For doctors in Australia, selecting the right place to set up your practice isn’t just important – it can define the success of your entire career.
On top of this, you need to be aware of the financial considerations and careful planning that comes with owning your own practice.
With the recent RBA rate cut, borrowing just got a little easier – great news if you're looking to buy your own practice premises.
Lower rates could mean lower repayments, making it a good time to explore your financing options. Understanding what’s available in this shifting market can help you make the right move for your practice.
Commercial property loans.
The most popular way to finance a practice premises is with a commercial property loan. These loans often come with lower interest rates than unsecured business loans because the property itself acts as security.
As a healthcare professional, you may be eligible for higher loan-to-value ratios (LVRs) than other borrowers. Depending on your financial structure, you could potentially secure:
- Up to 90% of the property value through a Self-Managed Super Fund (SMSF).
- Up to 100% of the property value through companies, trusts, or personal names.
Given the recent RBA rate cut, lenders may offer more competitive terms, making now a perfect time to explore commercial property finance.
SMSF loans.
If you have a Self-Managed Super Fund, using an SMSF loan to buy commercial property can be a tax-effective strategy. You can get your practice premises up-and-running within your superannuation structure, while benefiting from lower capital gains tax rates and tax-deductible interest payments. It’s a win-win!
As a doctor, you may have access to an LVR of up to 90% through SMSF lending! This is much higher than standard SMSF property loans, which typically require larger deposits.
However, these high-LVR SMSF loans are only available from a limited number of lenders, meaning expert guidance here is more important than ever.
Equipment and fit-out financing.
So, you’ve purchased your state-of-the-art practice. What about your medical equipment and clinic fit-out?
This can be a big investment. Fortunately, equipment and fit-out financing solutions can help spread these costs while preserving cash flow.
- Equipment finance covers essential items such as diagnostic machines, surgical tools, computers, and office furniture.
- Fit-out finance assists with expenses related to making your practice fully operational, including interior modifications, cabinetry, lighting, and technology integration.
These financing options are often structured with flexible repayment terms and competitive interest rates, making them a key consideration when planning your practice setup.
Making the right choice.
With the RBA’s recent decision to lower interest rates, now could be a strategic time to secure financing for your practice. However, choosing the right structure depends on many factors, including your financial position, long-term objectives, and risk tolerance.
At Cutcher & Neale, we specialise in helping healthcare professionals like you navigate the complexities of practice financing.
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Dean is the head of the Residential & Commercial Finance division at Cutcher & Neale. With over a decade of experience previously working within the private banking industry, he enables the firm to provide independent, dedicated and personal finance solutions to clients.
Dean specialises in finance solutions such as home loans, investment loans, refinance, commercial loans and bespoke lending for certain professions.
