What Refinancing Your Loans Means for a Medical Specialist Clinic Owner

A medical specialist who owns their consulting suite can refinance three debts: the mortgage over the suite, the borrowing that bought them into a group practice and the loan on the procedure and diagnostic equipment. These can be refinanced together or one at a time. This guide lists those loans side by side, explains what a refinance changes on each, and shows how combining them changes the monthly repayment and the total repaid.

Has the interest-only period on your rooms, when repayments covered the interest alone, just ended, so the repayment on the suite has gone up? Are you still paying off a share of the group practice while the stress-test system or the scopes come up for replacement? Do the gaps between a hospital list and the health fund's payment leave the overdraft drawn at the end of most months?

The AIHW reports that Medicare subsidised 35.6 million specialist attendances in 2024-25, and 26.8 million of them (75%) were in non-hospital settings such as private consulting rooms and private outpatient clinics. That rooms income sits beside hospital income in a specialist's accounts.

Ardent Capital Group can help refinance the loan on the suite, your practice share and the equipment loans, starting from the loan statements you already hold.

Specialist rooms, a practice buy-in and the equipment loans

Each of a specialist's loans was taken out at a different stage of building the practice, so each sits on terms of its own. The borrowing can trace back to three decisions.

• Buying the rooms. A strata suite in a medical centre or a building near a private hospital, held directly or in a family trust. A strata suite is one unit on its own title, in a building with shared common areas.
• Buying into a group practice. Paying an outgoing specialist for a share of the goodwill and the shared equipment. Goodwill is the value of a practice beyond its equipment and rooms, because patients and referring doctors choose it.
• Equipping the rooms so patients can be tested on the day rather than sent elsewhere.

A change to one loan is a reason to review the others. The loan on the suite may reach the end of its interest-only period, when the balance starts to fall. Or a partner may retire, and the group may ask the remaining specialists to buy the share.

Specialists who lease their rooms in a medical centre or from a hospital have no property loan. For them the fit-out and the lease take its place.

Example: a cardiologist's three loans, side by side

Cardiology rooms show the pattern clearly, because the testing equipment carries its own loan beside the rooms and the share. The figures are illustrative. The cardiologist owns a strata consulting suite valued at $1.8M, holds a share of a group practice and has a loan on the rooms' diagnostic equipment. The interest-only period on the suite has just ended.

Illustrative. The three rates are set for this example's arithmetic and are not market rates or quotes. The total covers the three loans only; the overdraft and any ATO balance sit outside it.

While the suite was interest-only at 6.8%, its repayment was $5,383. Principal and interest means each repayment also pays down some of the balance. Over the 20 years left, that takes the repayment to $7,252, which is $1,869 a month more.

The practice also runs an overdraft, a credit limit on its account, for wages and the medical indemnity premium. It is kept outside these figures because it is drawn and repaid rather than paid down.

Rate, term and security on a specialist's loans

When the rooms, the share or the equipment is refinanced, three settings on the new loan can change. Each acts on the repayment and the total repaid differently.

• Rate. If the rate drops and the term stays, the repayment and the interest still to come both fall. Each lender prices the loan itself, weighing the practice's billings, the security and your credit history.
• Term. The term sets how many months the loan takes to repay. Adding months makes each repayment smaller and the interest bill larger, since the money is owed for longer. It can still make sense for a specialist across a known stretch, such as the years the loan for a buy-in still runs.
• Security. Security is what a lender holds against the loan, such as the suite or the equipment. Lenders generally price a loan secured on property below an equipment or unsecured loan, and the property then secures the debt.

While the suite was interest-only, each payment met that month's interest and the $950k owing stayed where it was. Now every payment also reduces the debt. Because interest is charged on the balance, it takes most of each early payment and less of each one after.

On the suite, the first principal-and-interest repayment of $7,252 is $5,383 of interest and $1,869 off the balance. That is exactly the amount the repayment rose by.

Refinancing each of the specialist's loans

The three loans were each sized for a different purchase, and each can move on terms that suit what it paid for.

The loan on the consulting suite

The loan on these rooms is the largest of the three in the example, and the rooms themselves secure it. Consulting rooms and medical suites are standard commercial security, geared to up to 80% of a current valuation. Geared here means lent against: the loan as a share of the rooms' value, known as the loan-to-value ratio (LVR).

