May 27, 2026 • 20 mins
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Interest rates are supposed to be boring, but they can decide whether your practice feels effortless or constantly tight on cash. We sit down with finance specialist Kevin Saunders to make sense of the latest Bank of England base rate picture, why inflation still matters, and why some economists are now talking about rate rises again rather than cuts. If you are a UK dentist with a loan on a variable rate, or you have borrowing you have not looked at in years, this is your nudge to stop running on autopilot.
We get practical about refinancing for dentists: who should consider a review (especially borrowing taken out between 2008 and 2020), how practice valuations can unlock better terms as your business matures, and why stacked short-term equipment finance can quietly drain your monthly cash flow. We also talk through the real-world friction costs people forget, like valuation fees, legal fees, and early repayment charges, so you can judge whether switching is genuinely worth it.
Kevin shares how newer lending products and longer terms, including 20-year goodwill loans, can reduce repayments even if the interest rate is slightly higher. The goal is simple: improve cash flow and direct the surplus into building personal wealth, including paying down your residential mortgage where there is no tax relief on interest. We finish with straight talk for first-time buyers: waiting for the “perfect” rate can mean missing the perfect practice.
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Disclaimer: All content on this channel is for education purposes only and does not constitute an investment recommendation or individual financial advice. For that, you should speak to a regulated, independent professional. The value of investments and the income from them can go down as well as up, so you may get back less than you invest. The views expressed on this channel may no longer be current. The information provided is not a personal recommendation for any particular investment. Tax treatment depends on individual circumstances and all tax rules may change in the future. If you are unsure about the suitability of an investment, you should speak to a regulated, independent professional. Investment figures quoted refer to simulated past performance and that past performance is not a reliable indicator of future results/performance.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Dr James (01:15):
We're back this month for another finance bulletin
with regular podcaster, Mr.
Kevin Saunders, Kevin is anexpert in all things finance and
borrowing for Dentists up anddown the UK.
Today we're going to talk aboutwhat in preference and what we
need to know when it comes tomaking our next borrowing
decision.
And also specificallydiscussing the finance and why
there's been a little bit of aresurgence in terms of tax
(01:38):
finance experts out there.
Looking forward to talkingabout all of the things and more
in today's episode.
As ever, you can tame your CPDto this episode within the
official Dentists Who InvestSmart Money Members Club.
Smart Money Members Club alsoincludes multiple mini courses
and webinar series on financefor dentists, including how to
become as tax-efficient aspossible, as well as
(01:58):
understanding investing.
All of this content coins asverifiable CPD, and you can
download your certificates thereand then on completing each
lesson.
In addition to this, we alsoinclude a whopping 10% discount
on your dental identity and 5%discount on lab bills for dental
principles, amongst other partsand discounts for members.
Please use the link in thedescription to claim your
(02:20):
verifiable CPD for this episode.
Now then, Kevin, from your faceand dentist investors podcast,
back to talk about finance onceagain and all the things that we
said on the tin in the intro tothis podcast and more.
But before we talk about that,I just want to say that it was
really fun to have you along toour event uh the other weekend,
(02:41):
uh Biz of Dentistry, uh, whichwas really cool.
And there was certainly a greatturnout, which is amazing.
So, yeah, fun to have youthere.
Maybe we'll get you on thestage next time.
Kevin (02:52):
Hi, James.
Yeah, no, it was a great event,actually.
Um, so different from thebigger shows, which I think some
of which have lost their way alittle bit and are a bit stale.
It was just nice to get so manypeople in the room that could
give advice to dentists, andalso the dentists to be able to
come around and talk to us andand not feel intimidated by
talking to us.
The stands were tables ratherthan stands.
(03:14):
So it felt more intimate, iswhat I'm trying to say.
And I think um I think thedentist got a lot out of that.
Dr James (03:20):
There we go.
Well, we're definitely tryingto bring the energy and bring
fun uh and mix it up a littlebit and not talk about clinical
stuff because that's what everyother event under the sun does.
So we want to talk about thebusiness side of dentistry and
how it can be ethical uh andhave great businesses too.
And actually, those two thingscan be exactly the same thing
when you know how.
So, yeah, definitely a littlebit of a different flavor on it.
