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The process of buying a medical practice doesn’t begin with patient charts or staffing plans — it starts with financing. A successful acquisition hinges on your ability to secure the proper funding, at the right terms, for the right practice.   Fortunately, there are lending solutions specifically designed for healthcare buyers. The challenge is finding the right fit — and preparing yourself financially to take full advantage of it.  In this article, we’ll break down the leading medical practice financing options and help you build a plan that supports long-term success.  

Understand the True Costs of Buying a Medical Practice

Before evaluating loan products or lenders, you need a clear understanding of the actual medical practice acquisition cost — not just the sale price. Too often, buyers fixate on the asking price and overlook everything else that comes with a practice acquisition.   You’ll need to account for legal fees, working capital, potential equipment upgrades, staff onboarding, technology updates, and even lease renegotiations. These add-ons can significantly impact your budget — sometimes by hundreds of thousands of dollars.   For example, a practice listed at $750,000 might ultimately require closer to $900,000 when all associated transition costs are factored in. This is where many first-time buyers get caught off guard. Failing to plan for these costs is one of the most common reasons deals fall through late in the process.

Explore Your Loan Medical Practice Funding Options

With your financial needs outlined, the next step is identifying the right financing vehicle.   There’s no single “best” option when it comes to practice purchase financial planning — it depends on your goals, timeline, and financial profile. Fortunately, healthcare buyers have several solid loan routes to explore: 
  1. Bank Loans: These are ideal for individuals with strong credit, substantial assets, and a well-defined plan. They typically offer competitive rates but come with stringent approval standards. 
  2. SBA 7(a) Loans: The Small Business Administration’s 7(a) program is widely used in healthcare acquisitions. Backed by the government, these loans are designed for small business acquisitions and often come with favorable terms and lower down payments. 
  3. Seller Financing: In some transactions, the current owner may be willing to finance a portion of the sale. This can ease cash flow and show seller confidence in the business’s future. However, terms must be carefully negotiated to avoid future conflict. 
  4. Private Healthcare Lenders: Specialized lenders and private equity-backed groups are becoming more common, especially in larger transactions. They understand the industry but often demand higher returns and more aggressive repayment terms. 
The best choice depends on what fits your situation — not just what looks good on paper.

Pick the Right Fit

So, how do you know which financing option is right for you?  It depends on your unique situation — and the practice you’re buying. The best funding structure is one that supports both the acquisition and your long-term strategy.   Consider: 
  • Practice size and specialty: Specialties such as dental, ophthalmology or urgent care often incur higher equipment or staffing costs. Your financing must reflect those realities. 
  • Solo vs. group buy-in: Shared ownership can open new financing opportunities — or complicate the process. 
  • Growth Trajectory: Planning to expand services or add providers within a year? Then, flexibility in repayment terms matters more than a slightly lower rate. 
The financing must align with the deal — and the deal must align with your long-term objectives.

Get Financially Ready

Before applying for any loan, make sure your financial profile is in order. Lenders will scrutinize your personal finances, business history (if applicable), and the stability of the practice you’re buying.  Prepare to show: 
  • Credit score, liquidity, and current debt obligations 
  • Verified income and tax returns 
  • A clear, professional business plan with revenue projections, staffing plans, and market analysis 
  • Practice financials: past 3 years of tax returns, balance sheets, and cash flow statements 
Strong documentation demonstrates your seriousness — and lowers the perceived risk for lenders. Many buyers get delayed or rejected simply because their materials aren’t complete or credible.   

Work With the Right Team

You don’t have to figure this all out on your own — and you shouldn’t try to. Buying a medical practice is a complex transaction that benefits from the expertise of experienced advisors.    At Tinsley Medical Practice Brokers, we believe a successful deal is built by the right team — not just the right numbers. Practice transitions are multifaceted, encompassing legal, financial, regulatory, and personal aspects. Each layer needs experienced handling. We advise every buyer to engage with professionals who understand both the healthcare space and the nuances of private practice deals.    This typically includes: 
  • A brokerage team with healthcare-specific transaction expertise 
  • A seasoned CPA who knows how to model post-acquisition cash flow and tax implications 
  • A healthcare attorney with experience in practice buy-sell agreements and regulatory compliance 
With the proper support, the process becomes manageable—and significantly less stressful. Get the right people on board. 

