How to Find Medical Practice Financing That Works for Your Goals

Imagine going to a lender to acquire a medical practice and they offer to cover the full purchase price. They may even provide funds for staff, equipment and several months of operations. This scenario is not rare. For physicians acquiring established practices, 100% financing is common. Lenders see medical practices as stable investments, thanks to predictable patient volume and revenue.

That said, securing a loan means being able to analyze financing proposals, prepare clear documentation and understand lender expectations. Whether you’re stepping into an existing practice or planning a new one, a well-prepared financial profile can significantly impact your financing outcomes.

Why banks love financing medical practices.

Lenders favor physicians due to their strong earning potential and tendency to have a stable income and high net worth. As a result, many banks offer:

• Financing that covers 100% of the purchase price for an existing medical practice
• Additional capital for working capital, equipment or leasehold improvements
• Flexible repayment terms, including interest-only options during the transition period

These terms reflect that lenders are financing a proven business model with established cash flow rather than a speculative startup. Even so, they will require documentation such as tax returns, profit and loss statements, and a professional valuation. Your specialty, experience, and transition plan also play into their decision.

Despite favorable offers, it’s wise to compare lenders. Interest rates, repayment schedules, fees, and lender responsiveness can differ widely.

Your financial picture must be crystal clear.

Before lenders commit to 100% financing, they will carefully verify both your credentials and the health of the practice. Most will require:

• Recent individual tax returns, covering the last two to three years
• Practice financial statements, including profit and loss and cash flow reports
• A formal valuation prepared by a qualified appraiser
• Business licenses and board certifications, depending on your specialty

We recommend assembling these documents early in the process to build credibility and speed up approvals. (Our Healthcare Services team collaborates with healthcare providers and lenders to confirm that every figure supports our client’s loan request. This helps strengthen your application and reduce the chance of last-minute surprises.) You’ll also need to outline your experience and transition plan for patient care, which lenders will assess alongside the numbers.

Bringing clarity to your financial presentation is a strategic must. When you can explain revenue trends, operating costs, reimbursement rates and staffing models, you demonstrate a depth of insight that gives lenders confidence. That confidence can translate into better interest rates, lower fees and more flexible structures.

Can you finance a startup medical practice? Yes… but it’s harder.

Banks are more cautious when funding new practices. According to an article focused on startup loans for physicians, lenders often require:

• A comprehensive business plan that clearly defines your model and market
• Detailed financial projections for revenues, costs and cash flow
• Strong personal credit or existing assets to secure the loan
• Often a co-signer or partner with medical or financial experience

Bank of America highlights that startup loans may include interest‑only periods or graduated payments, but close oversight usually continues throughout the early years. The loan process for startups can take months, so begin planning early.

Startups also carry higher risk because they lack proven cash flow. Even so, some lenders, including the U.S. Small Business Administration through its 7(a) program, offer long‑term loans (up to 25 years) with lower down payments. Unlike acquisition financing, banks may require you to cover 20% or more of total startup costs out of pocket. They may also ask for collateral or personal guarantees.

Our team helps new practices build realistic models and strengthen loan applications. We guide physicians through budget development, reimbursement analysis and documentation preparation so they can approach lenders with confidence.

Comparing lenders: What to watch for

When seeking medical practice financing, not all lenders offer the same terms. It is smart to review and compare loan offers across different banks, credit unions, and specialty lenders. Key elements to compare include:

• Interest rates and risk-based pricing: Lenders set rates based on creditworthiness, loan purpose and collateral. Medical loans often carry rates from around 5% to 15%.
• Repayment flexibility: Some banks include deferred or interest-only periods during the early transition months.
• Loan-to-value limits and down payment requirements: Acquisition loans may cover 100% of the purchase price. Startup financing typically involves at least 20% borrower equity or collateral.
• Fees and prepayment terms: Origination, documentation and prepayment penalties vary; reading the fine print can save you money over the loan’s life.
• Service and speed: Local and specialty lenders (such as MainStreet Bank or niche healthcare lenders) may close faster and offer expert support.

For example, credit unions and traditional banks might provide competitive rates and relationship banking. In contrast, SBA‑backed loans offer longer terms and lower equity requirements but involve more paperwork. Specialty medical lenders and alternative lenders may underwrite younger practices or provide faster decisions (often at higher interest rates).

At James Moore, we gather and compare offers from several lenders, then review terms with your priorities in mind — whether that means lower monthly payments, faster funding or fewer fees. Comparing thoughtfully can significantly reduce financing costs and risk.

Understand what you are financing

Physicians often finance multiple components when acquiring or starting a practice. Understanding each will help you request the right loan amounts and structure your funding appropriately. Common financing categories include:

1. Acquisition costs — Covers the practice purchase price, often eligible for up to 100% financing for existing practices.
2. Equipment financing — Loans specifically for medical equipment; collateral is typically the equipment itself.
3. Leasehold improvements — Funding for build-out, renovation or relocation expenses, often at competitive terms.
4. Working capital — Short-term funding for payroll, supplies and slow payer cycles; SBA lines of credit or bank lines are common.
5. Staffing and onboarding expenses — Funds to hire support staff and cover initial compensation.

Medical practice startup costs run in the hundreds of thousands of dollars (think of the equipment alone, and you’ll get an idea). Underestimating expenses is a frequent mistake; bankers expect detailed projections tied to each expense category.

James Moore assembles projected financial budgets that itemize each component so lenders can clearly see what they’re funding. This precision helps avoid loan delays or underfunding, and it strengthens lender trust in your proposal.

Funding these components separately can also yield benefits. For example, equipment loans may depreciate more quickly and offer tax advantages. Acquisition financing may enjoy longer terms. Having each element financed appropriately maximizes both tax and cash flow efficiency.

Plan your financing with clarity and confidence

In your efforts to find medical practice financing, the key is securing terms that fit your growth strategy and support your goals as a healthcare provider. Whether you’re purchasing a well-established clinic or launching a brand-new office, success depends on preparation. Lenders expect a complete financial package, accurate forecasts and a clear explanation of what the funds will support.

Comparing offers, understanding your loan structure and working with an advisor who knows the healthcare industry can help you avoid costly surprises. The right financing should give you the freedom to focus on your patients, not stress about your cash flow.

At James Moore, we guide physicians through the financing process from start to finish. We help you analyze your readiness, review lender options and structure loans that work for your needs. Contact a James Moore professional today to take this major step with confidence.

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a James Moore professional. James Moore will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.