(03:41):
And actually, on that note,we're gonna bring in even more
of a different flavor still withthe next event, which is coming
up in November, which is theentrepreneurs den where we'll be
having exactly the same stuffthat everybody knows and loves
about the events that wecurrently run.
Plus, on top of that, we'regonna have dental startups,
dental industry startups, youngentrepreneurs, uh well, not
(04:04):
specifically young, any age ofentrepreneurs who run and have
set up these businesses, theseyou these new businesses, uh,
and they're gonna be pitching toa live audience of a ton of
dentists uh who will be able towitness all the thrills and
spills of Dragons Den, crosswith X Factor as well, actually,
I should mention, uh, all atthe same time, and some dragons
(04:25):
there who are gonna really grillthem on the viability of their
business.
So, looking forward to thatone.
We're definitely gonna make atheatrical event out of it and
have some fun with it, andthat's gonna be really cool.
So, yeah, coming up inNovember, but yeah, back to what
we were talking about initiallyon this podcast, and certainly
the aim of the game and the nameof this podcast, which is to
talk about finance specifically.
And maybe a good place to beginwould be on the front of the uh
(04:50):
well of interest rates, Kevin,because from what I understand,
the Bank of England recentlyheld interest rates.
Kevin (04:57):
Yes, uh, I went back actually and listened to the
podcast we did in February, um,which feels like a completely
different world now.
Um back then I mentioned thatwe'd had four cuts in 2025 and
two cuts to interest rates in2024, to you know, to the base
rate specifically.
Um and it looked like we weregonna get a further cut this
(05:20):
year.
Um since then, because of theuh uh matters happening around
the world, everything's changed.
Um I've sat in on a lot ofchief economist briefs from the
banks recently, and they're allsaying the same thing.
Um, no matter what the scenarioand what happens in the Middle
East, the Bank of England, allof their um forecasts offer rate
(05:41):
rises now.
So it seems to be a question ofare we gonna get one or three
rate rises?
Um and they're talking about uhthat happening by mid-2027.
It almost feels like the phonywar at the moment, feels like
the calm before the stormbecause they're holding the
interest rates, and we can onlyhope that if if matters can
(06:02):
settle down, um then maybe itwould be one rate rise, and that
wouldn't be too bad after all.
Um but anyway, yeah, that'swhere we stand at the moment.
Dr James (06:12):
Even as far ahead as 2027, they're predicting that
rates might rise.
Surely so much can change sincethen.
Kevin (06:19):
Well it can, and as you've seen from February,
things have really changed inthe last few months.
But at the moment, if nothingchanges, depends on how long
things drag on in the MiddleEast uh with Iran.
Um, but there could be threerate rises by mid-2027, or it
could just be one.
If things are sorted outquickly, you're more likely to
just have one rate rate rise.
But these are just forecasts,as we always say, nobody knows,
(06:42):
crystal ball territory.
Um, and let's hope for a goodoutcome on this.
Dr James (06:47):
Yeah, indeed.
And for those who don't know,the main reason the Bank of
England, well, one of the mainreasons Bank of England do this
is to tame the inflation base.
So that's definitely a bigfactor which determines what
their next move is.
And inflation is it's it's it'skind of stubborn, but it is
lower than what it was uh inyears gone by.
(07:08):
So certainly they look for thatto start to decrease a little
bit before they might thinkabout uh rate uh decreases,
certainly uh reducing the uhinterest reducing interest rates
for sure.
Uh so they're definitelywatching that one avidly.
So it's it's always good towatch this space as ever.
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Kevin (09:21):
Because who would have thought that oil prices would
affect clothes manufacturers andpretty much everything in life
seems to be um affected by this?
So um, so yeah, inflation isexpected to rise, hence so are
so is the base rate.
Dr James (09:36):
There we go.
And let's bring that back todentistry.
Kevin, what does that mean forus on our borrowing?
What should what should eachdemographic of dentists should
be be what should they belooking out for?
Or is it just blanket uh kindof uh not advice, we don't like
that word because we don't wantto cross that line, but
certainly blanket things that weshould be aware of?
(09:56):
Or how does that look?
What are you saying to yourclients?
Kevin (09:59):
Yeah, uh, and the reason for doing this now is is we were
saying, we're in choppy waters,we don't know what's gonna
happen going forwards in termsof rate rises.
So why not consider refinance?
