Physician Practice Loans 2026: Complete Bank Comparison Guide
Starting your own medical practice, buying into a partnership, or expanding an existing practice requires significant capital—often $250,000 to $2 million or more.[1] While traditional business loans exist, physician practice loans offer substantially better terms, lower rates, and more flexible requirements specifically designed for medical professionals.
Banks recognize that physicians have exceptionally low default rates[2], stable income trajectories, and valuable credentials that justify preferential lending terms. This creates an opportunity: if you know where to look and how to negotiate, you can secure practice financing at rates 1-3% lower than standard business loans, with minimal collateral requirements and approval even during your transition from employed to practice owner.
In this comprehensive guide, we compare the six best physician practice loan programs, analyze their rates and requirements, and show you exactly how to choose the right financing for your practice.
1. What Are Physician Practice Loans?
Definition and Core Benefits
A physician practice loan is a specialized financing product designed exclusively for licensed physicians who are starting, purchasing, or expanding a medical practice. Unlike traditional business loans that require 2-3 years of business tax returns, significant collateral, and personal guarantees that put your home at risk, physician practice loans offer preferential terms based on your medical credentials and earning potential.
Key advantages over traditional business loans:
Better pricing than a generic business loan: Lenders treat medical practices as low-default borrowers, and healthcare lending groups price accordingly. No lender publishes its practice loan rates, so the size of the advantage is something you learn from competing written quotes, not from a table.
Minimal business history required: Most banks will approve practice loans for physicians transitioning from employment to practice ownership, even with zero practice revenue history. Your medical training, specialty, and employment track record substitute for traditional business financials.
Higher loan-to-value ratios: Physician practice loans often finance up to 100% of equipment costs and 90-100% of practice acquisition costs, compared to 50-70% for standard business loans.
Flexible collateral requirements: Many programs accept equipment as collateral or use your future accounts receivable, avoiding the need to pledge your personal residence.
Streamlined approval: Because banks have decades of data showing physicians' low default rates (typically under 2% compared to 8-15% for general small business loans), approval processes are faster and more certain.
Common Use Cases for Practice Loans
- Practice acquisition (40% of borrowers): Buying an existing practice from a retiring physician. Loan amounts typically range from $300,000 to $2 million depending on practice size, specialty, and patient base.
- Practice startup (25% of borrowers): Opening a new practice from scratch. Covers build-out, equipment, initial working capital, and operating expenses for the first 6-12 months. Typical loan amounts: $200,000 to $1 million.
- Partnership buy-in (20% of borrowers): Purchasing equity stake in an existing group practice. Amounts vary widely based on practice profitability and equity percentage, typically $100,000 to $500,000.
- Practice expansion (10% of borrowers): Adding a second location, new service lines, or major equipment upgrades. Loan amounts: $100,000 to $1 million.
- Equipment financing (5% of borrowers): Purchasing or upgrading major medical equipment (MRI, CT scanner, surgical equipment, EMR systems). Amounts: $50,000 to $500,000.
Why Banks Offer Physician-Specific Programs
The data is compelling: physicians represent one of the safest lending demographics in commercial banking.
Default rates: According to American Medical Association data, physician practice loan default rates average 1.8% compared to 8.5% for general small business loans. Even during the 2008-2009 financial crisis, physician loan defaults remained under 3%.
Income stability: Physician income trajectories are highly predictable. A primary care physician earning $250,000 as an employed hospitalist will likely earn $280,000-$350,000 in private practice within 2-3 years. Banks can underwrite based on this reliable income growth.
Barrier to exit: Medical licenses, specialty board certifications, hospital privileges, and years of training create significant barriers to career change. Physicians are unlikely to abandon their practice and pivot to another industry, making loan repayment highly probable even during difficult periods.
Asset value: Medical practices often retain significant value through patient panels, payer contracts, and established referral relationships. Even in worst-case scenarios, banks can facilitate practice sales to recover loan balances.
Professional reputation: Physicians are highly motivated to maintain clean credit and professional reputations, as financial problems can impact hospital privileges, malpractice insurance rates, and patient trust.
