Startup capital for a new surgical facility has been getting harder to find for the last few years. Many lenders have left the healthcare market. And those that remain are extremely tightfisted with their money. But that doesn't mean that it's not worth looking for financing for your startup. You just need to look in different places. In a tight credit market, creativity pays off.

1. Get to know your local banker
The old days of several healthcare capital firms competing to lend you money are gone. Most of the capital from national commercial sources has dried up. So your best bet is your local bank. It may be a national bank, but your local branch banker is going to make the decision.

This is where a good relationship comes in. "Part of banking is objective and part of it is subjective," says Sandra Yeh, MD, an ophthalmologist and owner of the Prairie Eye Center in Springfield, Ill. Dr. Yeh is finishing a surgery center with 2 ORs and 1 procedure room that will open in late spring.

To build the center, Dr. Yeh secured a $1.6 million personal loan for construction and an $850,000 business loan for equipment. The loans came from the local bank where she does most of her banking business and where she's known the manager for 12 years, through a couple of buyouts when the branch changed owners and names.

If you don't have a relationship with a local bank, create one, says Dr. Yeh. "Pick a good bank and be its best customer." Open a checking and savings account. Do some investing with the bank, too. Banks treat their brokerage clients well, and in the process you'll get to know people at your local branch.

2. Develop a building
Owning the land and your surgical facility's building adds security to a development venture because you become your own landlord and you have an asset that becomes more valuable over time. "I encourage people to build their own building," says Dr. Yeh. "You're controlling your own destiny."

For Dr. Yeh, owning the land and building is a good strategy to hedge against reduced Medicare reimbursement. Regardless of the cuts, you'll still have rental income. Depending on the ownership structure, owning the building can pay off when it's time to cash out and retire, says Dr. Yeh.

Adding medical offices can also help you secure funding in markets where there is a demand, says Nat Bala, MD, a gastroenterologist in Houston, Texas. He's part of a group of physicians developing a 3-floor medical office building featuring a 2-OR, 3-procedure-room surgery center on the ground floor. As with offering a variety of specialties, having a mixed-use building is attractive to lenders because drawing from diverse sources of rent can help create income stability. Plus, once you pay it off, there's a steady stream of income, says Dr. Bala.

3. Put more skin in the game
One of the ironies of finance is that the more money you have, the easier it is to borrow. Investors who have more money to bring to the table are more likely to find a loan. In years past, investors brought 10% to 20% of the cost of the project to the deal. Now, it's more likely 30% to 40%, says Jay Klarsfeld, MD, an ENT surgeon who has developed medical office buildings and surgery centers in Connecticut. Exactly how much you'll need to bring to the deal depends on how many partners are in the investor group and whether the project is a collaboration with an ASC development company, a hospital or both.

Investors now have to bring more accountability to the deal as well. Just a few years ago, non-recourse loans, in which physician-investors weren't personally liable for the debt beyond the collateral, were common for surgery center development projects. That's no longer the case. "Be prepared to have personal guarantees," says Dr. Klarsfeld.

4. Find a partner
Physician-investors will need to raise, and borrow, less money if they partner with a hospital or development company. "They'll bring a piece," says Dr. Klarsfeld, who has partnered with hospitals in the past. Plus, says Dr. Klarsfeld, "the venture partner may have a relationship with a lender." Hospital systems have access to credit from local and national lenders that you may be able to leverage. Development firms often have strong relationships with lenders that they've worked with in the past. The drawback of partnering is that you're diluting your ownership and your share of the profits. If you don't have a venture partner, working with a management company to set up your center and run it for you can help you land a loan. The bank will like the fact that people with ASC management experience will launch the center, says Dr. Bala.

5. Plant seeds early
The more something is talked about, the more likely it is to become a reality. So it's important to sow the seeds of your project, and your eventual need for a loan, in the minds of the lending community. "Put the thought in the local bank's head as soon as possible," says David Fisher, MBA, CASC, administrative director of the Delaware Surgery Center in Dover, a center with 4 ORs and 2 procedure rooms that opened in September 2008.

As soon as the Delaware Surgery Center physician-investors realized that they'd outgrow their previous facility — 2 years before they actually applied for a loan — they told the local banker of their plans to create a larger center in a new medical building under development. When they asked for a loan, the banker was already familiar with the project and had a sense of the group's commitment. They got a loan for more than 50% of the startup costs needed for fitting out the ORs and administrative spaces and purchasing equipment, says Mr. Fisher.

Keep trying
Regardless of the lending climate, if you feel that you have a credible plan and a strong group of surgeons, follow through with your plans to develop a new facility. If the deal looks good and there's money to be made, a lender will get involved. "There's always money to be had," says Dr. Klarsfeld. "Business is business."