Anyone that's got any existingfinance should really be looking
at it.
Um so who are those people andwho should be considering that?
Anyone that took a loan out,and and I'm gonna give you two
(10:20):
events makes it easier than juststating years here.
Anyone who took a loan outbetween, say, the credit crunch
and COVID, which is roughly sortof 2008 to 2020, were probably
paying a higher margin with thebank.
Uh so whatever base rate wasdoing, their margin's probably
three and a half percent overbase.
That's a ballpark figure, itcould be either way, uh either
(10:42):
side of that.
Um but rates are much lowernow, or the margin's much lower.
So um anyone in that bracketshould have a look at this.
Um anyone who's set a practiceup over the last 10 years or so,
and maybe was paying four and ahalf percent over base, has now
got an established practice, sowe can jump back in and get it
(11:02):
valued, it's got a good rulevalue, and we can we can put
them at a lower rate.
Um alone with a lower rate,rather.
Um so anyone that has too muchshort-term finance, uh and you
know, short-term finance isgreat, you need it for
equipment, etc.
Sometimes it's too easy toobtain, and people pretend to
take too much of it um and havehigh monthly payments.
(11:24):
So we're you know, we'rehelping quite a few people at
the moment lift all of that debtand put it onto the midterm,
and by that I mean a sort of 15to 20 year loans.
Um and that brings repaymentsdown massively, and it can make
thousands of pounds a differencea month in some cases.
So that's that's definitely oneto look at.
Um anyone who is relocating,extending their practice,
(11:47):
getting out surgeries, expandingbuying further practices.
What we tend to do now issomeone approaches approaches us
for finance um for whatever thereason, we'll automatically
look at any existing finance andlook and see if if refinance is
an option on that as well.
Um sorry, Julian, what you weregonna say?
Dr James (12:11):
No, no, I thought you were finished as well and
listening.
Kevin (12:14):
So obviously against that we um we look at the cost of
refinance because obviously whatwe don't want to do is lead a
client down a path that turnsout to be horrendously
expensive.
So there are fees to considersuch as valuation and legal
fees, early um early repaymentcharges on fixed rates, or
(12:35):
sometimes just variable rateloans have them inside the
legacy loans.
Um so we need to price all thatin as well, which is what we do
with clients.
And if it's not to theiradvantage, we wouldn't take a
client down that route.
Um but you know the banks havevarious products out there uh
that can help with this.
Some banks have products withno facility fees, um, some banks
(12:58):
have products with novaluational security fees.
Literally, it's just anunsecured loan.
The rate is cheaper than it wasback in the day.
All the client will need to dois put the facility fee on the
loan and make sure they've got alife policy to cover the debt.
Um on top of that, we'vementioned before we've got these
um loans with a larger amountof it on interest only and a
(13:21):
smaller amount repaying over ashort period of say five years,
and that allows us to get areally cheap rate on those loans
in ballpark, about 1.5% overbase rate.
So um that can outweigh some ofthe upfront costs sometimes in
refinance.
Um so the other thing toconsider is um interest rate
(13:44):
versus turbo.
Uh and again, we've mentionedthat the banks have have
released lots of new productsrecently, um and one of which is
an extension to goodwill loansto 20 years.
Uh so if the rate goes upslightly, sometimes it's still
better to do that because themonthly payment is lower and
it's all about cash flow.
So, for example, if you took500,000 at let's say an all-in
(14:07):
rate, base rate and a margin ofsix percent over the standard 15
years, your monthly cost is4,29.
If the bank added half apercent onto that and turned it
over 20 years, then there's amonthly saving of about 500
pounds a month.
Um, and to my mind, that'sbetter steered towards
overpaying your mortgage, yourresidential mortgage.
(14:30):
Um so and I had a conversationwith a client about that this
morning, and basically said, youknow, your plan going forward
now should be to um to repayyour residential mortgage
because there's no tax relief onthe interest on mortgages.
So if we can get the commercialdebt as low as possible and
then steer the money intorepaying the personal debt.
Dr James (14:52):
Nice, that's some wizardry right there.
Kevin (14:57):
Yeah.
Dr James (14:58):
It's all about thinking about the strategy, I
guess, really.
Okay, cool.
So these are I mean, this isit's like all of these things.
There's always so much.
