By industry
Practice financing: acquisitions, buy-ins, and equipment for healthcare providers
Healthcare practices are among the most attractive small business credits in the market. That is worth knowing before you accept the first offer.
You are a preferred borrower, and you should act like it
Licensed healthcare practices have characteristics lenders love: high barriers to entry, recurring demand, insurance receivables from creditworthy payers, and owners with strong personal income. Several banks run dedicated healthcare practice lending groups, and some will lend 100% of an acquisition price to a qualified buyer.
The practical consequence is that you should be shopping and negotiating rather than gratefully accepting. Get at least two term sheets. Practice lending is competitive and lenders expect to compete.
The three common transactions
- Buying an existing practice
- Usually SBA 7(a) or a dedicated practice lender. Financing at or near 100% of the purchase price is genuinely available to a qualified buyer with strong credit and relevant experience — which is unusual in small business lending and reflects how well these credits perform.
- Partnership buy-in
- Buying into an existing group. Structurally similar, but the valuation method and the partnership agreement drive everything. Have a healthcare-specific attorney review the agreement before you finance it.
- De novo start-up
- Building a practice from scratch. Harder than an acquisition, but well-established: lenders will finance build-out, equipment, and working capital through a ramp period, often with interest-only payments for the first six to twelve months.
What underwriting focuses on
- Payer mix. Commercial insurance, Medicare, Medicaid, and cash-pay have very different collection profiles. Heavy Medicaid concentration will be questioned.
- Collections versus production. Production is what you billed; collections are what you got. Lenders care about the second and about the ratio between them.
- Provider dependence. A practice where the departing owner generated most of the production is a transition risk. Expect structure — an earn-out, a longer transition period, or a larger seller note.
- Your student debt. It sits in your personal debt-to-income calculation. It is rarely fatal for a practice acquisition, because lenders in this space see it constantly, but it affects sizing.
- Recall and active patient counts. For dental and veterinary especially, active patient numbers are the real asset being sold.
Questions people actually ask
Can I get 100% financing to buy a dental practice?
Frequently, yes. Practice acquisition lending at or near 100% of purchase price is genuinely available from dedicated healthcare lenders to buyers with strong credit and relevant experience. Working capital is often added on top.
Does my student loan debt stop me from buying a practice?
Usually not. Lenders in this space see six-figure student debt on nearly every file and underwrite around it, focusing on the practice's cash flow after your debt service. It affects how much you can borrow, not whether you can.
Should I use an SBA loan or a conventional practice lender?
Compare both. Conventional healthcare lenders can be faster and sometimes offer higher leverage; SBA offers longer terms and a fixed structure that can produce a lower payment. On a practice acquisition the answer depends on the specific numbers, which is exactly why you want two term sheets.