Why Healthcare is a Favored SBA Category
Medical and dental practices have historically posted some of the lowest default rates in the SBA portfolio. The combination of recession-resistant demand, recurring patient revenue, and licensed-professional barriers to entry makes healthcare a strong underwriting category. Many SBA Preferred Lenders run dedicated healthcare desks with delegated authority and accelerated turn times.
Use cases: practice acquisition (existing practice including patient charts and goodwill), medical office building purchase (504), equipment (imaging, dental chairs, lab), practice startup or relocation, and partner buyouts.
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Sector-specific underwriting, key metrics, and lender appetite.
Practice Acquisition
Medical Real Estate
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How SBA Loans Work for Medical Practices
The most common deal: a licensed physician, dentist, or veterinarian buys an existing practice from a retiring owner using an SBA 7(a) loan. The structure typically finances 90% of the purchase price (10% buyer injection) including all goodwill, patient list value, equipment, and working capital. The SBA permits 100% financing of business goodwill through 7(a), which no conventional commercial loan will do.
If the deal includes the underlying real estate (a free-standing medical or dental building), the structure shifts to a 504+7(a) stack: 504 for the building, 7(a) for the practice goodwill and equipment. This combination can finance a $3M practice + $2M building deal with as little as $500K equity.
Equipment Financing
Medical and dental equipment — imaging suites, CBCT scanners, intraoral systems, chairs, autoclaves — can be financed under either 7(a) (as part of practice acquisition) or as standalone equipment loans. For high-value imaging equipment ($300K+), the SBA's 10-year amortization on equipment-only 7(a) loans is often more attractive than vendor financing.
Practice Startup vs Acquisition
SBA lenders strongly prefer practice acquisitions over de novo startups. An acquired practice comes with proven patient flow, predictable revenue, and a transferable referral base. Startups require deeper pro forma analysis, larger borrower injection (often 20-25%), and personal financial strength to bridge the ramp-up period.
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