Looking for the best interest rates and terms for your clinic purchase can be difficult to do on your own. That is why many clinic buyers (whom we sell clinics to) opt to work with a mortgage broker, the middleman of the business loan market.
Instead of approaching each lender or bank for a rate quote yourself, a mortgage broker does all the legwork for you. Brokers generally receive compensation from the lender you end up working with or from the fees you pay. If you decide to engage a particular mortgage broker, always be sure to request an itemised breakdown of all costs that you will incur as part of the loan to finance your clinic purchase.
The Business Mortgage Broker
The business mortgage broker is essentially a middleman that pairs business mortgage customers with lenders. Despite their involvement in this process, brokers do not work for lenders, and therefore do not originate business loans themselves.
At the very start of your relationship with a broker when you are looking to purchase a Physiotherapy, Chiropractic, Podiatry, Psychology, Speech Pathology, OT, GP or another type of healthcare practice your broker will assess your current financial situation. This could include an evaluation of your credit score, as well as a review of your income, expenses, and other important financial data. The broker does this not only so they can accurately assess the business loans that are best suited for you to buy the clinic you are after, but also so he or she can apply for a business loan on your behalf.
What to Ask When Deciding on a Mortgage Broker when You are Buying a Clinic
Before selecting a business mortgage broker to assist with the finance for purchasing your new practice, make sure they satisfy several parameters. There is of course the possibility that you don’t need to go through a broker at all & you can go directly to a bank for your finance requirements.
However, if you decide on (or need) a mortgage broker to sort through lender options and complete the majority of the work on your behalf when purchasing a clinic, it can be worth the cost. To assist with your decision, we at Healthcare Practice Sales have put together a list of questions that you should ask your mortgage broker when going through the process of buying your new clinic.
What are your fees?
Mortgage brokers earn money in several ways. Each broker you speak to may have a different set of circumstances. You will want to find out how your loan when purchasing a clinic is paid in order to determine if he or she has a bias toward a certain lender.
For example, if a lender pays your broker for each mortgage he or she brokers, that might be a red flag. You could be steered to a specific lender even if they may not be the ideal fit for you. Yes, it saves you from paying the broker yourself, but the flip side may be higher costs in the long-term.
What are my chances at qualifying for a mortgage?
Before you commence the clinic buying journey, you want to make sure the clinic you wish to purchase is within your budgetary constraints and that you can afford it. It is imperative to work with a broker who is honest. That means, if your finances are not in order, your broker should set realistic expectations as to whether you will qualify for the loan (to buy that clinic) or not.
Which lenders do you work with?
When you select a mortgage broker, be aware he or she may only work with a set list of lenders. To be thorough, ask your broker how big their pool is. Working with a broker makes sense if you are trying to get the best interest rate and terms across a wide range of lenders. But if your broker only works with a handful of lenders, it may be cheaper to do the rate shopping yourself for your clinic purchase.
Can I speak to a recent former client?
It is worth asking this question to see how the broker responds. If there’s hesitation or any sense that he or she is uncomfortable, then you know you probably should not do business with this broker to finance your clinic purchase. However, if the broker is happy to arrange for you to liaise with prior clients, you know he or she likely provides good service resulting in satisfied clients. It may also be worth asking if this broker has provided any loans specifically for other healthcare practitioners to facilitate clinic purchases. It would be ideal to speak to one of these clients directly.
Some questions you could ask a former client include – how well the broker communicated throughout the process, were documents attended to within any specific time frame requirements. Whether or not the fees charged were reasonable for service provided.
So, if you’re looking to buy a Physiotherapy, Chiropractic, Podiatry, Speech Pathology, Psychology, Occupational Therapy, Psychology, Osteopathy, multidisciplinary or GP clinic please get in touch with the team at Healthcare Practice Sales. We are the leaders in selling (& assisting buyers) allied healthcare & medical clinics and are more than happy to discuss how we can assist you with your clinic purchase & also any advice we can provide you regarding finance.