Physician Loans FAQ

Q. What are the terms of a loan?
A. The loan is structured to be fully repaid over a five- to seven-year time frame; regardless of the repayment schedule, the loan matures within five years from closing.

Q. What happens after five years?
A. If the remaining balance of the loan is not repaid, the loan may be extended for a period of time at the option of Physicians Capital.

Q. What is the collateral?
A. Typically, the collateral is only your ownership interest in the outpatient center.

Q. Are there any origination fees?
A. Yes, they typically range between 2% and 3% of the loan amount; however, these fees are included in the loan so that you have no out-of-pocket cash outlays. In addition, there are also legal fees due at closing, but they can be paid out of the first distribution payment.

Q. Does my spouse have to be a co-signer?
A. Not necessarily.

Q. Is the debt reflected on my personal credit history?
A. No. Physicians Capital is not required to report to the credit rating agencies.

Q. Can I accelerate loan payments?
A. Yes. Loans can be prepaid without any penalty or fees.

Q. What is the process for making a principal payment?
A. The surgery center will send the distribution check directly to Physicians Capital where we will apply the scheduled principal and interest payments toward the outstanding balance of the loan.

Q. What happens to the balance of the distribution after the scheduled debt service has been paid?
A. A check for the amount of the distribution remaining after deduction of the scheduled debt service is sent via U.S. Mail within 48 hours of receipt in our office. Or, you may elect to apply any or all of the balance to your outstanding principal amount.

Q. What type of notification do I receive?
A. Physicians Capital will send you a statement showing how the funds were applied after each distribution check has been received and processed. This is either on a monthly or quarterly basis depending on when the center makes the distributions.

Q. Am I fully liable for the debt?
A. Yes, Physicians Capital makes the loan to you.

Q. Once the loan is paid in full what occurs?
A. We notify the ASC upon the loan being repaid and provide you with documentation evidencing that the pledge of your ownership interest in the ASC has been released by Physicians Capital.