I always think to this tomyself whenever you talk about
finance, I'm like, man, there'sso much depth to it, and it's
why I guess it can make sense toget a pair of eyes on it.
Not just someone who's justgonna, I guess, uh flog you a
(15:18):
product per se, but also justhave a conversation with you
about like what your plans arelong term and even even
revisiting these sorts ofthings, because it's free to
ask, right?
Kevin (15:28):
Oh, definitely, yeah.
But I mean we can overview thisfor clients and feedback to
them.
As I said earlier, we're notafraid to tell clients actually
you're better off just leavingyour finance as it is.
It's all about how it'sstructured and um and feeding
back a range of options.
So we'll feed everything backto the client and they can make
a decision.
I mean, and and as I saidbefore, the banks are lending in
(15:49):
very different ways.
So often will be three or fourdifferent options as to how we
could possibly structure this asdifferent terms, uh different
products.
There's no right or wronganswers to here, but at the end
of it, if you can reduce yourmonthly payments and steer that
money into building yourpersonal wealth, then that can't
be a bad thing.
Dr James (16:10):
Understood.
And is it as simple as interestrates go up, therefore finance
rates go up as well, or notreally?
Kevin (16:21):
Well, guess if you've got a fixed rate, then you're fine.
Um anyone on the variablerates, if the base rate goes up,
then yes, the monthly cost ofborrowing will go up with it as
well.
Uh but yeah, let's put that inperspective because rates have
reduced quite a long way fromwhere they were at the start of
2024.
As we said, we've had six ratecuts.
(16:43):
So if we had one or two now, itwouldn't be the end of the
world.
It's just always nice to have acheaper rate.
Dr James (16:49):
Nice.
And I know from a previouspodcast, people uh on this
podcast may have listened tothose, and we've got a whole
series of different podcaststhat talk about uh how can I say
this, uh, you know, all sortsof different factors in the
nuance of finance, you know, thedifference between the
difference between equipmentfinance, the difference between
(17:10):
practice finance, everythingalong those lines.
So shout out those episodes.
We definitely won't repeatourselves uh from those uh
today.
So, really what this episodeis, uh Kevin in a nutshell is a
bulletin to say basically, guys,here's the things you need to
be aware of, here's the thingsthat may have changed, and here
is what is out there by way ofnew products and everything
(17:32):
along those lines.
We've covered people who Iguess already have finance.
Kevin, but what aboutfirst-time buyers?
What would you be saying tothem at the minute?
Kevin (17:42):
Yeah, so before I answer that, I would just say what I
really want to encourage anyonewith existing finance to do is
just reach out and check theirfinance arrangements out.
Because so many people just sitthere with the finance they
took out 10 years ago, notrealizing that they could be
saving a lot of money.
Uh so I guess that was themotivation behind this podcast.
(18:03):
We know that um we're gonnahave inflation, rate rises, so
why not review existing debt?
Yeah.
Dr James (18:10):
Well, I say, and just to quickly touch on that, it's
like, okay, cool.
Uh if this, if obviously it'simpossible to predict, but um if
at present it looks likesomething's gonna rise, I guess
their interest rates are gonnarise, then I guess it could
represent an a window ofopportunity uh whilst they are
where they are to get thingsreviewed and then hopefully
locked in on a fixed rate, whichis much more favorable.
(18:32):
Um, or at the very least,depend no matter where that pans
out, or whether that go whetherthat goes up or down, you've
made some sort of meaningfulgame in the meantime because you
have uh already reduced yourrates.
So yeah, just something toconsider.
But yes, back to what we weresaying a second ago, first-time
buyers.
Kevin (18:49):
Yeah, so first-time buyers, we're back to the
conversation we've hadpreviously, which is should you
wait for the cheapest rate?
And the answer is no, notreally, because um yeah, rates
go up and down.
If you agree if you startbuying a practice today because
the rates are low, by the timethe practice completes, which is
often nine months, rates mighthave gone up.
Uh, and they're gonna fluctuateand go up and down over the
(19:11):
term of the loan.
You're borrowing for 15 years,not for the next year.
Um, so while it's helpful forrates to be cheap when you first
buy, I don't think it's thereason not to buy right now.
Um, so first time buyers shoulddefinitely still look at buyer
practice if the right practicecomes up.
