Banking and Finance Questions answered by NatWest Healthcare Experts
A further set of questions from dentists are answered by Ian Hardcastle, Head of UK Healthcare Banking for NatWest Bank.
Based in Manchester, Ian is in contact daily with healthcare professionals, and with his team of specialist and knowledgable colleagues, who between them cover the whole of the UK.
Question
I am unsure as to how I should cover the costs involved with ensuring my Practice fully complies with HTM 01-05 regulations. Should I arrange a lease for specialist equipment I need or would a conventional Bank loan be a more viable option ??
Answer:
Both options are perfectly viable ways of acquiring the specialist equipment you need and the best option will very much depend on your financial circumstances.
There are tax benefits with leasing which enable 100% of lease repayments to be written off against profits. With a conventional loan it is the interest payable and capital allowances that are tax deductible.
With loans however you are in essence a cash buyer and could potentially negotiate a lower purchase price.
The banks who truly understand the Dental profession are aware of the potential effects of HTM 01-05 on practices and will be willing to discuss both lease and conventional loan options which are available at competitive and flexible terms.
As ever, I would suggest you speak with your bank manager or accountant to cover the option which will best suit your own financial position.
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Question:
With the ongoing so called 'Credit Crunch' and what seems like ever increasing Goodwill values what chance is there for an Associate Dentist like me being able to raise funding to purchase a Practice ??
Answer:
It is true to say that we are in a very different world now financially compared with a few years back. That said most High Street Banks - especially those with a specialism in the Dental Market - remain very much open for business and are looking to assist in the majority of cases.
Funding is still available for purchase of Practice Goodwill, Fixtures/Fittings and Equipment.
As always, each applicant is considered on a case-by-case basis on his/her own merits with specific focus on the background and strength of the individual (CV is key in most cases), serviceability of loan facility (i.e can borrowing be comfortably repaid with sufficient left over for living costs/tax etc) and level of borrowing (secured/unsecured).
My suggestion would be that you speak with your local Healthcare Relationship Manager (you can contact your local Branch for contact details) to discuss your specific circumstances and they can talk you through your options and provide you with an idea as to level of funding which could be obtained which in turn should help you in your negotiations for future Practice purchase.
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