Why a Korean clinic opening plan must connect quotations, funding, and debt service
A clinic or hospital opening budget is broader than a lease deposit, fit-out contract, and headline equipment price.
Design changes, electrical and plumbing work, shielding, furniture, information systems, professional support, financing costs, pre-opening recruitment, training, and launch marketing can fall due on different dates.
A project may therefore finish construction and still run short of cash before patient revenue stabilizes if rent, payroll, owner living needs, and early loan payments were omitted.
This Korea-specific calculator first reconciles capital uses with owner equity, confirmed non-repayable support, a facility loan, and a working-capital loan.
It then builds monthly amortization schedules, adds scheduled payments to the opening reserve, and tests cash after peak debt service under base and downside assumptions.
Increasing debt raises available funding, but it also raises the debt-service reserve and future operating burden, so the net effect is not simply principal-for-principal.
Questions the calculator is designed to answer
- What is the total capital requirement after quoted opening costs, contingency, and a cash reserve
- Do owner equity, confirmed support, and the two loan principals leave a funding gap or surplus
- How much does monthly debt service step up after an interest-only grace period ends
- How much monthly cash remains after variable cost, fixed operating cost, owner draw, and peak debt service
- Does the plan still hold under simultaneous revenue, fixed-cost, interest-rate, and project-overrun shocks
Use actual Korean quotations, not the illustrative defaults as market averages
Every default amount is a fictional KRW example provided to demonstrate the mechanics.
It is not a 2026 national average, a specialty benchmark, a recommended clinic budget, or evidence of a likely loan rate.
Required cash can change materially with floor area, power upgrades, drainage, radiation shielding, infection-control layout, inpatient or operating rooms, equipment specification, VAT treatment, and the division of work between landlord and tenant.
Normalize all quotations to the same VAT basis and record deposits, progress payments, final payments, lease prepayments, and anticipated loan-execution dates.
Replace the sample revenue and cost assumptions with a separate operating plan grounded in planned hours, capacity, staffing, reimbursement, non-covered services, consumables, and a realistic launch ramp.
Clinic opening input groups and the evidence to review| Input group | Included scope | Evidence to review first | Unit |
|---|
| Premises | Deposit, design, fit-out, building services, shielding | Lease, drawings, and trade-by-trade quotations | KRW |
| Equipment | Medical equipment deposits, furniture, signage, IT, security | Vendor quote, lease schedule, and delivery plan | KRW |
| Opening work | Professional, consulting, financing, recruitment, marketing | Service contracts, hiring plan, and lender proposal | KRW |
| Operating reserve | Fixed cost, owner draw, and actual early debt service | Monthly plan, household cash plan, amortization schedules | KRW/month |
| Funding sources | Available equity, confirmed grants, loan principals | Balance evidence, approval letter, and draft facility | KRW |
| Operations | Stabilized revenue, variable-cost rate, downside shocks | Capacity, fee, staffing, and consumables model | KRW/month, % |
What belongs in the opening capital requirement
Initial uses of cash
The opening-cost subtotal adds nine inputs: lease deposit; design, fit-out, and services; medical equipment; non-medical equipment; permitting and professional support; financing incidentals; pre-opening payroll; launch marketing; and other opening cost.
These categories are cash-planning buckets and do not determine accounting capitalization, deductibility, depreciation, or VAT recovery.
Editable contingency
Contingency is applied to the project-cost subtotal after excluding the lease deposit.
The percentage is deliberately editable because it is neither a statutory rate nor a universal recommendation.
Set it with reference to quotation maturity, design completion, site-condition uncertainty, equipment interfaces, and contractual change-control terms.
Fixed-cost and living reserve
The basic reserve multiplies monthly fixed operating cost plus the owner living draw by the selected reserve months.
Separating household cash needs avoids disguising personal withdrawals as unexplained business leakage during the launch period.
Scheduled debt-service reserve
The model adds the actual payments due on both loan schedules during the reserve period.
