What Can You Do?

The easy answer is to find another lender who is willing to approve your transaction on terms and conditions, including interest rates that you find acceptable – good luck.

The hard answer is to figure out a way to increase your equity infusion, handle a higher interest rate, accept tougher recourse arrangements (personal and/or corporate) and seek other methods for financing the “soft costs” (defined as pretty anything other than equipment).

In today’s market, there are many lenders looking to test the waters and see what the opportunities are. All of them are savvy about lending and many of them are savvy about healthcare lending, but how many of them are savvy about healthcare project-based lending for start-ups? All of them are driven by the prospect of making money. Sometimes they are independent lenders, sometimes they are bank and bank-related lenders and sometimes they are manufacturer and manufacturer-related lenders. They all have their plusses and their minuses (a topic for another day), but you, or a representative of yours, should scrutinize them very carefully – you may find one who has the right kind of interest in your project and will offer you terms that make sense to you and that you can live with. On the other hand, you may not. Here are some things to think about:

  • What are your strong points, as well as the strong points of your project?
  • How you can best leverage those points to get yourself the best deal you can, as well as a credit approval
  • What are your weak points, as well as the weak points of your project?
  • Have you done everything you possibly can to mitigate those weak points?
  • Do you have a good understanding of the lending community as it exists at this point in time?
  • Can you leverage your relationship with the manufacturer of the equipment you are purchasing?
  • Should you raise more money?
  • Should you wait?
  • Should you add (more) partners to your project?

This is a time to be prudent and thorough. If you have a project worth doing, then figure out the best way to get it done.

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