Medical Centre Development

Our team of healthcare specialists have, over many years, put together finance packages for medical centre development.

Our team of healthcare specialists have, over many years, put together finance packages for doctors to:-

  • Build new Medical Centres with multi services including pharmacies, dental practices, opticians, private consulting rooms for visiting specialist hospital consultants rooms for PCT staff (no doubt will be used by PCT / CCG’s) nurses and so on. Interestingly and increasingly space also for café’s. Not only do these provide additional income but they can be a place of comfort for elderly patients who, instead of taking up a GP’s time can join patients groups and meet a practice nurse.
  • Build new stand alone practice premises or perhaps branch premises where additional services are provided at the main surgery.
  • Build new Medical Centres where one or more practices are coming together in a locality to enable them to provide additional and more cost effective services. We are currently advising on 5 practices with 20 doctors coming together and have been involved in other projects with more than 16 doctors.
  • Extension of current practices to provide additional space to accommodate growth and anticipated future growth in patient numbers. Some with additional services including pharmacy.
  • Upgrade of current surgery premises

Each project will have its own particular challenges and maybe the larger developments more than most. Not least because not all the Medical Centres will have the same requirements, financial or otherwise (some may be nearing retirement others just joining their first practice)

Our team have extensive experience in dealing with Medical Centres and helping both the partnership team and individual doctors find an acceptable solution for all parties.

We have experience in helping to put business cases together for the PCT’s and have of course put many business lending cases together for the lenders.

We have strong contacts with all the Medical Centre specialist lenders and understand their lending criteria. Our team understand what the lenders look for and what is particularly important to them.

All lenders have basic core requirements that must be met. However interpretation of the information is not always the same with each lender and it is important to understand this as it can be the difference between a loan being approved, referred or declined.

Sterling have been successful in brokering deals where the guaranteed rental income (e.g. notional and pharmacy rent) does not cover the capital and interest loan repayments.

Not all lenders are able to offer the same lending package. However, because of our specialist knowledge and understanding of both the Medical Centre sector and the Bank’s we are able to identify which lenders are best placed and most likely to be able to fund a particular project.

Examples of Medical Centre funding potential are:-

  • Loans up to 100% of the total cost of the new development including all fees and roll up interest
  • Capital repayment holidays of up to 7 years
  • Loan repayments of up to 30 years
  • Up to 50% of the loan could be interest only for the full term of the loan
  • Partnership. Property Company or Limited Liability Partnership loans
  • Base rate, 3 month libor linked variable rate loans
  • Fixed or hedging rates
  • Mix and match of loan terms and rates. Could be useful if / when notional and other rent increases and better able to fund capital loan repayments.
  • Loan repayments linked to any guaranteed RPI increases in rental income.


Medical Centre development Case Studies

  •  £6,500,000 loan approved and moving forward for a very large medical centre development - including pharmacy and other patient focused services - that brings 5 GP practices together in one location - under one roof. 100% funding that includes all fees and costs – set up on a 25 year loan that includes the development period - split capital and interest and interest only basis (interest only element can be for the full term of the loan or become capital and interest at any time at the doctors discretion). Loan to propco.
  • Multi million pound funding arranged for a group of doctors to purchase a Grade 2 listed former school and convert for use as the practice main surgery / medical centre including pharmacy and ancillary services. Required a leap of faith by the doctors and their bankers as funding for the purchase of the premises was arranged and taken prior to planning being in place. Bridging loan facilities were initially required – unusual for lenders to do this in what was at the time a very tight finance market even for GP’s. The market had moved by the time full planning was agreed and the development was to move forward and given Sterling’s understanding of the GP surgery financial market place we were able to lift the bridging loan and restructure the whole debt and development costs onto a new loan with a different lender - an initial mixture of capital and interest and interest only repayment - later all borrowing – 100% loan covering all costs - going on C&I over 25 years some of it on fixed rates to give the doctors comfort. Partnership loan.
  • Funding arranged to refinance current GP surgery borrowings to facilitate:-
    - Lower interest rate margins
    - Lower monthly repayment costs
    - Extend term of loan by taking out new 25 year loans
    - Allow senior colleagues to take out equity or plan for retirement
    - Allow incoming doctors to join a partnership loan without also having to take out additional personal buy in funding
    - Extension and redevelopment / upgrade of premises
    - All at 100% of total cost