A number of factors contributed towards the success of this deal. The combination of our young Chiropractor client’s industry experience and a strong unique brand and professional profile in the community provided a solid foundation in this application. We were able to use the client’s consolidated historical earnings the past 2 years when she used to contract to franchisee clinics to show her income was growing strongly. Finally, a low risk occupation was another success factor for approving the loan by the industry specialist lender.
A young Chiropractor who had been contracted to two franchise clinics for several years wanted to purchase and run a clinic of her own. She had her sights set on a family run clinic which was literally foot steps away from where she lived. The clinic was well established with a following in Sydney’s inner west.
The Head Chiropractor who was also the owner, was moving interstate so there was a clean and logical exit. The other staff, being a receptionist and massage therapist, were to remain.
Our young Chiropractor client had over five years of practicing experience. Her unique brand was the niche of treating pregnant women so they would be comfortable during pregnancy and also have a better chance of a smooth delivery.
As our client was contracted to two clinics full time, if she were to take over this new clinic she would need to dramatically reduce her existing current contract work, meaning her income would halve. On half her historical income, she would not be able to afford the loan. Therefore we needed a lender that could consider the projected income she would earn when she took over the new clinic.
Generally it is major business banks that offer the policy because of their larger balance sheet and risk appetite. However they come with special requirements of their own! Given their larger risk appetite they naturally have a significant volume of customer inquiries, often more than what their resources can efficiently handle and this leads to long wait times or even being very particular with the transactions they deal with. It’s not unusual for a major business bank to take weeks or months or not be interested because it is too small.
Further to this bidding would close in 2 weeks and a competitor buyer had verbally offered the asking price already and they would be paying with cash.
We took the following actions to help our client achieve her objectives:
At the same time, a lease was being put in place with a GSA, Director Guarantee approved with MedPro – 20% deposit, 2 years of billings with summary, business plan and detailed client background.
The loan was approved for a 4 year total term at 13.95% pa. The loan was on structured repayments – $1,750 per month for 3 months, then $3,992 per month for the remaining 45 months.
