Healthcare professionals face high startup costs in the form of office space, equipment, staff, insurance, and more. In 2023, typical startup costs for a small medical practice ranged from $100,000 to $500,000.

But while traditional financing used to be the way to go, SBA loans may be the better option. They offer the flexibility and funds needed to launch, expand, or stabilize medical practices.

Here’s how SBA loans can help with clinic startup financing for doctors, dentists, and other medical professionals.

SBA loans in healthcare: The basics

SBA loans are designed to help small businesses, including private clinics and dentists, with their financing needs. The U.S. Small Business Administration (SBA) guarantees between 50% and 90% of these loans, so lenders are often more willing to work with newer medical practices.

These loans typically have lower rates, longer terms, and greater flexibility in funds usage than traditional financing. These are the most common SBA loans for medical practices.

SBA 7(a)

The SBA 7(a) loan is the SBA’s most versatile financing solution for small businesses. Standard 7(a) loans range from $350,001 to $5 million. Funds can be used for practice acquisition, medical equipment, short- and long-term working capital, and debt refinancing.

These SBA loans have flexible repayment terms—10 years for general use, 25 years for real estate. This makes them a solid option for medical practitioners with ongoing financing needs or plans for future expansion.

Two other loan programs worth considering are:

  • 7(a) Small Loans—Loans are for $350,000 or less. Collateral may be required for loans above $50,000.
  • 7(a) Express Loans—These are revolving lines of credit that last up to 10 years and cap out at $500,000. They're especially useful for immediate needs, like payroll and equipment repair.

SBA 504

SBA 504 loans are geared toward the purchase of major fixed assets, such as real estate or large medical equipment. Funds can also be used to improve existing facilities or land, as well as consolidate or refinance qualified debt. They can't be used for inventory or working capital.

These loans come with 10- or 25-year repayment terms and typically cap out at $5.5 million.

SBA Microloans

SBA microloans cap out at $50,000, but typically have less stringent requirements. Medical professionals may apply for a microloan through a qualified nonprofit, community-based organization.

These loans are particularly useful in clinic startup financing because of their flexibility. They can be used for medical equipment, inventory, supplies, minor renovations, and working capital. They’re not meant for debt repayment or real estate.

Key ways medical professionals use SBA loans.

Whether you’re a dentist or other medical professional, here’s how SBA loans could help your business.

Key ways medical professionals use SBA loans
Use Description
Launching a new practice cover build-out costs, licensing, and early staffing
Purchasing medical or dental equipment Purchase X-ray machines, surgical tools, diagnostic devices, and other supplies
Acquiring real estate Purchase, improve, or renovate facilities
Hiring and payroll Cover costs for nurses, support staff, or office administrators
Business acquisition Merge with an existing medical practice
Refinancing or consolidating startup debt Replace high-interest, short-term debts with more affordable SBA terms

Advantages of SBA loans for clinics and dentists.

SBA loans can be crucial to launching and scaling your business, or even making strategic acquisitions. While it’s important to choose the right program, SBA loans offer many advantages to dentists and other medical professionals, including:

  • Lower interest rates compared to conventional business financing
  • 10- to 25-year repayment periods
  • Ability to finance both big-ticket items and ongoing operations
  • Builds long-term financial stability for medical practices
  • Partial government guarantee means less strict financing requirements

Considerations before applying for an SBA loan.

Consider the following before applying for an SBA loan for your medical practice:

  • Documentation demands—You’ll typically need tax returns, cash flow statements, other financial statements, and a clear business plan
  • Approval timelines—It may take longer to secure funds (five to 10 business days for SBA 7(a) loans) compared to other financing
  • SBA guarantee fees—Borrowers may have to pay an upfront fee when taking out an SBA loan (fees are a percentage of the of the guaranteed portion of the loan)

Dental and medical practices face unique demands that other businesses don’t. For example, insurance claims can take time and lead to cash flow delays. Be prepared to demonstrate steady patient demand and insurance reimbursement flow.

Eligibility checklist.

Any form of clinic startup financing, including SBA loans, have their requirements. While every loan program and lender operates a little differently, these are the big ones:

  • 650+ personal credit score (165+ SBSS score)
  • At least two years in business (or strong startup plan for new practices)
  • Proof of sufficient revenue for loan repayment
  • For-profit business located in the U.S.
  • Proof of licenses, credentials, and regulatory compliance
  • Clear loan purpose (like equipment financing, expansion, or debt refinance)
  • Down payment or collateral (in some cases)
  • Proof of business equity
  • Guarantor or co-signer (helps those with a lower credit score or less time in business)

Ultimately, SBA loans can be key to sustainable growth for private clinics and dental practices. These loans allow medical professionals to launch a startup, expand their services, or even merge with an existing practice—all while managing costs effectively and responsibly.

Are you a healthcare professional thinking about using an SBA loan in your practice? Find funding through Lendio’s marketplace today.