Sheel Capital was engaged by a Chiropractor that is running his own private practice and a health centre in an inner city suburb of Melbourne. The health centre - freehold currently owned by the director - had four rooms that were occupied by a chiropractor, general practitioner, psychologist and a dietician. The business had a great reputation in the area for providing excellent care, and all health practitioners had their diaries pre-booked for weeks in advance, which meant the revenue in the business was not a concern. The chiropractor/director started the business alone 12 years ago, and scaled the business with the depth of relationships he was able to create in the industry.
The client initiated the meeting to discuss the growth of the business by adding extra rooms to the health centre using the space behind the clinic and expanding the building to add eight rooms and a Yoga/Pilates theatre on the first level. Each room was to be equipped with state of the art technology for health practitioners from various backgrounds to hire the space and conduct their practice efficiently.
The client mentioned that the highest priority for him was to seek finance for the expansion, whilst refinancing all of his residential owner-occupied and investment property portfolio with better interest rates, repayment and loan terms.
Sheel Capital conducted an in-depth review of the client’s current business financials, building contract, and their way of managing the health centre. We also noted the current loan arrangements and asked relevant questions to the clients summarising what the client wanted in their new finance arrangement. We discovered that the client was paying a higher interest rate to what they could have from lenders in the industry.
The loan terms hadn’t been reviewed since they were set up and their finance strategy did not match the taxation strategy.
Sheel requested the accountant to prepare cash flow projections, taking into account the revenue that would be generated by the additional rooms. A fixed price building contract for the new build was also requested. Two serviceability scenarios were presented to the lender on the basis of the current and projected financials.
The credit submission noted the projections would be true at the fruition of the project, based on the pattern of revenue generation from the current room rental. It was made clear that the business funding was completely separate to the residential property funding and how each funding type serviced itself with the business and individual income.
We further noted the experience of the builders in constructing similar builds to ensure the quality of the build was in line with the policy of the lender.
Our client received approval for funding the expansion of the health centre. We also connected the client with a specialised Health Care division of the bank to ensure they receive priority service for their future banking needs.
Sheel obtained competitive interest rates on all of their client's investment properties based on the volume of business with the lender. Due to the revised terms and lower interest rates, the client was able to save thousands in repayments every year. These savings were then utilised for the working capital in the business post the expansion.
Help a highly reputed Health Centre provide quality service to those who need it the most, every day!