Interest-only payments remain real cash outflows, and principal payments are included as soon as each grace period ends.
Capital formulas
Contingency = opening cost excluding deposit × contingency rate
Basic reserve = (monthly fixed cost + owner living draw) × reserve months
Total reserve = basic reserve + scheduled loan payments during reserve months
Total required capital = opening-cost subtotal + contingency + total reserve
Total funding = equity + confirmed non-repayable support + both loan principals
Funding balance = total funding − total required capital
How the two loan schedules work
The facility-loan and working-capital-loan slots each accept principal, nominal annual rate, total term, interest-only grace months, and either equal-payment or equal-principal amortization.
Monthly interest uses the annual rate divided by 12, amounts are rounded to whole won each month, and the final installment settles the remaining principal.
A zero-principal slot contributes neither funding nor debt service.
Equal-payment method
After grace, the scheduled principal-and-interest payment is approximately level.
At a zero rate it is principal divided by amortizing months; at a positive rate the standard annuity formula is used.
Interest falls and the principal component rises as the outstanding balance declines.
Equal-principal method
The same principal amount is repaid in each amortizing month, subject to final rounding.
The first post-grace payment is normally the largest because interest is charged on the highest balance, and later payments decline.
Schedule formulas
Monthly rate r = nominal annual rate ÷ 100 ÷ 12
Grace payment = opening balance × r
Equal payment = P × r × (1+r)^n ÷ ((1+r)^n − 1)
Equal principal = P ÷ n, plus interest on the opening balance
The output separates first-month payment, first amortizing payment, peak monthly payment, first-year debt service, total interest, and total repayment.
It does not model a floating-rate reset calendar, late charges, prepayment, refinancing, extension, fees embedded in principal, or lender-specific day-count conventions.
Why the grace-period step-up deserves its own review
An interest-only first payment can make a debt package appear comfortable even though the cash obligation changes sharply after opening.
If the facility loan has six grace months and the working-capital loan has three, the combined schedule can step up twice while the clinic is still building its patient base.
The calculator therefore uses peak combined monthly debt service, not the first payment, in operating coverage and break-even calculations.
Questions to put beside each lender proposal
- Whether the quoted rate is fixed or floating and when the first reset occurs
- Which spending qualifies as facility or working capital and what evidence is required
- Whether guarantee, appraisal, registration, stamp, advisory, or account fees are paid before execution
- Whether grace is interest-only, payment-deferred, or subject to another structure
- How prepayment, covenant review, additional borrowing, and maturity extension are handled
Operating cash, internal coverage, and break-even revenue
Monthly gross contribution equals stabilized revenue after the revenue-linked variable-cost rate.
Cash before debt service subtracts fixed operating cost and the owner living draw, while cash after debt service also subtracts peak combined monthly payment.
The internal coverage ratio divides cash before debt service by that peak payment.
Operating formulas
Gross contribution = monthly revenue × (1 − variable-cost rate)
Cash before debt = gross contribution − fixed cost − owner draw
Cash after debt = cash before debt − peak monthly debt service
Internal coverage = cash before debt ÷ peak monthly debt service
Revenue break-even = (fixed cost + owner draw + peak debt service) ÷ (1 − variable-cost rate)
The ratio is unavailable when there is no debt, and a finite break-even cannot be calculated when variable cost equals 100% of revenue.
This is not a lender’s DSCR, underwriting threshold, or safety recommendation.
Taxes, National Health Insurance claim timing, receivables, depreciation, existing personal debt, replacement capital, and additional borrowing may change the decision materially.
