Joint Ventures FAQ

Who can apply? 
A physician (MD or DO), or Dentist/Oral Surgeon (DDS or DMD) that needs financing for their investment into an Ambulatory Surgery Center or Dialysis Center. 

 

How much can I borrow? 
Maximum loan amount through the online portal is $350,000. If your investment opportunity is going to require a loan amount larger than $350,000 please contact us here.

 

What can the loan proceeds be used for? 
To finance up to 100% (maximum loan amount via website of $350,000) of the equity investment of the investor (See “Who can apply” FAQ) into an Ambulatory Surgery Center or Dialysis Center. 

 

Will this loan effect my personal credit score? 
This loan is a commercial loan, and accordingly not reported to any of the Credit Bureaus.

 

How does the process work? 
Interested party completes the online application. 

If the application is approved the applicant will then be able to select their preferred rate & term options based on their application 

Once the desired rate & term options are selected the Bank will use the documents you upload to verify the application and confirm the approval. 

The Bank will reach out to the applicant to go over the approval and to request legal documents needed to prepare the loan documents. Those could include purchase agreements, articles of organization and operating agreement related to the entity you are investing in.

Loan documents will be sent to the applicant for their electronic signature Once loan documents are signed, loan proceeds will be sent to the appropriate entity (operator, entity owner) 

Loan payments will be automatically drafted from a deposit account at the Bank. Distributions will come into the associated bank deposit account to make loan payments. Funds in the associated bank deposit account above the reserve requirement are able to be freely distributed on to the borrower. 

The reserve requirement is a requirement that the bank deposit account have a balance held in reserve equal to one quarter’s worth (3 months) of the loan payment. This is done so that in the event future distributions are delayed there will be enough funds in the account to cover the quarterly loan payment without the borrower having to fund the loan payment from their own personal funds at their personal bank. 

 

What are the closing costs? 
Closing costs may consist of: 

  1. Origination Fee (equal to ¼% of the amount financed/loan amount) 
  2. UCC Filing Fees (In the event the borrower sets up an entity (i.e. an Limited Liability Company) the UCC filing fee is the fee the Bank pays to note our lien on the entity’s interest in the ASC or Dialysis center 
  3. Attorney Fee; fee collected to pay attorney for preparation of loan documents
  4. State Indebtedness tax; in some states commercial loans require the Bank to collect a tax that is equal to a portion of the loan amount. The bank then sends that tax on to the appropriate state government. 

 

Can the closing costs be added to the loan amount? 
Yes, the closing costs can be included in your loan amount. 

 

What if I’m a member of a group of investors looking to make a collective investment? 

That’s great, and we’re happy to discuss financing with you & your partners. Please contact us here , and we’ll reach out directly to further discuss your opportunity. 

 

What if I want to make extra payments on my loan? Is there a penalty? 
There is no penalty for making extra payments towards the outstanding loan principal, or paying the loan off early from personal income and/or cash flow. A prepayment penalty would only be applicable if the loan is refinanced with another lender, or you sell your investment early & subsequently pay off the loan early. The prepayment penalty is as follows: Year 1: 2%, Year 2: 1%, and Year 3: 0.5%. 

 

Do I have to set up a deposit account with you? 
Yes, as part of the loan closing process a deposit account at our Bank will be set up. The account will be used to receive the distributions from the investment & to automatically make the loan payments. 

 

Who are you? 
Learn more about us here.

 

What if the investment I’m considering is larger than $350,000? 
We’d love to speak with you further about financing options for your ASC/Dialysis center investment if your proposed investment is larger than $350,000. To do so, please contact us here. Our website is only currently capable of processing requests below $350,000, but we have experience financing similar transactions at larger dollar amounts. 

 

Do you have online/mobile banking? 
Yes, during the closing process we will set you up on our online/mobile banking platform so that you can have real time access to your loan & deposit accounts. 

 

What is the interest rate? 
Our interest rates (fixed and variable rate options) are competitive, and are calculated using your personal credit score, income, and current debt obligations.

 

What is the term of the loan? 
Available loan term options are 5, 7, and 10 year terms. 

 

Who will be the borrower? What if I set up a legal entity to own my investment? 
In the event you wish to borrow in your personal name then you will be the borrower. If you’ve set up, or are using, a legal entity (LP, LLC, or trust), then that entity will be the borrower and you individually will guarantee 100% of the loan. 

 

What happens if the distributions are not enough to cover my payment? 
Should the distributions be less than the loan payment then you will need to fund the difference to make the loan payment.

 

Am I required to pledge life insurance as part of my loan? 
Yes, for loan amounts greater than $300,000 the Bank does require that the borrower pledge a life insurance policy they own. The policy needs to be at least in the amount of the loan.