available for the acquisition of established medical, dental, allied health and other healthcare businesses, subject to the lender’s eligibility and credit requirements. The appropriate structure will depend on factors including the purchase price, goodwill, equipment, historical financial performance, borrower experience, available security and working capital required after settlement.
Can SFE Loans arrange finance for a healthcare business acquisition?
Yes. SFE Loans works with business owners and healthcare professionals seeking finance for acquisitions, including the purchase of existing practices, equipment and, where relevant, commercial property. We assess the overall transaction and approach lenders suited to the business and proposed finance structure.
Can a new healthcare business get finance without an established trading history?
Potentially. A lack of historical trading figures does not automatically prevent a healthcare business from obtaining finance, although lender appetite and requirements will vary significantly. The strength of the business case, borrower experience, projected cash flow, market demand, security and proposed structure can all influence the lender’s assessment. Maclean Radiology was a start-up without an established trading history when SFE Loans assisted in securing its finance package.
Can medical equipment be financed separately from the business loan?
Yes. Medical and diagnostic equipment can often be financed separately from property, working capital or other business borrowing. Depending on the transaction, separating equipment finance may help match the loan term to the useful life of the asset and preserve cash or other borrowing capacity.
Can SFE Loans finance a medical practice fit-out?
SFE Loans can arrange finance for eligible healthcare and medical practice fit-outs, subject to lender approval. Fit-out finance may form part of a broader expansion, property or business finance structure depending on the project.
Can SFE Loans arrange finance for healthcare commercial property?
Yes. SFE Loans provides commercial property finance services, including for healthcare businesses seeking to acquire premises. The appropriate lending structure depends on the property, borrower, business cash flow, security position and overall transaction.
What types of healthcare businesses can SFE Loans assist?
SFE Loans can assist a broad range of healthcare businesses, including medical practices, specialist practices, radiology and diagnostic businesses, dental practices, allied health providers and other eligible health businesses. Lender appetite and available finance structures vary according to the profession and transaction.
When should I speak to a finance broker about buying or expanding a healthcare business?
Ideally, before committing to the transaction. Early finance planning provides time to assess borrowing capacity, likely lender requirements, cash contribution, working capital and the appropriate structure before contractual deadlines begin to dictate the process.