Step-by-step workflow
- Select the planned institution level. Use the clinic-level or hospital-level note as a review prompt, not as a legal classification
- Normalize the cash quotations. Align VAT treatment, contract deposits, progress claims, final payments, lease prepayments, and expected execution dates
- Build the launch reserve. Enter fixed operating cost, owner living needs, and a conservative number of months before cash generation is dependable
- Enter only confirmed funding. Use genuinely available equity, approved non-repayable support, and loan assumptions supported by current proposals
- Copy each loan structure accurately. Compare the first payment with the first amortizing payment, peak payment, first-year service, and total interest
- Test stabilized operations. Derive revenue from capacity and fees, avoid double-counting variable and fixed costs, and review cash after debt
- Run all downside inputs together. Record whether more equity, a smaller scope, staged equipment, or a longer launch reserve is needed
- Transfer the result to a dated cash schedule. Map contract payments, approvals, loan execution, hiring, opening, and claim receipts month by month
Worked KRW example
The fictional base case has KRW 100,000,000 of lease deposit and KRW 285,000,000 of other opening costs, producing a KRW 385,000,000 opening-cost subtotal.
A 10% contingency on cost excluding the deposit is KRW 28,500,000.
Monthly fixed operating cost is KRW 20,000,000, owner living draw is KRW 5,000,000, and the reserve period is six months.
The facility loan is KRW 300,000,000 at 5.5% for 84 months with six interest-only months and equal-payment amortization.
The working-capital loan is KRW 50,000,000 at 6.2% for 36 months with three interest-only months and equal-principal amortization.
Owner equity is KRW 250,000,000 and there is no confirmed non-repayable support.
Worked clinic opening capital and debt-service result| Result | Basis | Illustrative value |
|---|
| Opening costs plus contingency | KRW 385,000,000 + KRW 28,500,000 | KRW 413,500,000 |
| Six-month fixed and living reserve | (KRW 20m + KRW 5m) × 6 | KRW 150,000,000 |
| Debt service inside reserve | Actual combined months 1–6 | KRW 14,321,970 |
| Total required capital | Opening, contingency, and full reserve | KRW 577,821,970 |
| Total funding | KRW 250m equity + KRW 350m loans | KRW 600,000,000 |
| Base funding surplus | Funding less requirement | KRW 22,178,030 |
| Combined first / peak payment | Grace interest / later maximum | KRW 1,633,333 / 6,333,245 |
| First 12 months debt service | Monthly combined schedules | KRW 52,204,018 |
| Total interest on both loans | Full 84- and 36-month schedules | KRW 70,909,757 |
| Base cash after debt | KRW 20.5m before debt less peak payment | KRW 14,166,755 |
| Base internal coverage | KRW 20.5m ÷ KRW 6,333,245 | 3.236887× |
Do not turn the example into a benchmark
The example does not imply that KRW 577,821,970 is a normal opening requirement, that 5.5% or 6.2% is an available rate, or that KRW 70,000,000 is an attainable monthly revenue.
Every amount and operating assumption must be replaced with evidence specific to the site, specialty, opening entity, contracts, staffing, and financing proposal.
Combined downside example
The base operating case uses KRW 70,000,000 of stabilized monthly revenue and a 35% variable-cost rate.
The downside case cuts revenue by 20%, increases fixed operating cost by 10%, and adds 2.0 percentage points to both loan rates before rebuilding both amortization schedules.
These shocks are simultaneous deterministic assumptions, not probabilities or forecasts.
Base and downside operating cash comparison| Measure | Base | Combined downside |
|---|
| Monthly revenue | KRW 70,000,000 | KRW 56,000,000 |
| Monthly fixed operating cost | KRW 20,000,000 | KRW 22,000,000 |
| Peak monthly debt service | KRW 6,333,245 | KRW 6,697,056 |
| Cash after debt service | KRW 14,166,755 | KRW 2,702,944 |
| Internal coverage | 3.236887× | 1.403602× |
| Break-even revenue including debt | KRW 48,204,992.31 | KRW 51,841,624.62 |
Project overrun is tested against the contingency already funded
A 15% overrun on the KRW 285,000,000 contingency base is KRW 42,750,000.
The existing KRW 28,500,000 contingency absorbs part of that amount, so only the KRW 14,250,000 shortfall is added to the stress capital requirement.
