Medical and dental practice loans
A medical practice loan is a business loan secured against the practice itself — its patient base, its goodwill and its equipment — rather than against your home. For doctors, dentists and vets, lenders will consider up to 100% of the purchase price of an established practice, subject to credit approval.
On this page
- What a practice loan actually is
- What you can fund
- How much you can borrow
- Who qualifies
- What lenders look at
- Buying your rooms
- The payroll tax problem
- What it costs and how we are paid
- The free 46-page guide
- Questions we get asked
What a practice loan actually is
Most business lending in Australia comes down to one question: what can the bank take if it all goes wrong. That is why the average small business owner is asked to put up their house.
Healthcare is one of the few sectors where that changes. Lenders have decades of data on healthcare. Practice income holds up through economic cycles, patient bases stay put, billings are unusually well documented, and registered practitioners default far less often than the broader small business market. So they lend against the practice itself.
In plain terms, the goodwill you are buying becomes the security: the patients, the reputation, the referral relationships and the trained staff. Your family home often stays out of it entirely.
What you can fund
The purchase price is rarely the whole number. A practice deal usually has four or five moving parts, and each one has its own product.
| What you are funding | The product | What to know |
|---|---|---|
| Goodwill | Business term loan, secured by goodwill and equipment | The largest line in most practice purchases and the one lenders assess hardest. |
| Buy-in or partnership share | Goodwill loan over your share only | The existing partners’ security is not touched. |
| Equipment | Chattel mortgage or equipment lease | Match the term to the useful life. Supplier finance is convenient and rarely the cheapest. |
| Fitout | Fitout facility, sometimes to 100% | Lenders look hard at the remaining lease term behind a fitout. |
| Working capital | Overdraft or line of credit | Ask for it at application, not three months later after a soft quarter. |
| Your rooms | Commercial property loan | Owner-occupied consulting rooms are one of the strongest positions in commercial lending. |
How much you can borrow
For an established practice with clean accounts, specialist medical lenders will consider the full purchase price. That is 100% of what you are paying for the business. It is still subject to credit approval, your profession qualifying under the lender’s policy, and the practice standing up to assessment, because nobody approves on profession alone.
One thing worth being clear about, because it catches people out. “100% lending” means 100% of the price of the business. It will not cover your legal fees, your accountant, stock at settlement, or the working capital you need in month one. Budget those separately or you will start with no cash.
Starting a practice from scratch is a different conversation. With no trading history there is nothing for credit to assess except you, so expect a larger contribution, a longer approval, and a facility structured around 12 to 24 months of thin revenue.
Who qualifies
Policy differs between lenders, and it differs more than most people expect. A deal one bank will not look at is routine for another.
| Profession | How lenders generally treat it |
|---|---|
| Doctors and specialists | The strongest tier. Goodwill lending, high ratios on owner-occupied rooms, widest lender choice. |
| Dentists and dental specialists | Treated alongside doctors by most specialist lenders. Equipment is a bigger share of the price. |
| Veterinarians | Accepted by the specialist lenders, though by fewer lenders overall. Higher working capital needs. |
| Optometrists and pharmacists | Accepted by some lenders with tighter limits. Pharmacy ownership is also restricted by state law to registered pharmacists. |
| Allied health | Policy varies most here. Some lenders write goodwill, many want property support or a larger contribution. |
What lenders look at
Commercial credit does not use the household expense benchmarks you met on your home loan. A person reads your file and writes a submission to a credit team. They are asking one question in several different ways: will the cash still arrive under new ownership, and is there enough of it to cover the debt with room to spare.
- Adjusted earnings. Practice earnings after a market wage for you, against total repayments. They want a buffer, not a break-even.
- Revenue concentration. How much of the billing walks out the door with the seller. This is the single biggest risk in practice acquisitions.
- Trading history. Three clean years is the comfortable benchmark. Less is not fatal, but it changes the terms.
- Lease security. A goodwill loan over a practice with 18 months left on its lease is a different risk to one with a ten-year term.
- Your registration and experience. Can you run and hold this practice.
- Life and income protection cover. Where the security is intangible, the lender needs to know what repays the loan if you cannot work. Cover at least equal to the goodwill-secured balance is a common condition.
Buying your rooms
Owner-occupied practice premises are one of the strongest positions in commercial lending. The bank has a tenant it understands — you — in a building you have every reason to keep occupied. Specialist lenders will consider up to 100% for eligible practitioners buying premises they will occupy, with no lenders mortgage insurance. Buying the same building purely as an investment usually attracts a lower ratio, because the tenant risk is no longer you.
Owning the rooms inside a self-managed super fund and leasing them back to the practice is a long-standing strategy in medical and dental ownership, and the rules changed this year. Under the Treasury Laws Amendment (Tax Reform No. 1) Act 2026, any limited recourse borrowing arrangement entered into on or after 10 August 2026 can only be used to acquire real property that is business real property — land and buildings used wholly and exclusively in one or more businesses. Existing arrangements and contracts exchanged before that date are unaffected.
Consulting rooms occupied entirely by your own practice are the textbook example of business real property, so this strategy survives the change. Mixed use is where it fails: a suite with a flat above it, or part of the building leased to an unrelated residential tenant. We wrote a full explainer of the change at the 2026 LRBA changes.
