Getting a loan in today's market

With the current economy, getting a loan is tougher than it was a few years ago. But good businesses are still bankable. So what do you need to do to get a loan approved for major renovations in a leasehold or to build a brand-new hospital? The two most important factors are:

1. Will the practice have the cash flow to pay the rent or mortgage?

2. Do you and the practice possess good credit ratings?

Any lending institution will look at your other bank debt and the practice's profitability. Be prepared to hand your banker three years' worth of business and personal financial statements and tax returns. Because you'll likely require larger cash flow to support your new facility, prepare a three- to five-year financial projection that explains to your potential lender how you'll afford the project. Include a description of the project and a business history of the existing practice, if any, and the owners. Tell the lender what you're looking for in a loan—that is, your preferred loan terms and interest rate.

Interview and present your project to at least four lenders. The interview process gives you an opportunity to sell yourself. The more attractive you make the project, the better the interest rate you'll be offered. You can then compare the issue term sheets that lenders hand you. Read them carefully and don't be afraid to ask questions. Loan term sheets can be negotiable.