A chiropractic practice is usually bought with an SBA 7(a) loan, sometimes SBA Express for a smaller practice, with the buyer putting in at least 10% of total project costs and the seller often carrying a note. Lenders expect a licensed chiropractor to own and run the practice, subject to state rules on who may own one, and their main questions are how much of the practice depends on the selling doctor, how collections split between cash, insurance and personal injury cases, and whether billing and documentation will stand up to a payer audit. Personal injury receivables get the least credit, because they are paid only when cases settle.
- Usual financing
- SBA 7(a); SBA Express for loans up to $500,000
- Buyer equity (SBA)
- At least 10% of total project costs
- Who can buy
- A licensed chiropractor, or a group with one running the practice
- Collections lenders trust most
- Cash-pay and commercial insurance, collected and not just billed
- Collections lenders discount
- Personal injury cases paid at settlement
The practice is usually the doctor
In a typical practice the selling chiropractor sees most of the patients, and many of those patients chose the practice for that doctor. The lender's first worry is therefore not the P&L but the handover: when the seller leaves, how many patients stay with a new doctor they have not met?
Lenders answer it from the evidence. A practice with associate doctors who treat a real share of visits, and who are staying, is less dependent on the seller. So is a practice whose patients come through referrals, insurance networks or a strong local brand rather than the seller's personal following. The strongest case of all is an associate buying the practice they already work in: the patients already know the buyer, and the lender can see the buyer's own visits and collections in the practice's reports.
SBA's rules bound the seller's role. In a complete change of ownership the seller may not stay on as an owner, officer or employee, but may consult for up to 12 months, or up to 24 months under SOP 50 10 8.1 from 1 October 2026 (see the seller-transition rule). A written transition plan, with introductions, overlap in the schedule and a seller who is committed to the handover, is part of what a lender is underwriting. Buying a share of the practice from a partner, rather than all of it, follows different SBA rules; see financing a partner buyout.
The chiropractor who will run the practice must be licensed in its state before closing, and some states limit who may own a practice at all. A lender will not fund a practice its new owner cannot legally run.
Where the collections come from
Chiropractic revenue comes through several channels that pay at very different speeds and with very different certainty. Lenders rebuild the practice's collections, not its charges, by payer channel, from the practice management software and the bank deposits.
| Payer channel | How it pays | How lenders view it |
|---|---|---|
| Cash-pay visits and care plans | At the visit, or by monthly draft on a plan | The cleanest revenue; prepaid plans the buyer must honor are a liability |
| Commercial insurance | After claims are processed, subject to visit limits and medical-necessity review | Reliable if denial rates are low and the buyer is credentialed with the same plans |
| Medicare | Covers a narrow set of services with strict documentation rules | Credited, but documentation is examined because recoupments follow audits |
| Personal injury and auto claims | Often on a lien or letter of protection, paid when the case settles | Discounted or excluded; receivables can age for a long time and settle for less than billed |
| Workers' compensation | Through the employer's carrier, on the state's fee schedule | Credited if steady; referral sources matter |
Personal injury work deserves its own conversation. A practice with a large personal injury share can show strong billings and a large receivables balance, but the cash arrives only when attorneys settle cases, often at a reduction, and depends on referral relationships with law firms that may not transfer to a new owner. Lenders commonly look at personal injury collections actually received over several years rather than billed amounts, and they will not treat the receivables balance as dependable collateral. If the seller keeps the pre-closing receivables, which is common in an asset purchase, the buyer also starts with a gap in cash while new cases work through.
Care plans sold as prepaid packages of visits create the opposite problem: cash the seller has banked for visits the buyer will deliver. Lenders ask for a schedule of unused prepaid visits and expect it to be settled in the price, in the same way as the working capital peg.
Visits, new patients and what the reports show
Beyond dollars, lenders read the practice's activity: patient visits per week over time, new patients per month, how many visits a typical case runs, and where new patients come from. A practice whose new-patient flow depends on screenings, paid advertising or a referral source the seller personally maintains is more fragile than one fed by steady referrals and returning patients. Falling new-patient numbers behind stable collections usually mean the practice is living on its existing patients, which a lender will notice in the trend even if the latest year looks fine.
Lenders then normalize earnings for the new owner. They add back the seller's own pay and documented personal or one-off costs (see add-backs), then deduct a market salary for the buying chiropractor, because the buyer's household lives on the practice too. In plain numbers: earnings before any doctor pay of 400, less a buyer's salary of 160, leaves 240 for debt service; payments of 192 give coverage of 1.25x. SBA's minimum debt service coverage is 1.15x, and 1.0x globally once personal income and debts are counted; from 1 October 2026 a change of ownership must show 1.25x on historical results. Student loans and other personal obligations go into that global cash flow test, so they belong on the buyer's personal financial statement from the start.
Compliance, credentialing and the practice's history
- Billing and documentation. Insurance and Medicare payments depend on notes that support medical necessity. If documentation is thin, payers can recoup past payments after an audit. Lenders ask whether the practice has had audits, recoupments or payer complaints, and some ask for a coding review as part of diligence.
