Physician practices borrow through SBA mostly to start, equip and expand: 1,771 7(a) loans to offices of physicians between October 2023 and June 2026, about $1 billion from 281 lenders, at a median of $250,000 and a median rate of 10%. A quarter of the loans, 24.6%, went to start-ups, and 30% were SBA Express. Purchases of existing practices were rare, 51 loans or 2.9%. Lenders decide on the physician's training and production record, the payer mix, how collections track billing, and whether the practice can carry payments while insurance contracts ramp up.
| Measure | Offices of Physicians (except Mental Health Specialists) | All industries |
|---|---|---|
| SBA 7(a) loans approved | 1,771 | 162,355 |
| Median loan | $250,000 | $150,300 |
| Middle half of loans | $100,000 – $603,300 | $50,000 – $500,000 |
| Loans of $1 million or more | 16% | 12.9% |
| Median rate at approval | 10% | 10.25% |
| Middle half of rates | 8.53% – 11.25% | 9.3% – 11.25% |
| Acquisitions (change of ownership) | 51 (2.9%) | 16,849 (10.4%) |
| Median acquisition loan | $564,700 | $693,000 |
| Lenders that made these loans | 281 | 1,648 |
| SBA 504 loans (real estate, equipment) | 336 | 16,714 |
Approvals FY2024 – FY2026 to date (1 Oct 2023 – 30 Jun 2026), cancelled loans excluded. Source: SBA 7(a) and 504 FOIA loan records, as of June 30, 2026.
- SBA 7(a) loans approved
- 1,771 (Oct 2023 – Jun 2026)
- Lenders that approved one
- 281
- Median loan
- $250,000
- Median rate at approval
- 10%
- Start-ups
- 24.6% of loans
- Practice purchases
- 51 loans (2.9%), median $564,700
What SBA lenders approved for physicians
Offices of physicians (NAICS 621111: primary care and specialist practices, excluding mental health specialists) took 1,771 SBA 7(a) loans from FY2024 through June 2026, worth $1,000,935,600, from 281 lenders. The median loan was $250,000, the middle half ran from $100,000 to $603,300, and the top tenth started at $1,450,000. 284 loans (16%) were $1 million or more.
Two figures stand out against the rest of the program. The acquisition share is 2.9%, a fraction of the national 10.4%. And 30% of the loans were SBA Express, which tops out at $500,000 with a 50% guaranty. Put together with a start-up share of 24.6%, the picture is of doctors borrowing to open offices, buy equipment and fund working capital, not to buy each other out.
| Figure | Physician practices | What it tells you |
|---|---|---|
| Median loan | $250,000 | Above the national $150,300: equipment and build-outs |
| Middle half of loans | $100,000 to $603,300 | Working capital and equipment at the low end; new offices and real estate at the top |
| Loans of $1 million or more | 284 (16%) | Real estate, larger build-outs and major equipment |
| Median rate at approval | 10% (middle half 8.53% to 11.25%) | Slightly under the national 10.25%, with a wide spread |
| Fixed-rate share | 21.6% | More than one loan in five fixed; the rest float |
| Start-ups | 24.6% of loans | Physicians opening their own offices |
| SBA Express | 30% of loans | Smaller needs on the lender's own credit process |
| Acquisitions | 51 loans (2.9%), median $564,700 at 9.5% | Practices rarely change hands through SBA |
| Median jobs supported | 5 | A physician and a small clinical and billing staff |
Why so few practice purchases
In dentistry, one dentist buying another's practice is ordinary. In medicine it is less so. Many physician practices are sold to hospital systems and larger physician groups, buyers that typically finance outside SBA, and many retiring physicians close their practice or fold their patients into a colleague's rather than sell. The 51 purchases in these figures, at a median of $564,700 and 9.5%, are the exceptions: often a physician buying the practice they already work in, or a practice with a dedicated patient base and equipment worth paying for.
A physician buying a practice meets SBA's full acquisition rules: an equity injection of at least 10% of total project costs, a seller note counting toward half of it only if it is on full standby for the life of the loan, no earnout, and a seller who may consult for up to 12 months but not stay on as an owner, officer or employee. From 1 October 2026 the consulting period can run to 24 months, which matters in a practice where patients follow the physician. A physician buying into a practice as a partner, rather than buying all of it, is under SBA's rules for a partial change of ownership instead. See financing a medical practice acquisition and SBA seller transition rules.
In a practice purchase, the lender is pricing how many patients stay with the practice once the selling physician's name comes off the door.
Opening a practice: what the lender underwrites
A quarter of physician loans went to practices that had not yet opened. With no history to test, the lender underwrites the physician and the plan. SBA requires an equity injection of at least 10% of total project costs for a start-up, and every owner of 20% or more personally guarantees the loan.
- The physician's record. Board certification, years in practice, and ideally production figures from prior employment. A physician leaving a group with a known patient following is a different credit from one finishing residency.