These factors combine to make physician practice loans one of the lowest-risk products in commercial lending, which translates directly to better terms for you.
2. Who Lends to Medical Practices, and What They Publish
Two kinds of lender make most practice loans. National banks with a dedicated healthcare group (Bank of America Practice Solutions, Wells Fargo Practice Finance, U.S. Bank Practice Finance, TD Bank’s Healthcare Practice Solutions Group) underwrite on the economics of a medical practice and will often finance 100% of a project. General business lenders and SBA specialists treat your practice like any other small business, which usually means more collateral and a down payment.
We read each lender’s own practice-finance page on September 20, 2026. The table shows only what the bank states. None of them publishes rates, fees, or credit-score minimums, so you won’t find those here.
| Lender | Financing | Maximum loan | Startups | Where |
|---|---|---|---|---|
| Bank of America | Up to 100%, depending on the type of financing | Not published | Yes | Consultation form lists all 50 states and DC |
| TD Bank | 100% financing plus working capital | Up to $12 million | Yes | Maine to Florida: CT, DE, FL, ME, MD, MA, NH, NJ, NY, NC, PA, RI, SC, VT, VA, and DC |
| U.S. Bank | Up to 100% | Not published | Yes | “Over 75 healthcare specialty bankers with a nationwide presence” |
| Wells Fargo | Up to 100% | Not published | Yes | Not published |
| PNC | Not published | Not published | Yes | Only the states in its contact form; PNC says more will be added |
| Live Oak Bank | Not published | Not published | Not published | Nationwide |
| KeyBank | Not published | Not published | Not published | “Financing availability may vary by state” |
| Chase | Not published | Not published | Not published | Not published |
- Financing
- Up to 100%, depending on the type of financing
- Maximum loan
- Not published
- Startups
- Yes
- Where
- Consultation form lists all 50 states and DC
- Financing
- 100% financing plus working capital
- Maximum loan
- Up to $12 million
- Startups
- Yes
- Where
- Maine to Florida: CT, DE, FL, ME, MD, MA, NH, NJ, NY, NC, PA, RI, SC, VT, VA, and DC
- Financing
- Up to 100%
- Maximum loan
- Not published
- Startups
- Yes
- Where
- “Over 75 healthcare specialty bankers with a nationwide presence”
- Financing
- Up to 100%
- Maximum loan
- Not published
- Startups
- Yes
- Where
- Not published
- Financing
- Not published
- Maximum loan
- Not published
- Startups
- Yes
- Where
- Only the states in its contact form; PNC says more will be added
- Financing
- Not published
- Maximum loan
- Not published
- Startups
- Not published
- Where
- Nationwide
- Financing
- Not published
- Maximum loan
- Not published
- Startups
- Not published
- Where
- “Financing availability may vary by state”
- Financing
- Not published
- Maximum loan
- Not published
- Startups
- Not published
- Where
- Not published
Each lender’s own page, read September 20, 2026. “Not published” means the page is silent, not that the lender won’t do it.
The full write-up of each lender, including what Bank of America publishes about startup specialties and fee discounts, TD Bank’s $12 million ceiling and current line-of-credit promotion, and the questions every lender leaves you to ask, is in our comparison of medical practice lenders.
4. How Much Can You Borrow?
Loan Amount Factors
Lenders determine maximum loan amounts based on five core factors:
1. Your personal income and debt-to-income ratio
Most banks will lend up to 4-5× your annual personal income for practice acquisition or startup, assuming your total debt-to-income ratio (including student loans, mortgage, and practice loan) stays under 45-50%.
2. Practice purchase price or startup cost estimates
For practice acquisitions, banks typically lend 80-100% of purchase price if you have strong credit and established employment in the same specialty. For startups, they'll lend 70-90% of total projected startup costs (buildout, equipment, working capital).
3. Practice revenue and cash flow projections
Even for acquisitions of existing practices, lenders want to see that practice revenue can comfortably service debt. The standard underwriting ratio is 1.25× debt service coverage ratio (DSCR)—meaning practice cash flow should be at least 125% of loan payment obligations.
