Is financing the sale of mental health practice seem challenging? While it is not easy, you can follow these simple steps to improve your chances of getting the loan you need.
- Educate yourself on what is involved in financing, just like any other type of real estate transaction. If possible, attend a seminar about how to finance this purchase and, if available, sit down with an experienced broker or accountant who has financed these types of transactions before. This will give you a good understanding of what is involved in financing this type of transaction.
- Talk to your bank about the possibility of financing the sale of mental health practices. While it is not always easy, if you have an established banking relationship with a lender that understands the business and has worked before with existing mental health professionals, there is a better chance that you’ll get a loan.
- Get recommendations from other mental health professionals who have financed the sale of their practice and ask for advice on what to do during this process. Word of mouth is probably one of your best tools when looking for financing, as your previous clients can provide first-hand experience with lenders throughout the entire process. Your attorney and accountant can also be able to provide you with references who have financed transactions like this in the past.
- Prepare your financial package like you would for any other type of real estate loan request. The income statement, balance sheet, years in practice, and all personal information should be accurate because it will show the lender that you are serious about buying this business and completing the transaction successfully.
- If possible, try to get a letter from the owner telling the lender the type of buyer the company is looking for. This will give you a better chance at getting approved, as many lenders want to see that business owners are actively pursuing new professionals who can grow and take over their practice without any problems after closing.
- Be ready to provide documentation such as tax returns, bank statements, cash flow projections, and all other financial information that you will need to secure a loan. You can’t expect the lender to provide you with financing if you don’t provide them with the documentation they need as proof of your stability and ability to pay back the loan on time each month.
- If possible, try going through a broker or find an accountant who has experience in financing mental health practice sales. A qualified broker or accountant can help you work through the process and get all of your questions answered, so you’re never left in the dark when trying to figure out the next steps throughout this transaction.
If you’ve followed these simple steps, then there is a better chance that financing can be found for your purchase of mental health practice. However, like any other type of loan request, it is impossible to get one without proper planning and execution.
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