Quantum Capital secures $6.4 million purchase loan for medical operation
Location: Alberta
Facilities: Purchase Loan, Operating Line
Total Amount: $6,400,000
Loan-to-Value: 82%
Lender: Bank lender
Project: Purchase of a medical facility, plus ongoing working capital
Primary goals achieved: Ownership of the facility, financing secured despite a short operating history
Our client, a growing medical practice, had the chance to buy the facility it operates from. Owning the building would give the practice control over its space, stop rent payments, and let it build equity in a long-term asset instead of paying a landlord.
The challenge was the company’s track record. The business had been operating for less than two years, and the bank was not prepared to help. Most lenders want to see several years of financial statements before committing to a loan of this size, and a short history is often treated as a reason to decline, however strong the business is.
We saw a different story in the numbers. The company had grown quickly since opening, and its patient volumes, revenue and projections pointed to a business that was gaining strength. Our underwriting package was built to show that path. It set out the company’s growth to date, the demand behind it, and realistic projections for the years ahead, so the lender could judge the business on where it was heading, not just on how long it had existed. It also showed how owning the facility would improve the company’s cost structure over time.
With the full picture in front of them, the bank was able to get comfortable with the opportunity. We negotiated a package with two facilities:
$5,400,000 Purchase Loan: The purchase loan finances the acquisition of the facility over a 10-year term, amortized over 10 years. Payments are made in fixed installments from the practice’s cash flow, and each payment builds the company’s equity in the property.
$1,000,000 Operating Line: A revolving operating line supports day-to-day operations, including payroll, supplies and receivables, as the practice continues to grow. The client draws only what it needs and pays interest only on what it uses.
The result is a $6.4 million financing package that let a young, fast-growing business buy its own facility. The client now owns its space, has working capital in place to support its next stage of growth, and has a banking relationship to support their future trajectory.