I think I mentioned in the lastpodcast that first time buyers
have gone a little bit quiet,but they seem to have come back
(19:34):
more now.
I think that they're realisingthere's no point waiting this
out.
It you know, the world carrieson, doesn't it?
Um and you and I have said ifthere's a good business
opportunity there to buy a greatpractice, then you shouldn't be
waiting for dose rate to godown to three percent.
Dr James (19:49):
Absolutely, 100%.
Kevin, thanks so much forsharing everything that you said
in the podcast today.
If anybody wants to reach outto you, get in touch off the
back of anything that we saidtoday, how are they best off
finding you?
Kevin (19:59):
Yeah, so um the best email address is info at
Soroma.uk.
Uh that one reaches both mycolleague Dan Fearan and I.
Um, or they can find us on ourwebpage, the Soroma Finance
webpage, or the mobile number is0780-144-0622.
We're back this month for another finance bulletin
with regular podcaster, Mr.
Kevin Saunders, Kevin is anexpert in all things finance and
borrowing for Dentists up anddown the UK.
Today we're going to talk aboutwhat in preference and what we
need to know when it comes tomaking our next borrowing
decision.
And also specificallydiscussing the finance and why
there's been a little bit of aresurgence in terms of tax
(01:38):
finance experts out there.
Looking forward to talkingabout all of the things and more
in today's episode.
As ever, you can tame your CPDto this episode within the
official Dentists Who InvestSmart Money Members Club.
Smart Money Members Club alsoincludes multiple mini courses
and webinar series on financefor dentists, including how to
become as tax-efficient aspossible, as well as
(01:58):
understanding investing.
All of this content coins asverifiable CPD, and you can
download your certificates thereand then on completing each
lesson.
In addition to this, we alsoinclude a whopping 10% discount
on your dental identity and 5%discount on lab bills for dental
principles, amongst other partsand discounts for members.
Please use the link in thedescription to claim your
(02:20):
verifiable CPD for this episode.
Now then, Kevin, from your faceand dentist investors podcast,
back to talk about finance onceagain and all the things that we
said on the tin in the intro tothis podcast and more.
But before we talk about that,I just want to say that it was
really fun to have you along toour event uh the other weekend,
(02:41):
uh Biz of Dentistry, uh, whichwas really cool.
And there was certainly a greatturnout, which is amazing.
So, yeah, fun to have youthere.
Maybe we'll get you on thestage next time.
Kevin (02:52):
Hi, James.
Yeah, no, it was a great event,actually.
Um, so different from thebigger shows, which I think some
of which have lost their way alittle bit and are a bit stale.
It was just nice to get so manypeople in the room that could
give advice to dentists, andalso the dentists to be able to
come around and talk to us andand not feel intimidated by
talking to us.
The stands were tables ratherthan stands.
(03:14):
So it felt more intimate, iswhat I'm trying to say.
And I think um I think thedentist got a lot out of that.
Dr James (03:20):
There we go.
Well, we're definitely tryingto bring the energy and bring
fun uh and mix it up a littlebit and not talk about clinical
stuff because that's what everyother event under the sun does.
So we want to talk about thebusiness side of dentistry and
how it can be ethical uh andhave great businesses too.
And actually, those two thingscan be exactly the same thing
when you know how.
So, yeah, definitely a littlebit of a different flavor on it.
(03:41):
And actually, on that note,we're gonna bring in even more
of a different flavor still withthe next event, which is coming
up in November, which is theentrepreneurs den where we'll be
having exactly the same stuffthat everybody knows and loves
about the events that wecurrently run.
Plus, on top of that, we'regonna have dental startups,
dental industry startups, youngentrepreneurs, uh well, not
(04:04):
specifically young, any age ofentrepreneurs who run and have
set up these businesses, theseyou these new businesses, uh,
and they're gonna be pitching toa live audience of a ton of
dentists uh who will be able towitness all the thrills and
spills of Dragons Den, crosswith X Factor as well, actually,
I should mention, uh, all atthe same time, and some dragons
(04:25):
there who are gonna really grillthem on the viability of their
business.
So, looking forward to thatone.
We're definitely gonna make atheatrical event out of it and
have some fun with it, andthat's gonna be really cool.
