Sunny was weighing up a question many medical professionals deal with sooner or later – it was time for him to buy into a practice, and he needed to know how medical practice finance worked. My advice was simple. Given I’ve spent more than a decade helping medical professionals get finance across Australia, I’ve seen how much difference the right structure makes to a practitioner’s growth.
As the healthcare sector keeps on expanding, the lending market has evolved with it. Doctors, dentists, vets and allied health professionals now have access to far more flexible options than a standard business loan ever offered. So in this guide I’ll share what’s available, who qualifies, and how I’d approach getting you approved if you’re a medical professional looking to buy into your own practice too.
What medical practice loans actually are
Medical practice loans are business finance built specifically for healthcare professionals who want to buy into, establish, or grow a practice. They’re structured differently from an ordinary business loan because lenders genuinely love people in this profession – the income is stable, the default risk is low, and an established practice is a genuinely good security. That recognition is why lenders compete hard for the business of medical professionals, and the terms I negotiate are usually more generous than standard commercial finance. If you’re in this position it’s always the lever I use when I take a deal to market to find the right finance.
Before we move on let’s be clear about one distinction up front, because it shapes which loan you actually need. Financing the practice (the goodwill, the equipment, the working capital etc), is a different conversation from financing the actual premises themselves. This guide covers the practice side. If you’re buying or refinancing the property itself, that’s a commercial property deal, and our medical property loans page give you all the most up to date information.
On the practice side, the numbers are flexible. Loan amounts typically run from $50,000 to $15 million-plus depending on what you’re funding and your financial position, terms can stretch to 30 years on a practice acquisition so the repayments sit comfortably against your cash flow, and many specialist lenders keep the documentation lighter than a traditional business loan. Rates currently sit around 6.25% - 7.90% per annum, depending on your credit profile, the practice type and how the loan is structured.
Types of medical practice finance I arrange
Most of the practitioners I work with come to me for one of five things, and a good number need a couple of them stacked together. The largest by far is practice acquisition, where I can often arrange up to 100% of the purchase for an established practice with strong financials. Where the deal includes the building as well as the business, the property portion is structured separately as a commercial property loan, and I’ll split the financing so each part sits with the lender that prices it best. Our medical property loans page covers that property side.
Type of finance |
What it funds |
|---|---|
Practice acquisition |
Buying into an existing practice, including goodwill, equipment and the patient base. Up to 100% for established practices. |
Equipment finance |
Diagnostic gear, surgical instruments or practice-management software, usually as hire purchase or commercial hire. |
Expansion finance |
The next consulting room, a second location, or extra staff as the practice grows. |
Working capital |
Smoothing seasonal dips and unexpected costs without disrupting day-to-day operations. |
Fit-out and renovation |
The environment your patients experience, which specialist medical lenders understand and price for. |
Who qualifies for a medical practice loan
Medical practice finance is open to a wide range of healthcare professionals, not just doctors. I regularly arrange it for general practitioners and specialists, dentists and dental specialists, veterinarians, physiotherapists, chiropractors, psychologists, pharmacists, optometrists and allied health professionals more broadly. If you’re AHPRA-registered or registered with your relevant professional body, you’re very likely in scope.
What lenders look for is fairly consistent. They want to see current professional registration, a stable income history, usually around two years of financials for an established practitioner, and a clean credit record without defaults or bankruptcies. For an acquisition, they’ll also assess the target practice itself, its financial performance, patient base and location, because they’re lending against its viability as much as yours. And while some lenders will go to 100%, having a deposit of 10 to 20% almost always unlocks better terms. New graduates aren’t shut out either, though the terms differ; you’ll typically need to show secure employment or provide a guarantee.
The medical practice loan application process
The process is more straightforward than most practitioners expect, largely because I handle the parts that eat your time. It starts with a proper assessment of where you are and what you’re trying to do, your financial position, your goals for the practice, and which of my 60-plus lenders actually fit your situation. That lender match matters more than anything else, because each one has a different appetite for practice type, loan size and borrower profile, and going to the right one first is what protects your credit file and speeds the whole thing up.
From there I’ll tell you exactly what to pull together. A medical practice application generally needs:
- Your professional registration certificates
- Practice financial statements, usually two to three years
- Personal financial statements and tax returns
- Bank statements
- A practice valuation, for acquisitions
- Equipment quotations, for equipment finance
Once the file’s complete, I submit to the chosen lender and manage the assessment, which usually runs two to four weeks while they evaluate your capacity, the practice viability and any security. Pre-qualification can often come back inside 48 to 72 hours. On approval you’ll get a formal offer, and once you accept, settlement typically follows within seven to fourteen days.