Stress required capital becomes KRW 592,071,970, which remains within the illustrative KRW 600,000,000 funding pool but leaves little room for omitted or earlier-than-planned cash demands.
How to read the results in decision order
1. Reconcile the base funding gap
If a gap appears, first reconcile missing quotations, timing, actual owner equity, and confirmed approval status rather than increasing an unapproved loan assumption.
A displayed surplus is not fully disposable if tax, existing obligations, claim delays, or contract deposits outside the model still require cash.
2. Locate the grace-period step-up
A large gap between first payment and peak payment is a warning against evaluating the package from the opening month alone.
If amortization begins before realistic revenue stabilization, consider a larger reserve, a smaller scope, staged equipment, or a different structure for professional review.
3. Compare base and downside cash after debt
A positive base value is only a starting point.
The difference under simultaneous revenue, fixed-cost, and interest shocks shows how quickly operating error can consume the apparent cushion.
A negative downside result should prompt revisions to the ramp, hiring calendar, contracts, capital scope, and debt package rather than reliance on a generic target ratio.
4. Connect capital to the opening timetable
Reporting or permission, facility confirmation, equipment delivery, hiring, and payer receipts can shift the date when revenue begins.
Transfer the totals into a monthly schedule containing every deposit, progress payment, final payment, loan draw, hiring date, opening milestone, and first expected receipt.
Useful planning scenarios
Compare candidate sites
Save separate inputs for each site’s deposit, rent, fit-out scope, capacity, and revenue case.
Do not assume a higher headline revenue automatically offsets a larger fixed-cost base and more cash tied up in the deposit.
Stage optional equipment
Separate equipment required at opening from equipment that can be added after demand is evidenced.
When reducing equipment cost and debt, also revise any capacity or revenue assumption that depended on that equipment.
Compare financing proposals
Equal principal, equal payment, grace length, and term can produce different first-year cash needs and lifetime interest even at the same principal.
Put guarantee and security costs in the incidental-cost input and document permitted use, evidence, and reset terms beside each result.
Prepare professional reviews
Share categories, VAT basis, payment months, hiring dates, and sources of funds rather than only a grand total.
Korean design, legal, tax, labor, accounting, and finance professionals can then replace simplified assumptions with the actual sequence and obligations.
Korean opening-law boundary: clinic-level report versus hospital-level permission
The current Medical Service Act was checked on August 5, 2026 under law ID 001788 and MST 285327, with the reviewed version effective April 7, 2026.
Article 33 identifies eligible opening entities and separates the report route for a clinic, dental clinic, Korean medicine clinic, or midwifery clinic from the prior-review and provincial-permission route for hospital-level institutions.
Article 36 connects opening institutions to standards prescribed by the Ministry of Health and Welfare.
The current Enforcement Rule of the Medical Service Act was checked under law ID 007863 and MST 286963, with the reviewed version effective June 12, 2026.
Article 25 addresses the clinic-level opening report and supporting materials, including plan and qualification-related documentation, while Article 34 links to facility standards and specifications in attached Tables 3 and 4.
The calculator’s institution-level selector only changes this explanatory boundary; it does not determine institution type, eligible ownership, completeness of documents, facility compliance, or permission outcome.
Practical legal review before irreversible spending
- Confirm planned institution type, opening entity, and jurisdiction with the competent public health office
- Review building use, floor plan, structure, facility specifications, fire safety, accessibility, parking, and specialty-specific requirements
- Align lease conditions, fit-out milestones, equipment delivery, reporting or permission, staffing, and loan execution
- Recheck the law, subordinate rules, attached tables, notices, and local submission practice in force on the actual filing date
Commonly omitted costs and timing risks
- Building-use review, power capacity, drainage, fire systems, elevators, parking, shielding, and end-of-lease restoration
- Equipment freight, installation, inspection, consumables, maintenance, training, insurance, lease deposit, and prepayment
- Pre-opening rent, service charges, recruitment advertising, training payroll, employer social-insurance cost, and owner living needs
- Guarantee, appraisal, collateral registration, stamp, advisory, account, and prepayment costs connected with financing
- Tax, labor, legal, design, medical-waste, IT, cybersecurity, privacy, insurance, and renewal obligations
- National Health Insurance claim and receipt lag, card settlement, receivables, seasonality, and the patient-volume ramp
- VAT recovery, income or corporate tax, withholding, and depreciation questions requiring separate Korean tax and accounting review
Limitations and decision boundaries
This tool organizes user-entered evidence and assumptions.