Published commercial loan terms run to 10 to 15 years at the banks and 25 to 30 years at non-bank lenders. A loan on the suite at the end of its term or interest-only period can then move to a term that fits the years you plan to practise from the rooms.

A refinance usually starts with a fresh valuation. If the suite has risen in value and the balance has fallen, a lender may lend against the difference, up to 80% of the new valuation. If all three loans in the example were secured on the suite, $1.32M of loans against a $1.8M valuation would be about 73%.

In an owned suite, the fit-out becomes part of the property. That takes in the consulting rooms, a procedure room with its scrub basin, the reception desk and the joinery. A fit-out loan can then be refinanced into the loan on the suite. In leased rooms, lenders limit a fit-out loan to the lease's remaining years and options. Options are the lease's built-in rights to extend for further years. The make-good clause decides what is removed at the end, so the rooms are handed back in the state the lease sets.

A few details can change what moving the loan on the suite costs. A fixed rate may come with a break cost: a fee for ending a fixed rate early. The more rates have fallen since the rate was fixed, the bigger it is. A new lender may also set an annual review. At that review, the lender may check the practice's recent trading and whether the suite still supports the loan. A specialist joining or leaving the group is the kind of change it asks about. The specialists can also use that moment to see if a different lender may offer more competitive terms on the suite. Our guide explains what a specialist can expect at a loan's annual review. If a room is let to another specialist or an allied health tenant, it helps to bring the signed lease.

The loan for your share of the group practice

The loan for a buy-in pays for a share in the group practice. A buy-in pays an outgoing specialist for a share of the practice's goodwill, its shared equipment and sometimes its rooms.

Some lenders can lend against medical goodwill, subject to their own policy.

A refinance can change the rate, move the buy-in onto property security, or shorten or lengthen the months left. In the example it carries $6,281 a month on a $250k balance, and that repayment stops after 48 months.

The practice agreement governs the share. It sets out what the share entitles you to, what happens when a partner leaves and whether you have guaranteed the group's own debts. A guarantee makes you personally answerable for a debt if the borrower falls short.

Procedure and diagnostic equipment

Each specialty fills its rooms with different equipment, and each item can carry a loan of its own. Cardiology rooms hold a stress-test system, Holter monitors and ECG machines. Respiratory rooms run lung function testing equipment. ENT rooms use flexible nasendoscopes and the automated reprocessor that cleans them, and urology rooms a urodynamics system.

The equipment itself secures these loans, under a chattel mortgage or a lease. With a chattel mortgage, the practice owns the equipment from the start and the financier's claim is registered over it. With a lease, the financier owns the equipment and the practice pays to use it. A refinance can reset their pricing and length, and any balloon (a final lump sum left owing when the contract ends).

A refinance cannot change how long the equipment stays in service. It helps to set the depreciation life your accountant uses for each item beside the months left on its loan. When a replacement is due, one deal can clear the old loan and fund the new equipment, so one room does not carry two loans at once. An equipment contract on a fixed rate may carry an early payout charge, a cost written into the contract for clearing it ahead of time. It helps to get the payout figure, the sum that clears the contract on a given day, in writing first.

The overdraft and an ATO balance

A specialist is paid from two places, and each pays on a different timetable. Rooms income arrives as patients pay and claim their Medicare rebate, or as Medicare pays the practice directly. Hospital income arrives when Medicare and the patient's health fund process the account.

An overdraft carries wages, rent on any leased rooms and the medical indemnity premium in between. Folding it into a term loan wipes the balance. It also leaves the practice without a facility to dip into when the indemnity premium comes round again.

Medical services that attract a Medicare benefit are GST-free, meaning no goods and services tax applies to them. So the BAS, the business activity statement a practice lodges with the ATO, carries little GST on fees. An ATO balance can still build from income tax, or from PAYG withholding, the tax taken out of employees' pay. A business loan can clear it. Interest on the practice's borrowing may be claimable; the ATO's own interest charges stopped being claimable from 1 July 2025. How that plays out for your practice is your accountant's call.

