Buying or building a medical or dental practice is one of the most financeable transactions in SBA lending. Healthcare practices have stable, recurring demand and historically low default rates, so lenders treat them favorably — and the 7(a) and 504 programs can fund practice acquisition, equipment, buildout, and the building itself. Jaken Finance Group helps providers get matched to practice SBA financing and can bridge a time-sensitive deal. Request commercial financing or call (833) 264-7776.
Why healthcare is a favored SBA category
Lenders compete for medical and dental practice loans for good reason: patient demand is resilient across economic cycles, established practices carry recurring revenue, and the category’s default rates are historically low. That translates into favorable terms — competitive down payments (sometimes as little as 10%) and long amortization — for a profitable practice with clean collections. Few small-business types finance as smoothly.
What SBA financing covers
- Practice acquisition — buying an existing practice, including its goodwill and patient base (7(a))
- Equipment — chairs, imaging, lab, and clinical equipment
- Office buildout — leasehold improvements for a new or expanded location
- Working capital — to bridge the transition and fund operations
- Real estate — the building you practice from, via 504 or owner-occupied financing
A single 7(a) can wrap the acquisition, equipment, and working capital; add a 504 when you own the property and want a long-term fixed rate.
Underwriting a practice acquisition
Practice deals hinge on the durability of collections and a clean transition:
- Collections and profitability — consistent revenue and reasonable overhead
- Provider production — how much the departing and remaining providers generate
- Patient base and payer mix — the balance of insurance, private-pay, and government payers
- Transition plan — whether the selling provider stays on for a handoff, which materially de-risks the deal
- Buyer background — clinical credentials plus the business capacity to run a practice
A profitable practice with stable collections and a thoughtful transition is among the strongest SBA files a lender will see.
De novo (startup) practices
Opening a new practice from scratch is harder than acquiring one — there’s no collections history to underwrite — but it’s still financeable with a strong plan, relevant experience, and adequate equity. Expect more scrutiny and a larger equity requirement than a practice acquisition. Many providers who intend to own ultimately find that buying an existing practice is both easier to finance and faster to cash flow than building one.
Associate-to-owner and partner buy-ins
A common and highly financeable path is the associate buying into or acquiring the practice where they already work. Because the associate knows the patients, the staff, and the collections firsthand, and the selling provider often stays on through a transition, the deal carries unusually low risk — lenders see continuity of revenue and a smooth handoff. The same logic applies to a partner buyout, where one provider acquires a departing partner’s share of an established group. SBA 7(a) finances both: the buyer’s share of the practice value (including goodwill), any equipment, and working capital, typically with modest equity given the stability of a known, cash-flowing practice. These insider transitions are among the smoothest deals in SBA lending precisely because the buyer isn’t a stranger to the business — the collections history is real, the relationships are intact, and the transition risk is minimal. If you’re an associate or partner with a path to ownership, an SBA-financed buy-in is often the most capital-efficient way to become an owner, and it usually finances faster than an outside acquisition.
Down payment and terms
Practice acquisitions often see about 10% down, with strong deals sometimes lower given the category’s stability; real estate and de novo startups may require more. Terms run up to about 10 years for a practice-and-equipment loan and toward 25 years when real estate is included; 7(a) pricing floats with prime (about 6.75% in Q3 2026) plus a capped markup. Confirm current terms at application.
When a practice sale can’t wait
Retiring providers and competing buyers set the timeline, not the SBA’s 45–90+ day calendar. Jaken Finance Group can bridge the acquisition now and let the SBA loan take out the bridge once approved — the bridge now, SBA later approach.
How practices are valued
Practice acquisitions are typically priced as a percentage of annual collections. Dental practices often trade in the range of 60%–80% of collections — higher for strong, well-located, well-equipped practices — while medical practices vary more widely by specialty, payer mix, and how much value sits in ancillary services versus provider labor. Lenders confirm the asking price against this benchmark and against the practice’s actual cash flow, and an independent valuation is generally part of a change-of-ownership file. What makes healthcare such a favored SBA category is the combination of resilient demand, recurring patients, and historically low default rates, which supports competitive terms — sometimes notably low equity on a strong practice acquisition. Present clean collections reports, a production breakdown by provider, the payer mix, and a clear transition plan, and a practice deal becomes one of the smoothest and most competitively-priced files an SBA lender will underwrite.
Get matched for a practice SBA loan
Acquiring, starting, or expanding a medical or dental practice? We’ll help you pursue the right SBA structure — and bridge it if timing is tight. Request commercial financing or call (833) 264-7776.
Program details: SBA — loan programs. Rates and rules change; verify current terms at application. Jaken Finance Group helps healthcare providers get matched to SBA financing and can bridge time-sensitive practice deals.