How Long Does It Take to Finance an Ambulatory Surgery Center?
Financing an ambulatory surgery center can involve a significant amount of capital and multiple steps before funding is completed. The timeline can vary depending on whether the physician is starting a new ASC, purchasing an existing facility, acquiring real estate, financing equipment, or combining several financing needs into one transaction.
For physicians considering ambulatory surgery center financing, understanding the financing process can help physicians prepare properly and avoid unnecessary delays.
1. The Initial Financing Review
The financing process generally begins with an initial review of the physician, business, and proposed transaction.
Lenders may evaluate the requested loan amount, purpose of financing, credit profile, financial strength, professional experience, and overall project.
2. Gathering Financial Documents
Financial documentation is an important part of the financing process.
Depending on the transaction, physicians may need to provide:
- Personal tax returns
- Business tax returns
- Personal financial statements
- Bank statements
- Profit and loss statements
- Balance sheets
- Existing debt information
- Business formation documents
Having these documents organized in advance can help keep the financing process moving.
3. Financing an Existing ASC
An acquisition may require additional documentation because the lender may need to evaluate both the buyer and the business being purchased.
The lender may review historical financial statements, the purchase agreement, revenue, expenses, cash flow, equipment, real estate, and other details of the transaction.
4. Financing a New ASC
A startup ASC can involve a different financing process because there may not be historical financial statements.
Instead, lenders may place greater emphasis on the physician’s financial position, professional experience, business plan, projected revenue, startup budget, and expected operating expenses.
5. Real Estate Can Affect the Timeline
If the financing includes purchasing a facility, additional property-related steps may be required.
These can include reviewing the purchase agreement, evaluating the property, obtaining an appraisal when required, and completing other real estate due diligence.
6. Equipment Can Add Complexity
Medical equipment can represent a substantial portion of an ASC’s investment.
If equipment is included in the financing request, physicians may need to provide equipment quotes, invoices, specifications, or other information.
7. The Underwriting Process
Once the required information has been submitted, the financing request can move into underwriting.
During underwriting, the lender may evaluate the borrower’s credit, financial statements, cash flow, debt obligations, collateral, project details, and other relevant factors.
More complex transactions may require additional review and documentation.
8. Missing Information Can Cause Delays
Incomplete documentation can slow down the financing process.
If financial statements, tax returns, purchase documents, equipment quotes, or other requested information are missing, additional information may need to be provided before the financing request can move forward.
9. Complex Transactions May Take Longer
A straightforward financing request can generally be easier to process than a transaction involving multiple components.
For example, an ASC acquisition that also includes real estate, equipment, renovations, and working capital may require additional documentation and due diligence.
10. Borrower Preparation Matters
Physicians can help make the process more efficient by preparing their financial and business information before submitting a financing request.
Having financial records, business information, purchase documents, project budgets, and other relevant information organized can help reduce unnecessary back-and-forth.
11. Financing Timelines Can Vary
There is no single timeline that applies to every ambulatory surgery center financing request.
A relatively straightforward transaction may move faster than a complex acquisition, startup, or development project.
The financing program, transaction size, borrower qualifications, property, documentation, and underwriting requirements can all affect the timeline.
12. Start the Process Early
Physicians should avoid waiting until the last minute to begin financing discussions.
Starting early provides additional time to gather documents, address potential issues, evaluate financing options, and prepare for closing.
13. Keep Communication Moving
Quickly responding to requests for additional information can also help prevent unnecessary delays.
Physicians should remain available throughout the financing process so questions and documentation requests can be addressed as efficiently as possible.
14. Ask Questions About the Expected Timeline
Physicians should discuss the expected financing timeline early in the process.
Understanding what steps are involved and what documentation may be required can make it easier to coordinate financing with an ASC acquisition, construction project, real estate purchase, or other major investment.
Final Thought
The time required to finance an ambulatory surgery center depends on the type and complexity of the transaction. Acquisitions, startups, real estate purchases, equipment financing, and projects involving multiple financing needs can all have different timelines.
Physicians can help keep the process moving by preparing accurate financial information, responding quickly to documentation requests, and beginning the financing process well before the anticipated closing or project start date.