Long Term Success

Securing financing for a medical practice is about more than just finding a lender — it’s about building the foundation for long-term success. The smartest buyers approach financing strategically, with a clear plan and the right partners by their side.   At Tinsley Medical Practice Brokers, we specialize in guiding healthcare professionals through every stage of the acquisition process — including funding strategy. If you’re ready to explore your financing options and take the next step in your career, connect with our team today.   

FAQs about Financing Strategies for Buying a Medical Practice

What are the hidden costs involved in buying a medical practice?

The asking price is just the beginning. Buyers often overlook essential transition-related costs, which can significantly raise the total funding needed. Common hidden costs include: 

  • Legal fees for due diligence and contract negotiation 
  • Working capital to cover initial payroll, supplies, and overhead 
  • Technology upgrades, such as EHR systems or billing software 
  • Facility costs, including lease renegotiations or renovations 
  • Staff training or retention incentives 

A practice listed at $750,000 may require $900,000 or more in total capital once these additional items are factored in. Proper financial planning up front helps avoid surprises that can stall or derail your acquisition. 

What type of financing is best for my specific practice acquisition, and how do I know?

The best financing option depends on your specific situation, including your credit profile, the size and specialty of your practice, your ownership experience, and your long-term goals. Here’s a quick breakdown: 

  • Conventional Bank Loans best for buyers with strong credit, liquidity, and a solid business plan. 
  • SBA 7(a) Loans ideal for first-time buyers or those with less upfront capital, offering favorable terms with government backing. 
  • Seller Financing may be available in private deals and can ease cash constraints. 
  • Private or Healthcare-Specific Lenders can move faster and understand medical practice dynamics but often carry higher rates. 

Working with a broker can help you compare your options and match you with lenders suited to your specific deal profile. 

What documents do I need to prepare before applying for a loan to buy a practice?

Lenders will want a clear picture of both your finances and the financial health of the practice you’re buying. You should be ready to provide: 

  • Personal tax returns (2–3 years) 
  • Credit report and financial statements (assets, liabilities, net worth) 
  • Business plan with revenue forecasts, staffing plans, and operational goals 
  • Practice financials (last 3 years of tax returns, P&L, balance sheets) 
  • Proof of income and professional resume or CV 

Well-prepared documentation builds lender confidence and speeds up the underwriting process. 

What’s the difference between conventional bank loans and SBA loans for medical practices?

SBA 7(a) Loans are partially guaranteed by the federal government, making them more accessible for buyers with limited capital or less ownership experience. They often: 

  • Require lower down payments 
  • Have longer repayment terms 
  • Involve more paperwork and a longer approval timeline 

Conventional Bank Loans, on the other hand: 

  • Typically, offer lower interest rates 
  • Require strong credit and collateral 
  • Can move faster but have tighter eligibility standards 

Each has its advantages. The right choice depends on your goals, timeline, and financial profile. 

Why is it important to work with a broker, CPA, and attorney when buying a practice?

Buying a medical practice is not just a financial transaction — it’s a legal and operational shift with long-term implications. Surrounding yourself with the right team ensures the process is smooth, secure, and strategic. 

  • A broker helps identify practices, structure deals, and connect you with lenders who understand the healthcare industry. 
  • A CPA ensures the financials make sense, prepares projections, and guides tax planning. 
  • A healthcare attorney protects your legal interests, reviews contracts, and ensures regulatory compliance. 

Tinsley Medical Practice Brokers collaborates closely with professionals in each of these roles to support buyers through every phase of the acquisition process.