It is not an opening-consulting engagement, feasibility opinion, credit assessment, loan brokerage service, investment recommendation, legal opinion, accounting treatment, or tax advice.
It provides no market-average opening cost, recommended equity percentage, approvable loan limit, target DSCR, patient forecast, or earnings forecast.
- Loan rates are treated as fixed nominal annual rates with no reset calendar, delinquency, refinancing, prepayment, or extension model
- Only two loan slots are available, so leases, rentals, cards, family borrowing, and existing debts require a separate schedule
- Revenue is one stabilized monthly assumption and does not forecast the opening ramp, payer lag, case mix, or monthly cohort behavior
- The downside is a fixed combination of four entered shocks and does not estimate probability, correlation, or worst-case loss
- Support means confirmed non-repayable funding only; pending support, guaranteed loans, and policy loans remain debt or uncertain funding
- The legal references were checked on August 5, 2026 and must be rechecked for the actual application date and jurisdiction
Frequently asked questions
How should I separate a facility loan from a working-capital loan?
Place fit-out and equipment spending that can be evidenced under the proposed facility agreement in the facility-loan plan. Use working capital for launch-period cash needs such as rent, payroll, and supplies, subject to the lender’s permitted-use and evidence rules. The labels in this calculator do not determine how a lender will classify an expense.
Should equipment leasing or rental be entered as loan principal?
A lease or rental is usually clearer when its deposit, prepayment, recurring payment, purchase option, and residual terms are scheduled separately. If you consolidate it into one of the two loan slots, verify that the amount counted as a funding source and the monthly payment counted as debt service describe the same obligation.
Is the lease deposit treated as an expense?
The model does not make an accounting classification. It includes the deposit as cash tied up at opening, excludes it from the contingency base, and does not estimate recovery, restoration cost, key money, or a separate deposit-backed loan.
Does the calculator estimate loan eligibility or an approval limit?
No. It amortizes the principal, rate, term, grace period, and repayment method you enter. It does not predict collateral value, guarantees, credit review, existing-debt treatment, covenants, underwriting ratios, or approval. Compare current offers through official disclosures and obtain a written proposal from each lender.
Does a high coverage ratio mean the plan is safe?
The displayed ratio is an internal planning measure: user-entered cash before debt service divided by peak scheduled monthly debt service. A lender may define DSCR with different income, tax, debt, and measurement-period rules. Claims settlement delays, existing debt, tax, and equipment replacement are also outside this simplified ratio.
Does selecting clinic-level or hospital-level change the financial result?
No. It changes only the legal-pathway note. Article 33 of the Medical Service Act distinguishes the reporting route for clinic-level institutions from the prior-review and provincial-permission route for hospital-level institutions. The model does not classify a planned institution or determine whether an opening is lawful.
Official sources and verification date
The legal status, identifiers, effective dates, and relevant provisions were checked through the Korean National Law Information Center on August 5, 2026.
No market loan rate is hard-coded; the Financial Services Commission source is used only to direct users to the Financial Supervisory Service comparison disclosure for current rate and repayment-condition review.
Recalculate with the quotations and loan proposals in front of you
Put every amount on the same tax and timing basis, and review the peak post-grace payment rather than only the first month.
Saving the base and downside cases gives designers, lenders, accountants, labor advisers, and legal professionals a clearer record of which assumption needs to change.