It’s fairly common knowledge that small and medium size businesses, like my clients who run Medical Imaging practices, pay more for their finance than big businesses. The premium is about 1%, which these days is the difference between the low 7s and low 8s.
But, some of the big boys get deals much better than that. For example, it was reported recently that Ramsay Health Care paid 1.65% over the swap for $400 million in 3-year debt. That equates to a rate of 5.79% based on last Friday’s published data. Transfield Services, on the other hand, is paying 2.7% over the swap to refinance $250 million in 4-year loans. That results in a rate of about 7%.
My continuing challenge is to convince lenders that Medical Imaging businesses represent the very lowest risk by virtue of their government-guaranteed income with next-day receipt of payments and principals who are among the most highly intelligent, highly motivated, and highly affluent of all borrowers. We want and deserve rates like the big boys.