Orthopedic Practice Acquisition Loan Options
An orthopedic practice acquisition loan can help a surgeon or group purchase an existing practice without paying the full price in cash. Because orthopedic transactions often include goodwill, equipment, ancillary services and sometimes real estate, choosing the right loan structure can make a meaningful difference in monthly payments and long-term flexibility.
This guide compares the main financing options and explains what lenders typically review. Program rules and lender requirements change, every loan is subject to approval, and nothing here is legal, tax or compliance advice or a commitment to lend.
What an Orthopedic Practice Acquisition Loan Can Cover
Depending on the program and lender, acquisition financing may help pay for:
- Goodwill and the value of the existing patient base
- Furniture, fixtures and clinical equipment, including imaging and therapy equipment
- Accounts receivable, if purchased as part of the deal
- Working capital to support the transition
- Real estate, if the building is included in the purchase
- Closing costs and certain professional fees
What can be included depends on the structure of the deal, program rules and lender review.
SBA 7(a) Loans
SBA 7(a) loans are often considered for practice acquisitions because they can finance goodwill and may combine the purchase price, working capital and, in some cases, real estate into one loan. They may also offer longer repayment terms than some conventional options.
SBA loans come with program requirements, including rules on equity injection, seller financing, personal guarantees and how proceeds can be used. Eligibility and terms depend on the business, the buyer, use of proceeds, program rules and lender review.
Conventional Practice Loans
Conventional practice loans follow a lender’s own underwriting standards rather than a government program. They may suit surgeons with strong credit, established production and adequate liquidity, and they can sometimes offer more flexibility in structure.
Some lenders that specialize in healthcare understand the earnings potential of surgical specialties and may evaluate a surgeon’s production history alongside the practice’s financials.
Real Estate Financing
If the purchase includes the medical office building, the property may be financed together with the practice or separately. Options may include an SBA 7(a) loan, an SBA 504 loan for owner-occupied real estate or a conventional commercial real estate loan.
Many orthopedic groups hold real estate in a separate entity that leases the building to the practice. The best structure depends on tax, liability and partnership considerations, which an accountant and counsel can help evaluate.
Seller Financing
In some deals, the seller agrees to receive part of the price over time through a promissory note. Seller financing can help bridge gaps between price and available financing. Seller notes are typically subordinate to senior debt, and lenders and SBA program rules may limit how seller notes and earnouts can be structured.
Existing Equipment Debt and Leases
Orthopedic practices often carry financing or leases on imaging, therapy and surgical equipment. Buyers should identify these obligations early, because they may need to be paid off at closing, assumed with the lender’s consent or refinanced as part of the new loan. How they are handled can change the total amount you need to borrow.
Comparing Your Options
- Goodwill financing: SBA 7(a) and some conventional lenders may finance goodwill, subject to their criteria
- Equity required: varies by program, lender and the strength of the deal
- Repayment terms: differ by loan type and collateral
- Collateral and guarantees: personal guarantees are typical, and lenders may take liens on business assets
- Flexibility: conventional loans may allow more customized structures, while SBA loans follow program rules
You can estimate payments using our SBA loan calculator. Estimates are for planning only and do not represent an offer or approval.
What Lenders Typically Review
For an orthopedic practice acquisition loan, lenders generally consider:
- Several years of the practice’s tax returns and financial statements
- Production by surgeon and service line, including ancillaries
- Payer mix and collections history
- The buyer’s training, experience, production history and credit
- Personal financial statements, liquidity and existing debt
- The purchase agreement and transition plan
- A business plan or projections showing how debt will be repaid
Our guide to orthopedic practice loan requirements covers documentation in more detail.
Structuring Around Transition Risk
Orthopedic acquisitions carry specific risks that lenders consider. Revenue may depend heavily on the selling surgeon. Payer contracts, Medicare and Medicaid enrollments and credentialing should not be assumed to transfer, and collections may slow while they are updated.
Lenders may look for a documented transition period, retention of key staff and enough working capital to cover the gap between closing and stable collections. Building these into the deal can strengthen a loan request.
Before You Apply
Lenders tend to respond better to a well-prepared request. Before applying:
- Get a signed letter of intent outlining price and structure
- Gather the practice’s financial records and your personal financial documents
- Prepare a summary of your clinical background and production
- Outline your transition plan, including referral relationships and staffing
- Have counsel and an accountant review the deal structure
If you are still evaluating whether a practice is the right fit, our guide on buying an orthopedic practice walks through the broader due diligence process.
Final Thoughts
The right orthopedic practice acquisition loan depends on the purchase price, what is included in the deal, your financial profile and your long-term plans. Comparing SBA, conventional, real estate and seller financing options, and preparing a strong application, can help you move toward ownership with a structure that fits.
US Medical Funding helps orthopedic surgeons compare and arrange acquisition financing. Learn more about our orthopedic practice acquisition financing.