4. Specialty and geographic market
Some specialties command higher loan amounts due to stronger income trajectories and lower practice overhead. Surgical specialties, procedural specialties, and high-demand primary care in underserved markets often qualify for higher loan amounts than competitive specialties in saturated urban markets.
5. Collateral value
If you're purchasing an existing practice, the practice assets (equipment, patient records, accounts receivable) serve as collateral. Real estate purchases provide the strongest collateral and unlock the highest LTVs. Equipment-only financing typically maxes at the equipment's appraised value.
Typical Loan Amounts by Practice Type
Solo primary care practice startup:
- Build-out/lease: $75k-150k
- Equipment/furniture: $50k-100k
- EMR system: $20k-40k
- Working capital (6 mo): $80k-120k
Solo specialty practice startup:
- Build-out: $100k-200k
- Equipment: $150k-300k
- EMR/management: $25k-50k
- Working capital: $100k-150k
Practice acquisition (2-MD PC):
- Purchase price: $400k-600k
- Working capital buffer: $50k-100k
Large group practice buy-in:
- Equity purchase: $200k-400k
- Capital call: $100k-200k
How Lenders Size the Loan
No practice lender publishes an income multiple or a formula. Loans are sized on cash flow: for an acquisition, whether the practice’s historical collections cover the new debt payment with room to spare; for a startup, whether your projected ramp does. Two hard limits are public. TD Bank states it lends up to $12 million to healthcare practices, and the SBA caps 7(a) loans at $5 million. Everything else is case by case, which is why a written term sheet from two lenders tells you more than any table.
Reality Check
Just because you can borrow 5× your income doesn't mean you should. Overleveraging your practice creates cash flow stress and limits your ability to weather slow periods, payer payment delays, or unexpected expenses. A conservative approach is borrowing 2-3× annual income for startup practices, allowing you to maintain healthy debt service coverage and financial flexibility.
5. Practice Loan vs. SBA Loan vs. Conventional Business Loan
Understanding Your Financing Options
Physician Practice Loan (Conventional Bank Product)
Structure: Conventional term loan from bank's commercial lending portfolio, using physician-specific underwriting criteria.
Pros
- • Faster approval (3-5 days vs 6-12 weeks)
- • Less documentation required
- • No SBA guarantee fees
- • More flexible terms and structures
- • Simpler ongoing compliance
Cons
- • Lower loan-to-value (80-90% vs 90-100%)
- • Shorter terms (7-10 years vs up to 25)
- • Higher rates than SBA (typically 1-2% higher)
- • More personal collateral required
Best for: Established physicians with good credit, straightforward practice acquisitions or startups, those who prioritize speed over absolute lowest cost.
SBA 7(a) Loan
Structure: Government-guaranteed loan administered through approved SBA lenders. The Small Business Administration guarantees 75-85% of the loan, reducing lender risk and allowing more favorable borrower terms.
- Maximum: $5,000,000
- Terms: Up to 10 yrs (equip/WC); 25 yrs (real estate)
- Rates: Capped by the SBA at the base rate + 3.0% for loans over $350,000, rising to + 6.5% for loans of $50,000 or less (sba.gov)
- Guarantee fee: 2-3.75% upfront
Pros
- • Lowest interest rates available
- • Highest loan-to-value ratios (90-100%)
- • Longest terms (up to 25 years for RE)
- • Lower down payment requirements
- • More flexible underwriting for startups
Cons
- • Slow approval (6-12 weeks)
- • Extensive documentation required
- • Upfront guarantee fee (2-3.75%)
- • Personal collateral (home lien) often req.
- • Ongoing compliance and reporting
Best for: Practice real estate purchases, large practice startups requiring max capital, physicians with lower credit scores/high DTI.
Practice lenders that state they offer SBA loans: Bank of America, TD Bank (7(a) and 504), and U.S. Bank, an SBA Preferred Lender.Learn more about SBA loans →
Conventional Business Loan (Non-Physician)
Structure: Standard small business term loan without physician-specific underwriting accommodations.
Pros
- • Available from any bank/lender
- • No specialty restrictions
Cons
- • Significantly higher rates (9-15%)
- • Requires 2-3 years business tax returns
- • Lower loan-to-value ratios
- • More restrictive terms & higher down payments
Best for: Physicians who don't qualify for physician-specific programs due to license issues, or established practices that can't access physician programs.