So, yeah, coming up inNovember, but yeah, back to what
we were talking about initiallyon this podcast, and certainly
the aim of the game and the nameof this podcast, which is to
talk about finance specifically.
And maybe a good place to beginwould be on the front of the uh
(04:50):
well of interest rates, Kevin,because from what I understand,
the Bank of England recentlyheld interest rates.
Kevin (04:57):
Yes, uh, I went back actually and listened to the
podcast we did in February, um,which feels like a completely
different world now.
Um back then I mentioned thatwe'd had four cuts in 2025 and
two cuts to interest rates in2024, to you know, to the base
rate specifically.
Um and it looked like we weregonna get a further cut this
(05:20):
year.
Um since then, because of theuh uh matters happening around
the world, everything's changed.
Um I've sat in on a lot ofchief economist briefs from the
banks recently, and they're allsaying the same thing.
Um, no matter what the scenarioand what happens in the Middle
East, the Bank of England, allof their um forecasts offer rate
(05:41):
rises now.
So it seems to be a question ofare we gonna get one or three
rate rises?
Um and they're talking about uhthat happening by mid-2027.
It almost feels like the phonywar at the moment, feels like
the calm before the stormbecause they're holding the
interest rates, and we can onlyhope that if if matters can
(06:02):
settle down, um then maybe itwould be one rate rise, and that
wouldn't be too bad after all.
Um but anyway, yeah, that'swhere we stand at the moment.
Dr James (06:12):
Even as far ahead as 2027, they're predicting that
rates might rise.
Surely so much can change sincethen.
Kevin (06:19):
Well it can, and as you've seen from February,
things have really changed inthe last few months.
But at the moment, if nothingchanges, depends on how long
things drag on in the MiddleEast uh with Iran.
Um, but there could be threerate rises by mid-2027, or it
could just be one.
If things are sorted outquickly, you're more likely to
just have one rate rate rise.
But these are just forecasts,as we always say, nobody knows,
(06:42):
crystal ball territory.
Um, and let's hope for a goodoutcome on this.
Dr James (06:47):
Yeah, indeed.
And for those who don't know,the main reason the Bank of
England, well, one of the mainreasons Bank of England do this
is to tame the inflation base.
So that's definitely a bigfactor which determines what
their next move is.
And inflation is it's it's it'skind of stubborn, but it is
lower than what it was uh inyears gone by.
(07:08):
So certainly they look for thatto start to decrease a little
bit before they might thinkabout uh rate uh decreases,
certainly uh reducing the uhinterest reducing interest rates
for sure.
Uh so they're definitelywatching that one avidly.
So it's it's always good towatch this space as ever.
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Kevin (09:21):
Because who would have thought that oil prices would
affect clothes manufacturers andpretty much everything in life
seems to be um affected by this?
So um, so yeah, inflation isexpected to rise, hence so are
so is the base rate.
Dr James (09:36):
There we go.
And let's bring that back todentistry.
Kevin, what does that mean forus on our borrowing?
What should what should eachdemographic of dentists should
be be what should they belooking out for?
Or is it just blanket uh kindof uh not advice, we don't like
that word because we don't wantto cross that line, but
certainly blanket things that weshould be aware of?
(09:56):
Or how does that look?
What are you saying to yourclients?
Kevin (09:59):
Yeah, uh, and the reason for doing this now is is we were
saying, we're in choppy waters,we don't know what's gonna
happen going forwards in termsof rate rises.
So why not consider refinance?
Anyone that's got any existingfinance should really be looking
at it.
Um so who are those people andwho should be considering that?
Anyone that took a loan out,and and I'm gonna give you two
(10:20):
events makes it easier than juststating years here.
Anyone who took a loan outbetween, say, the credit crunch
and COVID, which is roughly sortof 2008 to 2020, were probably
paying a higher margin with thebank.
Uh so whatever base rate wasdoing, their margin's probably
three and a half percent overbase.
That's a ballpark figure, itcould be either way, uh either
(10:42):
side of that.
Um but rates are much lowernow, or the margin's much lower.
So um anyone in that bracketshould have a look at this.
Um anyone who's set a practiceup over the last 10 years or so,
and maybe was paying four and ahalf percent over base, has now
got an established practice, sowe can jump back in and get it
(11:02):
valued, it's got a good rulevalue, and we can we can put
them at a lower rate.