- Payer credentialing. A new practice cannot bill most insurers until it is credentialed with them, and claims are paid after the visit. Lenders size working capital to carry payroll and rent through that gap, and a budget that assumes full collections from the first month will be sent back.
- Restrictive covenants. A non-compete from the physician's former employer can limit where the new office can open and which patients can follow. Lenders ask to see it.
- The build-out and equipment budget. Exam rooms, procedure space and diagnostic equipment. Equipment can take up to 10 years, or 15 if its useful life supports it.
- Referral sources. Specialists depend on referrals from primary care and hospitals. A projection should show where the first patients come from.
Owner compensation matters for coverage. SBA requires debt service coverage of at least 1.15x, and 1.0x globally once the owners' personal obligations are included. A physician who needs to draw a salary to meet their own obligations reduces the cash available to the loan, and lenders count it. See global cash flow.
How lenders read an established practice
For a practice with history, the question is the quality of the revenue. Medical billing runs through several layers of adjustment between what a practice charges and what it collects, and lenders underwrite the last number, not the first.
| What the lender looks at | Why it matters |
|---|---|
| Collections against charges | Gross charges overstate revenue; contractual adjustments and denials come off before the money arrives |
| Payer mix | Medicare, Medicaid and commercial plans pay different rates; a practice heavy in one program carries that program's rate risk |
| Days in receivables | Slow collection points to billing problems and ties up the working capital the loan may be asked to fund |
| Production by provider | How much of the revenue depends on the owner, and how much on associates and mid-level providers |
| Ancillary revenue | Imaging, labs and in-office procedures can be profitable and can also change with reimbursement rules |
| Malpractice history and licensing | Claims and board actions go to whether the physician can keep practicing through the loan |
Practices with steady receivables from insurers also have a working capital option beyond a term loan. See lines of credit for medical practices. A practice that has been living on merchant cash advances should know that SBA will not refinance an active advance, and from 1 October 2026 an advance becomes eligible only once converted to a term loan that has amortized for at least 24 months with no new advance since. See refinancing cash advances for medical practices.
SBA Express and the medical office building
Almost a third of physician loans were SBA Express. Express suits a defined, smaller need — an ultrasound machine, a second location's fit-out, working capital — up to $500,000, on the lender's own credit process, with SBA guaranteeing 50% rather than the 85% or 75% of a standard 7(a). The lower guaranty is why some lenders ask more of an Express borrower than the size of the loan suggests. See SBA 7(a) vs SBA Express.
At the other end, SBA 504 financed 336 physician projects at a median of $894,500, mostly practices buying or building their own offices. 504 is typically 50% from a bank, 40% from a CDC and 10% from the borrower, and the practice must occupy at least 51% of an existing building or 60% of new construction. A physician who owns a building and leases part of it to other practices can use 504 as long as the practice occupies enough of it. See SBA 7(a) vs SBA 504.
Preparing a physician practice file
The SBA list: 2–3 years of business tax returns, a P&L and balance sheet with a year-to-date P&L through last month-end, a debt schedule with copies of notes being refinanced, personal tax returns and a personal financial statement for each owner of 20% or more, and the physician's CV to support Form 1919. A start-up adds a business plan with a use-of-proceeds narrative and a projection that shows the credentialing gap honestly.
Beside those, lenders ask for practice-management reports: charges, adjustments and collections by month, payer mix, receivables aging by payer, and production by provider. Include the office lease, equipment quotes and any employment agreement or non-compete that binds the physician. Transparent builds the file into a full lender package — financing model, lender presentation, blind teaser and underwriting memo — in a day once the documents are in, and takes it to the lenders in its book that write SBA 7(a) and 504, 278 of them. On SBA loans the lender pays Transparent, not the borrower. See how we underwrite.
Common questions
- Can a doctor get an SBA loan to start a practice?
- Yes. 24.6% of SBA 7(a) loans to physician practices went to start-ups. Lenders look at the physician's training and production record, the site, a projection that allows for insurance credentialing, and an equity injection of at least 10% of total project costs.
- What rate do physicians get on SBA loans?
- The median rate at approval from October 2023 to June 2026 was 10%, against 10.25% nationally, with the middle half between 8.53% and 11.25%. 21.6% of the loans were fixed-rate; the rest float with the base rate.
- Is an SBA loan the best way to buy a medical practice?
- It depends on the practice and the buyer. SBA requires at least 10% equity and a personal guarantee, prohibits an earnout and limits the seller's transition role. Some buyers use conventional loans instead. Only 2.9% of physician SBA loans financed a purchase.
- Do lenders underwrite charges or collections?
- Collections. Charges are what the practice billed; collections are what it received after contractual adjustments and denials. Lenders also look at payer mix and days in receivables.
- Can I buy my medical office building with an SBA loan?
- Yes, through 7(a) or 504. SBA 504 financed 336 physician projects at a median of $894,500. The practice must occupy at least 51% of an existing building, or 60% of new construction.