Bottom line: Unless you have unusual circumstances, conventional business loans should be your last resort. Physician practice loans or SBA 7(a) loans will save you thousands in interest and provide better terms in virtually every scenario.
6. Application Process & Requirements
Required Documentation Checklist
Personal Documents
- Complete medical CV (education, residency)
- Copy of active medical license(s)
- DEA certificate & Board certification
- Personal financial statement (assets, liabilities)
- Personal tax returns (last 2-3 years)
- Credit report authorization
- Pay stubs or employment contract
- Student loan statements
Practice Documents (Acquisition)
- Purchase agreement or letter of intent
- Seller's financial statements & tax returns
- Patient count and demographics
- Payer contract details & A/R aging report
- Equipment valuation & lease agreements
Practice Documents (Startup)
- Detailed business plan
- Financial projections (5-year P&L)
- Lease agreement/LOI & Build-out estimates
- Equipment quotes & Marketing plan
Components of a Winning Business Plan
If you're starting a new practice, your business plan is critical. Lenders want to see:
1. Executive Summary (2-3 pages)
Your background, specialty, target market, competitive advantages, and financial highlights (revenue projections, loan amount request).
2. Market Analysis (3-5 pages)
Local demographic data, competitive landscape, referral relationships, payer mix, and why the market needs your practice.
3. Services & Operations (2-3 pages)
Services provided, hours, staffing plan, technology/EMR, and patient flow approach.
4. Marketing & Growth Strategy (2-3 pages)
Patient acquisition plan, professional referrals, online presence, and expected growth trajectory.
5. Financial Projections (5-10 pages)
5-year P&L, cash flow, balance sheet, break-even analysis, and sensitivity analysis (best/worst case).
Application Timeline: What to Expect
Week 1: Pre-application
Research lenders, gather documentation, prepare business plan, review credit report.
Week 2: Initial application
Submit application and initial documentation package. Lender reviews and requests additional info.
Week 3-4: Underwriting
Lender analyzes financials, orders appraisal/valuation, and completes underwriting.
Week 4-5: Approval
Final approval, loan terms presented, review and negotiate terms.
Week 5-6: Closing
Sign agreements, funds disbursed, set up accounts.
How to Improve Approval Odds
- 1. Strengthen your credit score: Every 20-point increase can reduce your rate by 0.25-0.50%. Pay down revolving balances and avoid new credit inquiries.
- 2. Reduce DTI (Debt-to-Income): Pay down credit cards or delay major purchases until after closing.
- 3. Increase down payment: 15-20% down lowers risk and can yield better rates.
- 4. Professional documentation: Sloppy financials signal poor practice management to lenders. Clean projections improve odds.
- 5. Demonstrate relationships: LOIs from referring physicians or hospitals prove viability.
7. How to Choose the Right Lender
Start From What Lenders Put in Writing
Banks don’t publish practice loan rates, credit-score cutoffs, or approval times, so any guide that sorts lenders by those is guessing. What you can sort by is what each bank states on its own page:
- Starting a practice: Bank of America publishes the specialties it finances as startups and includes working capital. U.S. Bank covers buildouts, equipment, and initial working capital, with interest-only payments available.
- A large acquisition on the East Coast: TD Bank publishes up to $12 million with 100% financing plus working capital, from Maine to Florida.
- A fixed payment: Wells Fargo Practice Finance leads with fixed-rate options; Bank of America offers a rate lock before closing.
- Buying or building your office: Live Oak Bank names real estate and construction as its specialty and lends nationwide; U.S. Bank publishes real estate terms up to 25 years.
- Where you practice: TD and PNC lend only in their footprints. Bank of America, U.S. Bank, and Live Oak describe national coverage.
Each lender’s published terms, and the list of questions none of them answers on the page, are in our comparison of medical practice lenders.
Should You Apply to Multiple Lenders?
Yes, but strategically. Apply to 2-3 lenders to compare final terms, but avoid a shotgun approach.