Um alone with a lower rate,rather.
Um so anyone that has too muchshort-term finance, uh and you
know, short-term finance isgreat, you need it for
equipment, etc.
Sometimes it's too easy toobtain, and people pretend to
take too much of it um and havehigh monthly payments.
(11:24):
So we're you know, we'rehelping quite a few people at
the moment lift all of that debtand put it onto the midterm,
and by that I mean a sort of 15to 20 year loans.
Um and that brings repaymentsdown massively, and it can make
thousands of pounds a differencea month in some cases.
So that's that's definitely oneto look at.
Um anyone who is relocating,extending their practice,
(11:47):
getting out surgeries, expandingbuying further practices.
What we tend to do now issomeone approaches approaches us
for finance um for whatever thereason, we'll automatically
look at any existing finance andlook and see if if refinance is
an option on that as well.
Um sorry, Julian, what you weregonna say?
Dr James (12:11):
No, no, I thought you were finished as well and
listening.
Kevin (12:14):
So obviously against that we um we look at the cost of
refinance because obviously whatwe don't want to do is lead a
client down a path that turnsout to be horrendously
expensive.
So there are fees to considersuch as valuation and legal
fees, early um early repaymentcharges on fixed rates, or
(12:35):
sometimes just variable rateloans have them inside the
legacy loans.
Um so we need to price all thatin as well, which is what we do
with clients.
And if it's not to theiradvantage, we wouldn't take a
client down that route.
Um but you know the banks havevarious products out there uh
that can help with this.
Some banks have products withno facility fees, um, some banks
(12:58):
have products with novaluational security fees.
Literally, it's just anunsecured loan.
The rate is cheaper than it wasback in the day.
All the client will need to dois put the facility fee on the
loan and make sure they've got alife policy to cover the debt.
Um on top of that, we'vementioned before we've got these
um loans with a larger amountof it on interest only and a
(13:21):
smaller amount repaying over ashort period of say five years,
and that allows us to get areally cheap rate on those loans
in ballpark, about 1.5% overbase rate.
So um that can outweigh some ofthe upfront costs sometimes in
refinance.
Um so the other thing toconsider is um interest rate
(13:44):
versus turbo.
Uh and again, we've mentionedthat the banks have have
released lots of new productsrecently, um and one of which is
an extension to goodwill loansto 20 years.
Uh so if the rate goes upslightly, sometimes it's still
better to do that because themonthly payment is lower and
it's all about cash flow.
So, for example, if you took500,000 at let's say an all-in
(14:07):
rate, base rate and a margin ofsix percent over the standard 15
years, your monthly cost is4,29.
If the bank added half apercent onto that and turned it
over 20 years, then there's amonthly saving of about 500
pounds a month.
Um, and to my mind, that'sbetter steered towards
overpaying your mortgage, yourresidential mortgage.
(14:30):
Um so and I had a conversationwith a client about that this
morning, and basically said, youknow, your plan going forward
now should be to um to repayyour residential mortgage
because there's no tax relief onthe interest on mortgages.
So if we can get the commercialdebt as low as possible and
then steer the money intorepaying the personal debt.
Dr James (14:52):
Nice, that's some wizardry right there.
Kevin (14:57):
Yeah.
Dr James (14:58):
It's all about thinking about the strategy, I
guess, really.
Okay, cool.
So these are I mean, this isit's like all of these things.
There's always so much.
I always think to this tomyself whenever you talk about
finance, I'm like, man, there'sso much depth to it, and it's
why I guess it can make sense toget a pair of eyes on it.
Not just someone who's justgonna, I guess, uh flog you a
(15:18):
product per se, but also justhave a conversation with you
about like what your plans arelong term and even even
revisiting these sorts ofthings, because it's free to
ask, right?
Kevin (15:28):
Oh, definitely, yeah.
But I mean we can overview thisfor clients and feedback to
them.
As I said earlier, we're notafraid to tell clients actually
you're better off just leavingyour finance as it is.
It's all about how it'sstructured and um and feeding
back a range of options.
So we'll feed everything backto the client and they can make
a decision.
I mean, and and as I saidbefore, the banks are lending in
(15:49):
very different ways.
So often will be three or fourdifferent options as to how we
could possibly structure this asdifferent terms, uh different
products.
