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Alex Read, founder and chief executive of Portman Finance Group, explains why lenders and brokers must do more to support the sector.
The UK’s private healthcare sector is a broad and vital part of the country’s health infrastructure, spanning not just hospitals and GP clinics, but also specialist diagnostic centres, dental practices, opticians, care providers and treatment facilities.
With pressure rising on the NHS, these businesses are growing to meet rising demand and plug the shortfall. It’s estimated that one in seven people now use private healthcare – double the proportion since 2023 – and providers are investing to meet that demand.
For one provider, that might mean acquiring a new MRI or ultrasound machine. For another, it could involve refurbishing a clinic, opening an additional treatment room, recruiting specialist staff or upgrading patient booking and record-management systems. Each investment can increase capacity and improve patient experience.
External finance can play a central role in bridging the gap between growing demand and the investment required to meet it – but only if businesses feel like the market is giving them the right support.
Ambition is strong, but confidence needs treatment
Healthcare businesses are highly ambitious, with our research showing that 88% want to grow their business. The same percentage say they are likely to use external finance to support that growth.
The problem is, however, a lack of confidence in the market. Healthcare providers are making decisions that affect real patients as well as balance sheets. When a clinic invests in equipment, premises or staff, it needs total confidence that the funding arrangement will remain affordable and appropriate throughout the life of that investment.
Our research found that a lack of trust in lenders is considered a major or very major barrier by more than 30% of healthcare businesses, while nearly half, 47%, say a lack of transparency in finance terms is a major or very major obstacle.
Application complexity, cited by nearly three in ten as a major or very major barrier, adds further friction, as healthcare funding requirements are often highly specific. A dental practice financing treatment equipment has different needs from a diagnostics provider acquiring a scanner or a clinic refurbishing new premises.
Put simply, the consequences of getting it wrong are even more pronounced in healthcare – especially when decisions are about extremely high value equipment or technology. Even a small degree of uncertainty can delay or postpone investment, with knock-on effects for patient care and the speed of diagnosis or treatment.
Healthcare firms therefore need finance from a partner they can actually trust and structured in a way that aligns with clinical need.
A more consultative approach
For healthcare providers seeking external finance, choosing the right partner is just as important as choosing the right equipment.
First and foremost, they need to think about their business and clinical objectives. Are you trying to reduce waiting times, recruit clinicians, improve digital systems or open a new site? Once that objective is clear, the next step is to start an open dialogue with your finance provider to give them a benchmark from which they can assess the best option.
From there, a finance provider will be much better positioned to explain to you what is suitable, what is unlikely to work and what information will be needed before a full application begins. A good provider will also take the time to explain how different products work, what they are likely to cost and the associated risks to consider too.
This is the best way to forge a trustworthy and sound relationship with a finance provider. Any provider that immediately and unquestioningly says yes to an application without properly understanding its customer’s business needs can be just as much of a red flag as the opposite end of the spectrum of being asked to go through a web of credit checks and assurances. After all, sometimes the right answer may be to delay an investment or seek a different product – which is why healthcare firms should work with a partner to choose the best course of action and feel more confident in the lending process.
Private healthcare businesses are growing, and many expect finance to be part of that journey. The market now needs to give them the confidence and support to act. Clearer terms, simpler processes and advice grounded in the realities of healthcare can help providers invest and meet the changing needs of patients.
