Can You Get an SBA 7(a) Loan for a Medical Practice?
Right now, there are over 230,000 medical practices in the United States, and if you’re a doctor looking to start, purchase, or expand your medical practice, an SBA 7(a) loan could be the perfect choice. SBA 7(a) loans are available for all kinds of medical practices, including physical therapy practices and pharmacies, and may also be available for chiropractic practices, especially those that offer medical care.
SBA 7(a) loans are offered by a variety of different lenders, including banks, credit unions, and online lenders. They offer terms up to 25 years for commercial real estate, and loan terms as large as $5 million. These loans can also be used for purchasing medical equipment as well as funding working capital for expenses such as marketing and employee salaries.
Specifically, SBA 7(a) loans can be used for:
Buying out a partner: When one or more doctors decide to retire from a practice or move to another location, it’s common for the other partner or partners to purchase their stake in the practice— but they might not always have the cash to do so, and an SBA 7(a) loan may be able to help.
Building a new medical practice: Almost all new construction costs can be funded by an SBA 7(a) loan, including furniture, lighting, security systems, and even landscaping.
Refinancing a medical practice: SBA 7(a) loan funds can be used for refinancing the debt on a current medical practices, with some restrictions.
Buying or expanding a medical practice: SBA 7(a) loans can be used to purchase existing medical practices, or to expand a medical practice that you currently on.
Financing equipment purchase: Doctors and certain other medical professionals can use SBA 7(a) loans to purchase medical equipment, but usually only as part of a larger SBA 7(a) loan.
In addition to SBA 7(a) loans, larger medical practices may be interested in looking into SBA 504 loans. SBA 504 loans have a slightly larger maximum loan amount than SBA 7(a) loans, at $5.5 million, and are specifically designed to finance commercial real estate transactions.