There's no right or wronganswers to here, but at the end
of it, if you can reduce yourmonthly payments and steer that
money into building yourpersonal wealth, then that can't
be a bad thing.
Dr James (16:10):
Understood.
And is it as simple as interestrates go up, therefore finance
rates go up as well, or notreally?
Kevin (16:21):
Well, guess if you've got a fixed rate, then you're fine.
Um anyone on the variablerates, if the base rate goes up,
then yes, the monthly cost ofborrowing will go up with it as
well.
Uh but yeah, let's put that inperspective because rates have
reduced quite a long way fromwhere they were at the start of
2024.
As we said, we've had six ratecuts.
(16:43):
So if we had one or two now, itwouldn't be the end of the
world.
It's just always nice to have acheaper rate.
Dr James (16:49):
Nice.
And I know from a previouspodcast, people uh on this
podcast may have listened tothose, and we've got a whole
series of different podcaststhat talk about uh how can I say
this, uh, you know, all sortsof different factors in the
nuance of finance, you know, thedifference between the
difference between equipmentfinance, the difference between
(17:10):
practice finance, everythingalong those lines.
So shout out those episodes.
We definitely won't repeatourselves uh from those uh
today.
So, really what this episodeis, uh Kevin in a nutshell is a
bulletin to say basically, guys,here's the things you need to
be aware of, here's the thingsthat may have changed, and here
is what is out there by way ofnew products and everything
(17:32):
along those lines.
We've covered people who Iguess already have finance.
Kevin, but what aboutfirst-time buyers?
What would you be saying tothem at the minute?
Kevin (17:42):
Yeah, so before I answer that, I would just say what I
really want to encourage anyonewith existing finance to do is
just reach out and check theirfinance arrangements out.
Because so many people just sitthere with the finance they
took out 10 years ago, notrealizing that they could be
saving a lot of money.
Uh so I guess that was themotivation behind this podcast.
(18:03):
We know that um we're gonnahave inflation, rate rises, so
why not review existing debt?
Yeah.
Dr James (18:10):
Well, I say, and just to quickly touch on that, it's
like, okay, cool.
Uh if this, if obviously it'simpossible to predict, but um if
at present it looks likesomething's gonna rise, I guess
their interest rates are gonnarise, then I guess it could
represent an a window ofopportunity uh whilst they are
where they are to get thingsreviewed and then hopefully
locked in on a fixed rate, whichis much more favorable.
(18:32):
Um, or at the very least,depend no matter where that pans
out, or whether that go whetherthat goes up or down, you've
made some sort of meaningfulgame in the meantime because you
have uh already reduced yourrates.
So yeah, just something toconsider.
But yes, back to what we weresaying a second ago, first-time
buyers.
Kevin (18:49):
Yeah, so first-time buyers, we're back to the
conversation we've hadpreviously, which is should you
wait for the cheapest rate?
And the answer is no, notreally, because um yeah, rates
go up and down.
If you agree if you startbuying a practice today because
the rates are low, by the timethe practice completes, which is
often nine months, rates mighthave gone up.
Uh, and they're gonna fluctuateand go up and down over the
(19:11):
term of the loan.
You're borrowing for 15 years,not for the next year.
Um, so while it's helpful forrates to be cheap when you first
buy, I don't think it's thereason not to buy right now.
Um, so first time buyers shoulddefinitely still look at buyer
practice if the right practicecomes up.
I think I mentioned in the lastpodcast that first time buyers
have gone a little bit quiet,but they seem to have come back
(19:34):
more now.
I think that they're realisingthere's no point waiting this
out.
It you know, the world carrieson, doesn't it?
Um and you and I have said ifthere's a good business
opportunity there to buy a greatpractice, then you shouldn't be
waiting for dose rate to godown to three percent.
Dr James (19:49):
Absolutely, 100%.
Kevin, thanks so much forsharing everything that you said
in the podcast today.
If anybody wants to reach outto you, get in touch off the
back of anything that we saidtoday, how are they best off
finding you?
Kevin (19:59):
Yeah, so um the best email address is info at
Soroma.uk.
Uh that one reaches both mycolleague Dan Fearan and I.
Um, or they can find us on ourwebpage, the Soroma Finance
webpage, or the mobile number is0780-144-0622.
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