Health care rent is not like a commercial office rent. In addition to base rent, most commercial tenants pay some or all of the landlord’s operating expenses (“CAM Charges”). Yet medical tenants need to cope with the disposal of biomedical waste and have greater privacy concerns than many tenants.

Advantages:You pay less up-front cash. Because of mortgage down payments and closing costs, buying a space is more expensive at the outset; leasing leaves you with more start-up cash flow to put unto your practice. With leasing, there is also no risk of investment loss that comes with the ever-changing real estate market.

Medical uses usually violate the boilerplate use provisions in most retail and office leases. In addition to modifying the use provisions, landlords and tenants should consider the representations and warranties within the lease, together with the hours of operation. Patients are more likely than the general public to have special access needs. Buildings containing health care providers are more likely to receive ADA scrutiny.

Though, as a practical matter, the tenant’s use may trigger the need for ADA compliance, the tenant will want to avoid lease language obligating the tenant to pay any of the costs that the landlord incurs to bring the building into compliance with ADA. While medical tenants generally bear the responsibility for finishing the lease premises consistently with the ADA, tenants will want to consider excluding the general building ADA compliance charges from the list of expenses passed through to the tenant.

The medical factoring process is fairly simple. Once a factoring arrangement is established, your office sends its weekly receivables to the factoring company for immediate financing. The factoring company will calculate the actual amount paid by insurance companies (called the net collectibles) and advance you up to 80% of that amount.

Disadvantages: If the lease period is too long, you could be locked into an agreement for an office that no longer serves your purpose. Leasing never builds up equity.

It is common for office leases to contain provisions requiring the tenant to consent to a substitute premises should the landlord decide that it is in the landlord’s best interest to move the tenant from one suite in the building to another. Because of the specialized build-out needs of the medical tenant, medical tenants are more likely to resist these provisions.

Medical office factoring has some advantages over other financial products. The most important is that the financing is recurring and happens every time you invoice an insurance company. This makes it a cash on demand product. As opposed to loans and lines of credit, the factoring line has flexible limits. As a matter of fact, the limits are based on your ability to invoice, making it an ideal growth tool. Lastly, doctor office factoring is easy to qualify for and the personal credit of the practice owners is usually not involved in the financing decision.