Specialist medical lenders vs your bank
I’ll be direct here, because it’s one of the most useful things I can tell a practitioner: for medical finance, a specialist lender almost always produces a better outcome than walking into your own bank. Specialist lenders understand how a practice actually works, and that understanding shows up across the deal.
Specialist medical lender |
Major bank |
|
|---|---|---|
Maximum LVR |
Higher, often up to 100% for established practices |
More conservative |
Approval speed |
Faster, streamlined for medical applications |
Slower, standard business process |
Lending criteria |
More flexible, built around practice income |
Stricter, generic business assessment |
Practice valuation |
Values the practice properly, including goodwill |
Treats it like any other small business |
Your bank can do a clean, simple deal well enough, but the moment there’s anything specific about your situation, a specialist’s understanding is what gets it across the line on good terms.
The catch is that there are a lot of them, each with different strengths, and you can’t easily see from the outside which one suits your deal. That’s the part I handle, matching your application to the lenders most likely to write it competitively, rather than you applying around and marking your credit file each time.
Medical practice loan costs and fees to watch
Rate is only part of the cost, and I’d rather you saw the whole picture before you commit. Your rate itself moves with a few things: whether you fix or stay variable, the loan amount (larger loans often price better), the term, and the security on offer. Beyond the rate, budget for the usual fees, an application fee that runs from a few hundred to a couple of thousand dollars (though many specialist lenders waive it), a valuation fee of roughly $1,500 to $5,000 on an acquisition, and legal and documentation costs of around $1,500 to $3,000. Some lenders add a modest monthly service fee, and fixed-rate loans can carry break costs if you repay early during the fixed period.
None of these are necessarily fixed in stone, and part of my job is getting the negotiable ones reduced or waived as part of placing the deal.
Giving your application the best shot
The practitioners who get the sharpest terms are usually the ones who prepare well, and the preparation isn’t complicated. Keep your credit clean and fix any errors on your report before you apply. Build a deposit if you can, because it demonstrates responsibility and lowers the lender’s risk. Keep your financial records, personal and practice, organised and current. And lean on professionals who know this space, a good accountant and broker pay for themselves in better terms and faster approvals.
If you’re acquiring a practice, the due diligence matters just as much as your own numbers. Get a proper valuation from someone who appraises medical practices specifically, analyse the practice’s real financial performance rather than the headline figures, and have a clear plan for holding onto patients and staff through the transition. Lenders lend with more confidence when they can see you’ve genuinely understood what you’re buying.
The mistakes I see practitioners make
A few patterns come up again and again, and they’re all avoidable.
The most common is thin due diligence on an acquisition, taking the financials at face value, underestimating how much the location and local demographics matter, or missing that key equipment is near the end of its life.
The second is overlooking the true cost of ownership: the legal, accounting and valuation fees, the stamp duty and government charges, the insurance, and the ongoing operating costs that sit well beyond principal and interest. The third is under-insuring, leaving the practice and the loan exposed without adequate professional indemnity, public liability, building and income protection cover in place.
Can you refinance medical practice finance?
Yes, and it’s worth reviewing periodically. Refinancing a medical practice loan can secure a lower rate, better terms, or release funds for expansion, and the process usually runs three to four weeks. The one thing to weigh is whether your current loan carries exit or break costs, which I’ll factor into the numbers before recommending a move. If the property itself is involved, that’s a commercial refinance, and our commercial property refinancing page covers that side.
Where to start
Medical practice finance is one of the clearest paths a healthcare professional has to ownership and growth, and the right structure genuinely changes what’s possible. The work is in understanding your specific situation, matching it to the right lender, and preparing properly before you apply, which is exactly what I do.
With more than 60 specialist lenders on my panel and over a decade arranging finance for healthcare professionals, I can usually tell you quickly what’s achievable for your situation. If you’re buying the premises as well as the practice, start with our medical property finance page; if it’s the practice itself, let’s talk.
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About the Author: Nadine Connell is co-founder and director of Smart Business Plans, and is a medical finance loan expert. Learn more about Nadine.
This article provides general information about medical practice loans in Australia and should not be considered personalised financial advice. Always consult with qualified financial professionals before making significant financial decisions.
