Structuring debt finance for healthcare assets

Match the facility to the cash flow

Fit-out and equipment spend, working capital and property acquisition each have distinct repayment profiles. Funding all three from one facility usually leads to amortisation pressure long before the asset reaches stabilised earnings.

A layered structure — term debt against property, an amortising facility for equipment, and a revolving line for working capital — keeps repayments aligned with the income each dollar produces.

• Term debt for property and long-life assets
• Amortising equipment finance matched to useful life
• Revolving working-capital facility sized to receivable cycles

Negotiate covenants you can actually live with

Interest cover and leverage covenants are negotiable, and the headroom you agree at financial close determines how much operational flexibility you retain.

Build covenant testing around a realistic ramp-up curve, and negotiate cure rights so a single soft quarter does not trigger a default event.

Preserve room for the next raise

Security packages, negative pledges and change-of-control clauses can quietly block the equity round you need two years from now. Every debt term should be reviewed against your medium-term capital plan, not just today's requirement.

• Check permitted-indebtedness baskets before signing
• Confirm prepayment and refinance economics up front
• Keep the security package as narrow as the lender will accept