For most surgery centers, you have to get a loan of $2 million for the building (if built from ground up) and $1 million for equipment for a 7,000-square-foot structure, says Pedro Vergne-Marini, MD, managing member of Physicians Capital Investments. The banks will require you to submit several documents, including a financial statement from the "guarantors" and the practice. A pro forma based on your present and projected procedures must be prepared to show the feasibility of the project. You must also hire architects and engineers to develop and manage the project, all of which generate upfront costs.
In the past, medical students were steered away from taking business classes to complement their medical studies, which could help them with the business aspect of investing in a surgery center. "People thought if you were learning about business, you were going into medicine for the wrong reason: for money instead of taking care of patients," he says. "Now, there's a new mindset in which physicians are spending extra time obtaining MBAs."
It's important for physicians to establish good financial relationships with banks to receive initial loans. "Some people have to learn the hard way through trial and error," says Dr. Vergne-Marini. "Others bring in quality people, such as executive directors or accountants, who can track finances." For younger physicians partnering to invest in a surgery center, it makes more sense to purchase the property instead of leasing. This is a relatively safe way to increase your net worth and to compliment a retirement plan. "When it is a physician occupied building, you can get some pretty decent loans from small businesses and the bank," he says. "When you own the building, your property will have value. You are paying with pretax dollars and doing something for protection at the same time. You can also depreciate the building so you get an additional tax benefit by doing so."
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In the past, medical students were steered away from taking business classes to complement their medical studies, which could help them with the business aspect of investing in a surgery center. "People thought if you were learning about business, you were going into medicine for the wrong reason: for money instead of taking care of patients," he says. "Now, there's a new mindset in which physicians are spending extra time obtaining MBAs."
It's important for physicians to establish good financial relationships with banks to receive initial loans. "Some people have to learn the hard way through trial and error," says Dr. Vergne-Marini. "Others bring in quality people, such as executive directors or accountants, who can track finances." For younger physicians partnering to invest in a surgery center, it makes more sense to purchase the property instead of leasing. This is a relatively safe way to increase your net worth and to compliment a retirement plan. "When it is a physician occupied building, you can get some pretty decent loans from small businesses and the bank," he says. "When you own the building, your property will have value. You are paying with pretax dollars and doing something for protection at the same time. You can also depreciate the building so you get an additional tax benefit by doing so."
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5 Questions for Surgeons Considering Investing in ASCs5 Steps to Bring Total Joint Replacement Into Surgery Centers
9 Steps to Add Spine to a Surgery Center