Many medical professionals aren't aware of the various benefits available to them, and it can end up costing them money or financial stress that could have been easily avoided with the right advice.
As highly skilled professionals, Australian medical and allied health professionals have unique financial needs that require careful consideration when it comes to both commercial and residential finance. With a demanding career that often involves long hours and high levels of stress, it's crucial for them to work with finance experts who understand their situation and can provide tailored solutions.
Commercial Finance Options
For medical professionals who own a practice or are looking to purchase one, commercial finance can be a complex process that requires careful planning and attention to detail. A range of financing options are available, including the ability to borrow up to 100% of the purchase price of a practice.
One common option is to take out a commercial loan to purchase, expand, or buy into a practice. These loans can be secured or unsecured and provide doctors with access to the capital required to grow their business. However, it's important to carefully consider the terms of the loan, including interest rates and repayment schedules, to ensure that they align with the practice's cash flow and financial goals.
Another option is to take out a commercial property loan to purchase a practice premises. These loans can provide funding up to 100% of the purchase price of the premises through a company or trust structure, and up to 90% of the purchase price through a self-managed superannuation fund (SMSF). These arrangements provide medical professionals with greater stability and control over their premises and can accelerate wealth generation through property ownership. This is a great alternative to increasing the wealth of a landlord by renting a space.
Residential Finance Options
When it comes to residential finance, medical professionals often have unique considerations that may impact their ability to secure a loan or negotiate favourable terms. For example, they may have high levels of debt from student loans and limited time to dedicate to the loan application process due to demanding careers.
A good option for medical professionals is to build a relationship with a specialist broker who understands their career and income progression. Favourable loan terms, competitive market rates, future income projection to assist with borrowing capacity, and reduced deposit requirements (such as 95% LVR with no lenders mortgage insurance up to $5,000,000) are benefits that can work to their advantage.
It is also important that they carefully consider the type of home loan that best suits their needs. For example, fixed-rate loans provide certainty and stability in repayments, while variable-rate loans with an offset account generally offer greater flexibility with an eye on the future.
Finally, medical professionals may also wish to consider their options for investing in property as a means of building long-term wealth. Property investment can be a complex process that requires careful consideration of the risks and potential returns. However, with the right guidance and expertise, medical lending policies can be leveraged to build a diverse investment portfolio faster than most with considerably less of a deposit and lower up-front costs.
With the right guidance and expertise, medical professionals can navigate the complex financial landscape to build successful practices and secure their long-term financial futures. For any commercial or residential finance requirement, medical professionals should look to work with a finance broker who understands their career and income progression and can provide access to more than one option so they can find the best outcome to suit their needs.
Looking to review your current finance arrangements or discuss how we can help you start your practice? Speak to one of our Finance Advisors today.