- Asset purchase protection. Most practice sales are asset purchases, which leave most of the seller's past liabilities, including recoupment claims, with the seller's entity. Our page on asset versus stock purchases explains what changes for the lender.
- Credentialing. The buyer needs to be credentialed with the practice's insurance plans. Until that is done, claims can be delayed or denied, and collections dip just as the new loan's payments start. Starting credentialing early, and including working capital in the loan to cover the lag, answers the lender's question; see working capital at close.
- Non-compete and patient records. The purchase agreement should transfer patient records under the state's rules and include the seller's agreement not to open nearby. Lenders read both, because a seller practicing down the road takes patients with them.
- The lease. Patients return to a location. Lenders want the lease assigned with the landlord's consent and running as long as the loan; see why the lease matters.
How the purchase is usually structured
Most chiropractic practices are small enough that the loan sits comfortably inside SBA's limits, and many are small enough for SBA Express, which goes up to $500,000 with a 50% guaranty. The practice's size, and whether the office comes with it, decides the rest.
| Situation | Usual route | What changes |
|---|---|---|
| Smaller practice, leased office | SBA Express or a small SBA 7(a) loan | Express carries a 50% guaranty against 85% on 7(a) loans of $150,000 or less and 75% above, so lenders choose it selectively |
| Larger or multi-doctor practice, leased office | SBA 7(a) | Up to 10 years for goodwill, equipment and working capital |
| Practice plus the office building or condo | SBA 7(a) with a real estate share, or 7(a) for the practice and SBA 504 for the property | The real estate share of a 7(a) loan can run up to 25 years, lowering the annual payment |
| Associate buying their employer's practice | SBA 7(a) | The buyer's own track record in the practice strengthens the file |
| Buyer adding a second practice | SBA 7(a) or a conventional loan | The lender underwrites both practices together |
- Equity. At least 10% of total project costs for a complete change of ownership; see the equity injection.
- Seller note. Up to half of the injection can come from a seller note on full standby for the life of the SBA loan. A note that pays currently is allowed but counts as debt.
- No earnout. SBA prohibits an earnout to the seller in a change of ownership it finances, so the price cannot depend on post-closing collections.
- Valuation. Where the amount financed, less appraised real estate and equipment, exceeds $250,000, SBA requires an independent business valuation, and the loan for the purchase cannot exceed it.
- From 1 October 2026. Financial due diligence is required on every change of ownership, and change-of-ownership loans amortize over no more than 10 years except the real estate share.
Every owner of 20% or more personally guarantees the SBA loan. For the choice between routes more generally, see SBA 7(a) versus a conventional loan and SBA 7(a) versus Express; for buying the building, acquisitions that include real estate.
The file a lender needs
Transparent's SBA acquisition checklist, with what a practice lender adds:
- Business tax returns, 2–3 years, and the extension if the latest year isn't filed
- P&L and balance sheet for the latest full year (never an older year), and a year-to-date P&L through last month-end
- Debt schedule, with copies of notes being paid off at closing
- Personal tax returns, 2–3 years, and a personal financial statement for each buyer owning 20% or more
- The letter of intent
- Collections by payer channel and by provider, by month, from the practice management system
- Visit counts and new patients by month
- Accounts receivable aging, with personal injury cases shown separately
- The schedule of prepaid care plans and unused visits
- The buyer's license, credentialing status and resume (supports Form 1919)
- The lease and any associate agreements
When those are in, Transparent builds the full lender package — financing model, lender presentation, blind teaser and underwriting memo — in a day; by hand, the same package takes at least a week. The model separates collections by payer channel and shows the personal injury share openly, which is the first thing an experienced practice lender looks for. It goes to lenders in our book that finance healthcare practices at this size; 278 of the book's lenders write SBA 7(a) and 504. See the package, and our SBA data page for chiropractic offices for the SBA lending record in this industry. Related practice pages: physical therapy, dental and medical.
Common questions
- Do I have to be a chiropractor to buy a chiropractic practice?
- In practice, lenders want a licensed chiropractor as the owner running the practice. State rules on who may own a chiropractic practice vary, and the lender will follow them, but a non-clinical buyer relying on hired doctors faces a much harder credit question.
- Will lenders count personal injury receivables?
- Only cautiously. Because personal injury cases pay at settlement, often at a reduction, lenders commonly look at what was actually collected over several years and do not treat the receivables balance as dependable collateral.
- Can I use SBA Express to buy a small practice?
- Yes, for loans up to $500,000, if a lender that writes Express will take the file. The equity injection, seller-note, valuation and seller-transition rules for a change of ownership apply either way.
- Can the selling chiropractor keep treating patients after the sale?
- Not as an employee under an SBA-financed complete change of ownership. The seller may consult for up to 12 months, or up to 24 months under SOP 50 10 8.1 from 1 October 2026. A conventional lender may allow a longer role.
- What happens to the practice's receivables at closing?
- In most asset purchases the seller keeps receivables for services before closing. The buyer then starts with no collections in the pipeline, which is why lenders often include working capital in the loan.