Currently under LOI with medical practice

by a searcher from University of North Texas

2 years ago

Currently I'm under a LOI for a medical practice and courting one of the doctors to remain for licenses purpose.
Question- What other criteria is needed to satisfy either SBA or private lending? (This is in TX and is a 60/40 deal)
Also, who are the best motivated financial intuitions that deal in this vertical?

Thanks

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investor from University of Nebraska - Lincoln

The deal you are referencing probably wouldn't work because the owner wishes to remain an equity holder. Work with a non-SBA product/lender if you need the seller retain equity.

On the MSO topic...I bought a dental group (DSO...same as an MSO in the dental space) utilizing an SBA loan. It's definitely possible, you just have to find the right lender who understands or has invested in the space before or is familiar with the MSO structure. It is an uphill uphill battle though.

2 years ago | like reply | 0 likes

lender from Eastern Illinois University

I agree this is likely to be a challenging deal to get done from an SBA perspective. I have done these situations using an SBA loan where the buyer has a new doctor coming into the transaction with the MSO, but never where an existing doctor is staying. One of the requirements of the SBA is that you cannot guarantee an existing employee stay on for more than a year. Since you need a committed doctor for licensing, I don't think you can use one of the sellers under an SBA scenario. Sorry if this is not the news you wanted to hear.

There are a lot of lenders that provide medical practice financing, however, most of them require a medical professional to be one of if not the primary borrower. It seems you have a good equity scenario, so there may be a path to make something work on a conventional basis. Happy to discuss further at anytime. I can be reached at --@----.com

2 years ago | like reply | 0 likes

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