SBA Loans for Plastic Surgeons
SBA loans for plastic surgeons can be a useful option when buying an established practice, buying out a partner or purchasing office real estate. Because the SBA backs a portion of each loan, participating lenders may be able to offer longer terms or different structures than they would on a conventional basis. That said, SBA programs come with specific eligibility rules, documentation and processes that surgeons should understand before applying.
This article explains how the main SBA programs may apply to plastic surgery practices and what lenders typically review. Program rules change over time, eligibility and terms depend on the business, the borrower, the use of proceeds, program rules and lender review, and every loan is subject to approval. Nothing here is a commitment to lend or legal, tax or compliance advice.
The Two Main SBA Programs
SBA 7(a): the SBA’s most flexible loan program. Depending on the deal, proceeds may be used for practice acquisitions, partner buyouts, working capital, leasehold improvements, equipment, refinancing certain existing debt and, in some cases, real estate.
SBA 504: designed primarily for owner-occupied commercial real estate and certain long-term fixed assets. A typical structure combines a bank loan with a second loan through a certified development company, with the borrower contributing equity.
How SBA Loans for Plastic Surgeons May Be Used
- Acquiring a practice: financing goodwill, equipment and transition working capital when buying from a retiring surgeon
- Partner buyouts: funding the purchase of a departing partner’s interest, subject to program rules on changes of ownership
- Office real estate: buying or improving a building the practice will occupy
- Build-outs: funding certain improvements, such as consultation suites or an office-based OR
- Working capital: supporting operations during a transition
Our articles on a plastic surgery partner buyout and plastic surgery office real estate explore two of these uses in more detail.
Why SBA Financing May Fit Plastic Surgery Acquisitions
Much of the value in a plastic surgery practice is often goodwill rather than buildings or equipment. SBA 7(a) loans may help lenders consider acquisitions where goodwill is a large part of the price, though the lender will still evaluate collateral, cash flow and risk. Longer repayment terms may also help keep payments manageable while a new owner builds relationships with patients.
What Lenders Typically Review
When evaluating SBA loans for plastic surgeons, lenders often look at:
- Cash flow: historical earnings and the practice’s ability to support debt service
- Revenue mix: cosmetic, reconstructive and nonsurgical revenue and how stable each has been
- Surgeon dependence: how much revenue may follow the selling surgeon
- Transition plan: how patients, staff and referral sources will be introduced to the buyer
- Borrower profile: training, experience, credit and personal liquidity
- Equity injection: the buyer’s cash contribution and its source
- Collateral: business assets and, in some cases, personal assets
Our article on plastic surgery practice down payment requirements explains how equity is generally evaluated.
Seller Notes and Earnouts
Some acquisitions include a seller note for part of the price. Seller notes are typically subordinate to the senior loan, and SBA rules set conditions on whether and how a seller note can count toward equity, including standby requirements. Lenders or programs may also limit earnouts. These details change over time and should be confirmed with the lender early in the process.
Using SBA 504 for Real Estate
For surgeons who want to own their building, SBA 504 loans may offer long-term financing for owner-occupied property and improvements. The practice generally must occupy a required portion of the building, and the property, borrower and project must meet program rules. A surgeon who plans an extensive build-out or surgical suite may find that ownership protects that investment.
Items Lenders May Ask You to Prepare
- Business and personal tax returns for recent years
- Current financial statements and a debt schedule
- A personal financial statement and resume or CV
- For acquisitions, the letter of intent or purchase agreement and seller financials
- A summary of patient deposits and prepaid packages
- Lease or real estate documents
- Projections and a description of how proceeds will be used
Plan for the Process
SBA financing involves more steps than many conventional loans, including program eligibility review, lender underwriting and, for real estate, appraisals and environmental reviews. Building that process into your purchase timeline, and keeping the seller informed, can reduce pressure near closing. Responding promptly to document requests and keeping your advisors coordinated can also help the file move forward smoothly.
SBA vs. Conventional Financing
SBA loans are not always the best fit. Conventional loans may involve less program documentation and can suit established surgeons with strong financials and collateral. SBA loans may offer more flexibility on structure for certain acquisitions. Comparing both can help you choose the right option for your situation.
Our SBA loan calculator can help you estimate payments for planning purposes only. Estimates do not represent an offer or approval.
Common Misconceptions
- SBA loans come from the government: they are made by participating lenders, with a partial guaranty from the SBA
- Any practice qualifies: eligibility depends on the business, the buyer, the use of proceeds and program rules
- No personal commitment is needed: owners are generally expected to provide personal guaranties
Final Thoughts
SBA loans for plastic surgeons can support acquisitions, partner buyouts and real estate purchases, particularly when much of a practice’s value is goodwill. Understanding program rules, preparing documentation and presenting a clear transition plan can help surgeons approach lenders with confidence.
US Medical Funding helps plastic surgeons compare SBA and conventional financing for practice acquisitions and real estate. Learn more about SBA 7(a) business and real estate loans and our full range of plastic surgery practice financing options.