Combining the cardiologist's loans

The cardiologist can then weigh whether some or all of the practice's loans belong together. Combining them can lower the monthly repayment while raising the total repaid.

Worked example: the same $1.32M of loans four ways

All four options start from the same three balances. Each is measured against the cardiologist changing nothing, by the change in the monthly repayment and in everything repaid over the term. One option uses a split, a portion of the loan on the suite kept apart with a term of its own.

Illustrative and rounded. Every property-secured option uses the same assumed 6.8%, so the differences come from term and security alone. Valuation, legal and break costs, payout charges and future rate movements are not included.

Moving the buy-in and equipment loans onto a 48-month split brings the repayment down by $1,355 a month. The split is the only option that costs less in total, $18k less. That is because it moves the two shorter loans onto the assumed property rate without lengthening the buy-in.

The split does stretch the equipment loan by 12 months, into the years the stress-test system may be replaced. One 25-year loan cuts the monthly repayment by $8,271 and adds $567k to the total repaid. The Holter monitors and the buy-in would then be paid off over the same years as the suite.

Which trade suits depends on how many years you plan to practise from the rooms and when the equipment is due for replacement. It also depends on what the household needs from the practice meanwhile. We would line up every payout figure, then set the options out on repayment and total repaid. We would then put your chosen option to lenders suited to a specialist practice. The figures are not quotes, and nothing in them is approved.

Security for the refinanced loans

A specialist can offer the rooms, the equipment, the practice or the family home, and each choice carries its own trade.

• The suite. A specialist who owns the rooms can offer them as security, up to 80% of the valuation.
• The equipment. The financier of each item holds a claim over it. That claim ends when the old loan is paid out, and the incoming lender then takes its own.
• A general security agreement. A buy-in or business loan can be secured over the practice's assets by a general security agreement. It gives the lender a claim over the practice's personal property, such as its equipment and the fees owed to it. The agreement is listed on the PPSR, the national register of security interests in personal property. It does not cover land, buildings or fixtures to land. At payout the old registration comes off and the new one goes on.
• The home. Practice debt secured on the home generally attracts a lower rate and can run over more years. The home then secures the practice's debt. Whether to do so is your decision, with the totals in the worked example in view. Our home loans for doctors cover the home loan itself.

Our page on refinancing a medical specialist clinic property covers the loan on the suite, including rooms let to other practitioners.

A family trust, a service entity or a second set of rooms

A specialist's rooms, share and equipment can sit in different names, and each name comes into the refinance. Take a suite held in a family trust that charges the practice rent, with the buy-in held by you personally. The equipment sits in a service entity, a separate company or trust that holds equipment or employs staff for the practice.

Here the lender assesses the trust, the service entity, you and any other guarantor. The rent is income to the trust and a cost to the practice. Each entity's accounts and returns go into the application, along with each guarantor's personal debts. With financial planning in its background, our team at Ardent Capital Group can propose which entity carries each refinanced loan. The tax and ownership questions go to your accountant to confirm.

Before you apply to refinance the practice's loans

Leave, fellowships and lodgement dates all show in the figures that go with a specialist's application.

What to sort out before applying

Four items can change when a specialist's refinance makes sense, or what goes in with it.

• Written payout figures. It helps to ask for these first. A break cost on the suite or an early payout charge on the equipment can outweigh the saving. If it does, the comparison can be revisited in the last months of the fixed rate.
• A year with leave or a fellowship in it. Months away from the rooms show as lower billings, and a full year either side shows the comparison.
• Lodged returns and BAS. Lodging them before you apply keeps the practice's figures up to date.
• Signed agreements. The practice agreement and any leases to associates or tenants go in as signed copies.

How rooms income and hospital income reach the practice

A specialist's income reaches the practice through Medicare, health funds and patients, each on its own timetable.

• Rooms consultations. Out of hospital, the Medicare benefit for a specialist attendance is generally 85% of the schedule fee. The schedule fee is the amount Medicare sets for each service, and any fee above the benefit is the patient's gap. Bank statements show these as card and Medicare receipts.
• Hospital procedures. For a private patient, Medicare covers 75% of the schedule fee. The rest of the account goes to the patient's health fund and the patient. These receipts arrive after the list they relate to.
• Referrals. A GP referral to a specialist lasts 12 months from the first consultation unless the GP writes otherwise. A referral from another specialist lasts 3 months, except for a patient admitted to hospital, where it lasts until discharge if that is later. New referrals and review consultations both appear in the practice software's billing reports.
• Service fees and wages. A service fee the group charges for rooms and staff is a cost to the specialist. Practice nurses are paid under the Nurses Award; medical receptionists and administrative staff under the Health Professionals and Support Services Award.

Documents for a specialist practice refinance

The lenders, the practice software and the accountant's files supply most of these papers.

• Payout letters for every loan, showing any break cost, early payout charge and balloon
• Recent statements for every account receiving Medicare, health fund and patient payments
• Each entity's financial statements and tax returns for two years, plus year-to-date figures
• Billing reports from the practice software, split between rooms and hospital
• The practice agreement, the strata title details and any leases
• Equipment invoices, purchase dates and service contracts
• The ATO statement of account and any payment plan
• Statements for each borrower's and guarantor's personal debts: the mortgage on the home, any car finance and credit cards

Questions specialists ask about refinancing

My interest-only period on the rooms has ended. Can I get another one?

You can ask for one on a refinance, and the lender decides. The balance does not fall while it runs, so it suits a defined stretch, such as the years left on the loan for a buy-in.

My buy-in to the group was three years ago. Can that one loan move on its own?

That is open to you, subject to the lender. The loan for the buy-in can move to another lender on its own or be secured against your rooms. The practice agreement and your share of the billings go in with the application.

A partner is retiring and the group wants me to take up the share. Can I fund it alongside my current loans?

It can be. The new share can be funded as its own loan or refinanced together with the existing buy-in. The updated practice agreement and the billings the larger share brings go in with it.

Will a lender count what I earn operating at the private hospital?

It can be, subject to the lender, once it is in your financials and bank statements. Because it arrives after Medicare and the health funds pay, a full year of figures shows it best.

Can the procedure room I built go into the loan on my suite?

In a suite you own, it can, subject to the valuation and the lender, because the fit-out is part of the property. In leased rooms its term follows the lease.

Can I borrow against my rooms to clear the equipment loan?

That can be an option, up to 80% of the suite's current valuation across everything it secures. A shorter split for the equipment portion lets it clear before the equipment is replaced.

My family trust owns the suite and charges the practice rent. Can both loans be refinanced together?

Both can move at once, to one lender or two. The trust's rent, the practice's billings and each guarantor's own finances all go into the application.

The supplier is offering finance on a new stress-test system. Should my old loan go into it?

Rolling the old balance in makes the new loan larger and longer. We can compare the supplier's offer with other lenders on repayment and total cost before you sign.

Does my medical indemnity premium affect how much I can borrow?

It can. The premium is a cost of the practice, beside wages, the service fee and rent. An overdraft sized for the month the premium falls due keeps it off the term loans.

Does getting payout figures go on my credit file?

No, and neither does talking it through with us. A formal application is recorded on each borrower's and guarantor's file, so we lodge it only with lenders suited to a specialist practice.

Refinancing the loans on your rooms and practice with us

A specialist's loans were taken out for the rooms, the share of the practice and the equipment in them, each on its own term. Refinancing them means setting each against the years you will practise from the suite, the life of the equipment and the way Medicare, health fund and patient payments land in the practice account. Ardent Capital Group's help covers refinancing the loans on a consulting suite, a practice buy-in and equipment, and we also look after medical practice business loans and working capital. If the end of an interest-only period or a partner's retirement has put your loans in front of you, we would be glad to look at them with you.

Written by

Nick Chong

Managing Director, M.AppFin, Dip. Mortgage Mgmt

Nick holds a Bachelor of Agricultural Economics, a Master of Applied Finance and an Advanced Diploma in Financial Planning. He founded Ardent Capital in 2016 after more than a decade in financial planning and mortgage broking. For the past ten years he has led a team of finance specialists, mortgage advisers, brokers and credit analysts, all working to secure optimal outcomes for clients and always acting in their best interests. The team brings both a qualitative and a quantitative approach to every deal.