Buyer Financing for Medical Practice Acquisitions

Braden Haldeman joined Strategic Medical Brokers after more than ten years in healthcare lending, beginning with Bank of America Practice Solutions in 2012 — a platform he describes as one of the country’s largest, spanning dental, veterinary, and, more recently, medical lending across acquisitions, startups, expansions, and multi-practice groups. That vantage point, sitting alongside buyers, sellers, attorneys, CPAs, and advisors on both ends of a transaction, is what eventually led him to SMB. The financing process, he explains, asks a lot of a first-time buyer: credit applications, credit pulls, production reports, and credit interviews with underwriters — often while gathering the seller’s financials at the same time. The single most important idea, Braden says, is cash flow. A buyer can have strong credit and money in the bank, but the real question is whether the practice produces enough income to support the buyer’s family and the new debt. “It’s dollars in versus dollars out,” he says — a question of whether buyer and practice fit together, not simply whether the buyer qualifies. On options, Braden points to conventional financing as the most advantageous path for qualified physician-buyers — sometimes available with little or no money down for the practice, and at times the real estate — though it is also the hardest to obtain. SBA financing, including the 7(a) for first-time owners and the 504 when real estate is involved, offers longer terms and can be easier to qualify for, usually at higher interest rates. He flags three pitfalls. Starting too late, when buyers are negotiating a letter of intent before they’ve even spoken with a lender. Choosing a lender that isn’t medical-specific, when a CPA or attorney in the space could point them to the few names that come up again and again. And leading with interest rate, when the lender will be a seven- to ten-year business partner handling deposits, credit cards, merchant services, and payroll — making fit, not rate, the question that matters most. For buyers planning ahead, Braden’s advice scales with the timeline. One to two years out: be curious, talk to as many people as possible, and learn from physicians who have already been through it. Three to five years out: have the pre-qualification conversation early, identify the financial markers to strengthen, and remove any questions about bankability before it’s time to ask for the money. Finally, he pulls back the curtain on the seller’s side — the three years of business tax returns and balance sheets, recent profit-and-loss statements, extension documents, recasting and add-back detail from the CPA, payroll summaries, and due-diligence items a buyer will expect to verify. Much of that legwork, he notes, is exactly what an advisory team takes off the seller’s and buyer’s plates to keep a transaction moving. Strategic Medical Brokers guides physician-owners through these decisions one conversation at a time. