Plastic Surgery Practice Refinance Options
Over time, many aesthetic practices build up a patchwork of debt: a build-out loan for the office, separate leases for lasers and body contouring devices, an acquisition loan and perhaps a line of credit. A plastic surgery practice refinance may help simplify those obligations, adjust payment schedules or better match each debt to the life of what it financed. Whether refinancing makes sense depends on the terms of the existing debt, the practice’s cash flow and the options available.
This article explains common reasons to refinance, the types of debt practices often review and what lenders typically look at. Nothing here is legal, tax or accounting advice, and every loan is subject to approval. Nothing here is a commitment to lend.
Why Plastic Surgery Practices Consider Refinancing
- Too many separate payments: multiple device leases and loans can be hard to manage
- Mismatched terms: long-term assets such as build-outs may have been financed with short-term debt
- Cash flow strain: combined payments may squeeze marketing, payroll or reserves
- Changed circumstances: the practice may be stronger than when the original debt was taken
- Ownership changes: a buy-in, buyout or acquisition may be a natural time to restructure debt
Types of Debt Practices Often Review
A plastic surgery practice refinance may involve reviewing:
- Build-out and leasehold improvement loans
- Equipment loans and device leases
- Acquisition or partner buyout loans
- Lines of credit with balances that have not been paid down
- Seller notes from a prior acquisition
- Short-term business financing, including any merchant cash advance
Each obligation has its own terms, including prepayment provisions, end-of-lease obligations and collateral. Some leases may be difficult or costly to pay off early, so reviewing the agreements is an important first step.
There is no guarantee that every obligation, including every merchant cash advance, can be consolidated or refinanced, and whether a particular obligation can be included depends on its terms, the business’s cash flow, program rules and lender review.
Device Leases and Equipment Debt
Aesthetic practices often add technology one device at a time, each with its own financing. Over the years, some devices may be paid off while others still carry payments, and some may be used less than expected. When reviewing equipment debt, consider which devices are still producing revenue, what each agreement requires at the end of the term and whether payoff amounts are reasonable. Our article on plastic surgery equipment financing explains how loans and leases differ.
Refinancing Options
Depending on the practice and its debt, options may include:
- SBA 7(a) loans: SBA 7(a) loans may be used to refinance certain existing business debt when program requirements are met, subject to eligibility and lender review
- Conventional loans: conventional practice loans may consolidate obligations for practices with strong financials
- Real estate refinancing: owners of their building may restructure mortgage debt separately from practice debt
- Restructured working capital: a properly sized plastic surgery line of credit may replace short-term borrowing used for operating needs
The right combination depends on what each debt financed, how long the asset will last and the practice’s cash flow.
What Lenders Typically Review
- Several years of tax returns and current financial statements
- A complete debt schedule with balances, payments and terms
- Copies of loan and lease agreements, including payoff provisions
- Revenue trends by cosmetic, reconstructive and nonsurgical categories
- Patient deposit and prepaid package obligations
- Owner credit and personal financial statements
Lenders want to see that the practice can comfortably support the new payments and that refinancing improves its overall position.
Refinancing During an Ownership Change
Buy-ins, partner buyouts and acquisitions often bring existing debt into focus. A new partner may not want to become responsible for obligations they did not take on, and a buyer may need the seller’s equipment leases paid off or assumed at closing. Reviewing the debt schedule early in these transactions can help the parties decide which obligations will be paid off, refinanced or carried forward, and how that affects price and financing. Counsel and accountants should help document those decisions.
Build-Out Debt and Long-Term Assets
Many practices financed a surgical suite or high-end build-out with shorter-term debt because it was available at the time. Matching long-lived improvements with longer-term financing, where a lender and program allow it, may ease monthly pressure and leave more room for marketing and reserves.
When a Plastic Surgery Practice Refinance May Not Help
Refinancing is not always the answer. It may not make sense if prepayment costs outweigh the benefits, if the practice’s revenue has declined significantly, or if the underlying issue is spending rather than debt structure. Extending terms can lower payments but may increase total cost over time. An accountant can help evaluate the tax and financial effects.
Prepare Before You Apply
- List every obligation, its balance, payment, rate and maturity
- Gather the agreements and request payoff quotes
- Identify which devices and improvements are still producing revenue
- Review recent financial statements with your accountant
- Estimate new payment scenarios with our conventional loan calculator, for planning purposes only
You can also learn more about plastic surgery practice refinancing and debt consolidation and our broader plastic surgery practice financing options.
Final Thoughts
A plastic surgery practice refinance can help simplify payments, align debt with the life of the assets it financed and free up cash for the practice. Reviewing each obligation carefully and understanding the trade-offs can help you decide whether restructuring is the right move.
US Medical Funding helps plastic surgeons review existing practice debt and compare refinancing options. Not every existing obligation will qualify to be refinanced, but we can help you understand which options may fit.
