There are reports that because of the Patient Protection and Affordable Care Act, around 32 million more Americans will receive health insurance, and this will certainly increase the demand for new or larger medical establishments. Besides that, the demand for medical services has only grown in the recent past, and is expected to continue to grow in the time to come. Medical, dental and health care industries have always been a stable industry and if you, as a doctor, an investor, or an institution, are thinking about finding medical building financing or medical office financing, you could very well be on the right track.
The ‘Medical’ Benefit:
The medical field has largely been viewed as a relative safe sector by the lending sector (both commercial and private). And even though the recent slump has put the brakes on indiscriminate lending, you can still find willing lenders when it comes to looking for medical building loan, medical office loan, dentist office loan, etc. After all, around 60 million Sq. Ft of space was added for medical services in between 2000 to 2007.
Medical Facility Specific Checklist:
Before you decide on any one building/office, understand that these facilities generally come with distinct structural, economic, and access criteria, and this is something you must address. This makes it important that your lender feels comfortable with your choice. Factors that you need to look into in this regard include:
· Going through the dimensions; as medical office buildings generally require shallow cubicles, and opting for a building with large cubicles would result in a waste of space.
· Studying the property’s HVAC system. This is because medical facilities generally have small rooms, and since different temperature settings are required in different areas, the HVAC system could buckle under unusual demands.
· Having sufficient parking space (an average of 5-6 spaces for every thousand square feet).
· Going through the costs that you would have to bear in terms of wages, equipment, insurance, taxes, etc.
Once you’ve established how much you need the medical building financing or dental office loan for, you go through the loan options. The loan amount would dictate whether you look for a small balance or a large balance medical/dentist loan. In either case, you would have to put down around 10% or more of the amount as down payment, and in either case you have the option to choose between fixed rate and variable rates when it comes to the interest.
When you apply for the loan, be prepared for your credit and your tax returns and financials to be scrutinized. Expect being asked about what you have in terms of bonds, stocks, savings, etc. The property that you have chosen would also be analyzed and this analysis would include looking into the local market conditions, the income and expense of the building, the location, the age & appearance of the facility, etc. These conditions remain the same for both dental and medical loan financing.