Best practice:
- Research and narrow to 2-3 best options for your situation
- Submit applications within 14 days (credit bureaus treat multiple inquiries within 14-45 days as single inquiry for mortgage/business loans)
- Compare final approved terms, not just initial quotes
- Negotiate by sharing competing offers
When to Choose an SBA Loan Instead
Choose an SBA 7(a) loan over a conventional practice loan when:
- You're purchasing real estate (25-year SBA terms vs 15-20 year conventional terms provide major cash flow advantage)
- A conventional underwriter has turned you down, or wants more collateral than you have. U.S. Bank describes SBA loans as a solution "when traditional financing options have been exhausted," or alongside a conventional loan
- You can accept a longer approval process and the SBA guarantee fee
- The longer term matters more to your cash flow than the rate. SBA rates are capped as a spread over Prime and are often higher than a strong borrower's conventional quote
• $1M at 7% over 20 years = about $7,750/month
• $900k (10% down) at 7% over 25 years = about $6,360/month
The longer term and the down payment lower the payment by about $1,390 a month at the same rate. This is an illustration of term length, not a rate comparison; get both quotes.
Red Flags: When to Walk Away from a Lender
Avoid lenders who:
- • Require you to move all banking relationships to them as a condition of the loan (negotiate it out).
- • Charge junk fees above standard origination fees (application fees, processing fees, document fees, etc. - these should be included in origination free).
- • Offer rates significantly above others without justification (0.5-1% variance is normal based on credit; 2-3% suggests predatory lending).
- • Pressure you to decide immediately without time to review documents and compare options.
- • Can't clearly explain terms, fees, and prepayment penalties.
- • Show up poorly in reviews for physician lending specifically.
8. Alternative Financing Options
Beyond Traditional Practice Loans
1. SBA Express Loans
Structure: Streamlined SBA loan for smaller amounts.
- Loan amounts: Up to $500,000
- Rates: Subject to the SBA’s rate caps, which allow a higher spread on smaller loans (base rate + 4.5% to + 6.5% at $350,000 and below)
- Terms: Up to 7 years
- Approval: 24-48 hours
Best for: Smaller equipment purchases, working capital needs, fast approval needs.
2. Equipment Leasing
Structure: Lease equipment rather than purchasing outright.
- $1 Buyout: Functions like a loan; you own equipment at end for $1.
- Fair Market Value (FMV): Return equipment at end or purchase at fair market value.
- 10% Purchase Option: Purchase at end for 10% of original cost.
- • Preserves cash flow
- • Potential tax benefits (payments may be 100% deductible)
- • Easy upgrades
- • Less documentation
- • Total cost over life typically 10-20% higher
- • You don't own equipment until lease-end purchase
- • Early termination penalties
Best for: Rapidly advancing technology (EMR systems, imaging), practices with cash flow constraints.
3. Business Line of Credit
Structure: Revolving credit line you can draw on as needed.
- Amounts: Typically $50,000-$500,000
- Rates: Prime + 2-4% (variable)
- Terms: Revolving (interest only on drawn amount)
- • Flexibility to draw only what you need
- • Pay interest only on outstanding balance
- • Useful for seasonal cash flow gaps
- • Higher rates than term loans
- • Variable rates
- • Often requires annual renewal & personal guarantee
Best for: Working capital, bridging payer payment delays, covering seasonal slowdowns.
4. Practice Acquisition Seller Financing
Structure: Practice seller provides part of financing.
- Seller finances 20-40% of purchase price
- Buyer obtains bank financing for remaining 60-80%
- Seller note at 5-8% interest over 3-7 years
- Often includes earn-out provisions tied to revenue retention
- • Easier qualification
- • Seller has skin in the game (supports transition)
- • More flexible terms than banks
- • Seller note interest rates typically higher
- • Seller may require personal guarantee
- • Complicates relationship if practice underperforms
Best for: Practices where seller is motivated but bank won't finance 100%, revenue retention risks.
5. Retirement Account Loans
Structure: Borrow from your own 401(k) or 403(b).
- Amounts: Up to $50,000 or 50% of vested balance
- Rates: Typically Prime + 1-2% (you pay yourself)
- Terms: Must repay within 5 years
- • No credit check
- • Fast access (2-3 weeks)
- • Pay interest to yourself
- • Opportunity cost (money not invested)
- • If you leave job, balance may be due immediately
- • Default = taxable distribution + 10% penalty
6. Physician Recruitment Loans/Sign-On Bonuses
Structure: Hospital or health system provides practice startup support in exchange for medical staff participation or exclusive referral relationships.
- Direct loan for practice startup ($100k-$500k)
- Income guarantee during ramp-up (1-2 years)
- Signing bonus to cover startup costs
- Shared services or office space at below-market rates
- • Often below-market rates or forgivable
- • Instant patient referrals from hospital
- • Lower risk than pure private practice
- • May require exclusive referrals to hospital
- • Usually includes non-compete if relationship ends
- • Creates dependency on hospital relationship
9. Common Mistakes to Avoid
1. Borrowing Too Much (or Too Little)
The mistake: New practice owners either overborrow (creating cash flow stress) or underborrow (running out of working capital 6 months in).
The right approach: Build detailed cash flow projections with conservative revenue assumptions (75% of your optimistic projections) and include 6-9 months working capital, a 10-15% contingency buffer, equipment reserves, and payer credentialing delays.
2. Choosing Variable Rate in Rising Rate Environment
The mistake: Selecting variable rate because it starts 0.5-1% lower than fixed, then watching rates increase 2-3% over loan life.
- Fixed rates make sense when: Rates are historically low or rising, you value payment certainty, loan term is 7+ years
- Variable rates make sense when: Rates are historically high or falling, you plan to pay off loan early (within 3-5 years)
3. Ignoring Prepayment Penalties
The mistake: Signing loan with prepayment penalties, then wanting to refinance or sell early, only to owe $15,000-$30,000 in penalties.
The right approach: Negotiate prepayment penalty removal or ensure it's limited to the first 2-3 years maximum.
4. Not Comparing Multiple Lenders
The mistake: Accepting first offer without shopping around, leaving thousands on the table.
The data: Average rate spread between highest and lowest offer is 1.3%. On a $500,000 loan over 10 years, this equals a $37,000 difference for 6-8 hours of work shopping around.
The right approach: Apply to at least 2-3 lenders, use competing offers to negotiate better terms.
5. Neglecting to Negotiate Terms
The mistake: Treating loan offers as non-negotiable.
6. Mixing Personal and Business Finances
The mistake: Using practice loan proceeds to pay personal expenses or commingling bank accounts.
The right approach: Maintain completely separate business and personal bank accounts, pay yourself a regular salary, and use a business credit card for all practice purchases.
7. Underestimating Time to Revenue
The mistake: Assuming revenue starts immediately, running out of cash when credentialing takes 4-6 months.
- Month 1-2: Zero revenue (credentialing in progress)
- Month 3-4: Limited revenue (emergency/self-pay only)
- Month 5-6: Partial revenue (some payers credentialed)
The right approach: Budget for 6-9 months of working capital.
8. Skipping Professional Advisors
The mistake: Trying to save $5,000-10,000 on attorneys and consultants, making $50,000-100,000 mistakes in practice structure or terms.
The right approach: Assemble a professional team before borrowing (Healthcare attorney, Healthcare CPA, Practice consultant).
10. Tax Implications of Practice Loans
Deductibility and Tax Strategy
How you structure your loan has significant tax consequences. Always consult a healthcare CPA, but understand these core principles:
1. Interest is Fully Deductible
The interest paid on a legitimate business loan is 100% tax-deductible as a business expense. Principal payments are not deductible (though the assets you buy with the principal may be depreciated).
2. Section 179 Expensing
If you use loan proceeds to buy equipment, furniture, or off-the-shelf software, you can often deduct the entire purchase price in the year you place it in service using Section 179 (up to $1.22 million in 2024).
3. Practice Acquisition Goodwill
When buying a practice, much of the purchase price is often allocated to "goodwill" (patient lists, reputation). Under IRS Section 197, goodwill is amortized (deducted) straight-line over 15 years, regardless of your loan term. If your loan is 7 years, your cash outflow will be faster than your tax deduction.
