Finance Market Overview - October 2020
We hope that you and your teams are well, we send our very best wishes.
We would like to provide you with an overview of the current lending market, which is very positive with regards to bank funding, helping make your dreams a reality. Banks are keen to assist customers within the healthcare sector during this extraordinary time, utilising government backed schemes to assist with cashflow including making finance available for the purchase of a dental practice.
With that in mind, the banks funding appetite is still fully present as practice purchases continue to take place. The banks have altered their policy on loan-to-values (LTV) ratio and have been requesting deposits of around 20% - 25%. Some banks on the MediHoldings panel will consider going up to 90% LTV on the goodwill element and 100% LTV on the freehold, should the purchase meet their requirements.
The lending rates received are generally around 2.8%-3% above base. A number of the banks on our panel, have a strong affinity for healthcare lending, and are eager to lend to dental practice owner looking to refinance an existing practice finance loan. They are offering rates as low as 1.5% above base and so this could be a great opportunity to review your current arrangement, freeing up cash flow within your business. The additional funds could be used to assist with a purchase of another dental practice.
An example below, shows a group of three practices, reducing their rate from 4% to 3%. Saving over a five year period is £129,000.
Banks are assessing each lending request on its own merits and we have the expertise to create a portfolio for you that will allow a full positive assessment. At Henry Schein Financial Services/ MediHoldings we are dedicated to supporting you throughout your practice purchase or financing journey. We will ensure that you receive the very best, tailored service enhancing your personal experience. There is no obligation to move forward with a deal that we source for you and with the interest rates being at an all-time low, we can source the most competitive deals for you.
This is a perfect opportunity to review your current financing situation and maximise the use of the fund saved through refinancing.