The payroll tax problem
If you are buying an established practice, this is the issue that most often surprises buyers after settlement.
Since 2023 the state revenue offices have applied the “relevant contract” provisions of payroll tax to medical centres. Where a practice engages practitioners as contractors, collects the patient fees and pays the practitioner a share, those payments can be treated as wages and taxed accordingly. Payroll tax is assessed on the entity that pays them, and revenue offices can look back over prior years with interest and penalties attached.
Every state has landed somewhere different. New South Wales has a rebate rather than an exemption. It applies to wages paid to relevant GP contractors from 4 September 2024, and it is conditional on bulk billing at least 80% of GP services in metropolitan Sydney, or 70% elsewhere in the state. Queensland has a permanent exemption for GP wages. Victoria, the ACT and South Australia exempt bulk-billed GP services only. Confirm the current position for your state with your accountant and the relevant revenue office, because these rules have moved repeatedly.
What it means for your loan: an unquantified payroll tax exposure changes the forward earnings a lender is assessing, and it changes the warranties you should be asking for in the contract. Have the service agreements reviewed before you sign, not after.
“Clinicians are trained to be careful with clinical risk, then asked to take on financial risk with almost no preparation. Most of the money in a practice deal is won or lost before anyone signs, in the structure and the terms. That is the part we get involved in.”
Mansour Soltani
Director, Soren Financial
Certificate IV and Diploma in Finance and Mortgage Broking Management · FBAA member · AFCA member · Finsure Licence 384704 · Credit Representative Number 527 161
What it costs and how we are paid
On residential lending, brokers are paid by the lender and it costs you nothing. Commercial and practice finance works differently. Depending on the deal, we are paid either by the lender in commission, or by you as a fee for service where the work justifies it, or a combination. Whichever applies to your deal, we tell you the number in writing before you commit to anything.
The other costs to budget for are the ones outside the loan: your solicitor, your accountant’s due diligence, a business valuation if the lender wants one, and the insurance cover the lender requires before drawdown.
The free 46-page guide
We wrote The Medical Practice Owner’s Complete Guide for clinicians buying their first practice. Twenty-five steps from first thought to settlement. It covers valuing a practice, the full funding stack, the due diligence pack to demand, payroll tax state by state, GST and the going concern rule, and the lease traps. Three worked case studies and a first-twelve-months plan.
It is free and there is no obligation attached to it.
Send me the guide
Name, email, mobile, and where you are up to. We will email it straight through.
Questions we get asked
Can I really buy a practice without using my home as security?
Often, yes. Specialist medical lenders will take goodwill and equipment as security instead. Whether your home stays out of it depends on the strength of the practice, the size of the loan and your own position, so confirm it in writing rather than assuming either way.
How long does practice finance take?
Allow four to six weeks from a complete application to loan documents, and start before you sign a contract. The common delays are landlord consent to assign the lease, insurance underwriting, and seller documents that arrive late. Ask for a finance condition of at least 30 days.
What documents will I need?
About you: identification, AHPRA registration, two years of personal tax returns and notices of assessment, recent income evidence, and a statement of assets and liabilities. About the practice: three years of financial statements and tax returns, recent BAS lodgements, billings by practitioner, the lease, the equipment schedule and the staff and contractor agreements.
Can I fund a buy-in rather than a whole practice?
Yes. A goodwill loan can sit over your share alone, without touching the existing partners’ security. Buy-ins are one of the most common deals we write.
Do you finance veterinary and allied health practices?
Yes, though the lender choice is narrower than it is for doctors and dentists, and the structure often differs. Talk to us before you make an offer so you know what is achievable.
Should I buy the practice and the building at the same time?
Sometimes, but often not. Many owners buy the business first, prove the earnings for a year or two, then buy the building from a much stronger position. Negotiating a longer lease with an option to purchase can hold the property while you do it.
What if the practice has a payroll tax exposure?
It rarely kills the deal on its own. What it changes is the price, the warranties you ask for, and the forward numbers the lender assesses. Have it quantified during due diligence by an accountant or lawyer who works in the medical sector.
Why practitioners use Soren Financial
- We work across more than 40 lenders, including specialist medical lenders that do not deal directly with the public.
- We test the deal against lender policy before anything is lodged, so you are not shopping the same file at four banks.
- We structure the whole stack — goodwill, equipment, fitout, working capital and premises — instead of forcing it into one facility with one lender.
- We coordinate with your accountant and solicitor through to settlement while you keep seeing patients.
- 4.9 stars from more than 100 Google reviews.
Talk to a practice finance broker
If you are already looking at a practice, send us the seller’s last three years of financials. Within five business days you will have a written view on what is fundable, how we would structure it, and what we would negotiate before you sign. No cost and no obligation.
Soren Financial
Suite 1, 225 Pacific Highway, North Sydney NSW 2060
1300 899 819 · mansour@sorenfinancial.com
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Last reviewed September 2026. This page contains general information only. It does not take into account your objectives, financial situation or needs, and it is not credit, financial, tax or legal advice. Lending policies, tax rules and government schemes change. All lending is subject to lender credit approval, terms, conditions, fees and charges. Soren Financial · Credit Representative Number 527 161 · Finsure Finance and Insurance Pty Ltd, Australian Credit Licence 384704.