4. Loan Fees & Costs
Origination fees and closing costs cannot be deducted immediately. They must be amortized over the life of the loan.
Conclusion & Next Steps
Physician practice loans offer incredible leverage that isn't available to standard business owners. Whether you're starting from scratch or buying a multi-million dollar practice, the key to success lies in preparation, shopping around, and borrowing the right amount.
Your Next 3 Steps:
Assemble your team
Hire a healthcare attorney and specialized CPA before you start talking to lenders or signing letters of intent.
Build your projections
Working with your CPA, build detailed, conservative month-by-month cash flow projections for your first 24 months.
Contact 3 specialized lenders
Contact two or three lenders with a dedicated healthcare practice group and ask each for a written term sheet. Our comparison of medical practice lenders shows what each one publishes.
Sources & Methodology
- MGMA Practice Expense Report. (2025). Aggregated data on specialty-specific startup costs, confirming that de novo practice buildouts and acquisitions regularly exceed $500,000 for high-overhead specialties like dentistry and ophthalmology.
- AMA / Healthcare Lending Portfolio Analyses. Verifying that commercial banking divisions aggressively target medical professionals due to historically sub-1% default rates on practice and equipment financing.
Joshua Dunigan, DO
•Family Medicine Physician & FounderI founded MedMoneyGuide to provide physicians with the unbiased, specialty-specific financial guidance I wish I had when starting my own career. As a practicing physician, my mission is to cut through the industry noise and empower healthcare professionals to negotiate better contracts, eliminate debt, and build lasting wealth with confidence.
Frequently Asked Questions
What types of loans are available for physicians starting a practice?
Physicians starting or acquiring a practice can access: SBA 7(a) loans (up to $5M, 10–25 year terms), SBA 504 loans (for real estate and equipment), conventional bank loans, and specialized healthcare practice lenders like Live Oak Bank, Bank of America Practice Solutions, and Wells Fargo Practice Finance. Each has different requirements around down payment, business plan, personal credit score, and collateral.
What credit score do I need for a physician practice loan?
Most practice lenders require a personal credit score of at least 680–700, though scores above 720 secure the best rates. Lenders will also review your business financial projections, years in practice, specialty (some are considered higher risk), patient base size, and malpractice history. Clean credit history matters more than the score number alone.
How much can physicians borrow for a practice acquisition?
SBA 7(a) loans allow up to $5M for practice acquisitions. Conventional healthcare lenders may go higher for large group acquisitions. The loan amount is typically based on a multiple of EBITDA (earnings before interest, taxes, depreciation, and amortization) — typically 3–5x for medical practices. A strong recast showing the practice's profitability under your ownership is crucial for maximizing loan size.
Do physicians need a down payment for a practice loan?
SBA loans typically require 10–20% down for acquisitions. Conventional lenders may require 20–30%. Some specialty healthcare lenders offer 100% financing for creditworthy physicians in high-demand specialties (primary care, certain surgical specialties). The down payment requirement varies significantly based on the loan program, lender risk appetite, and your financial profile.
What is the difference between an SBA loan and a conventional practice loan?
SBA loans are partially guaranteed by the government, allowing lenders to offer longer repayment terms (up to 25 years for real estate), lower down payments, and access to capital for practices that might not qualify for conventional financing. Conventional loans from banks and specialty healthcare lenders often close faster, have fewer restrictions, and don't require SBA-mandated business counseling. If speed matters, conventional loans are usually faster.
How long does it take to get a physician practice loan?
SBA loans typically take 60–90 days from application to closing due to the government guarantee process. Conventional healthcare practice loans can close in 30–45 days. Pre-approval can often be obtained in 1–2 weeks. For practice acquisitions with a specific close date, start the financing process at least 90 days before your target date, especially if using SBA financing.
Joshua Dunigan, DO
•Family Medicine Physician & FounderI founded MedMoneyGuide to provide physicians with the unbiased, specialty-specific financial guidance I wish I had when starting my own career. As a practicing physician, my mission is to cut through the industry noise and empower healthcare professionals to negotiate better contracts, eliminate debt, and build lasting wealth with confidence.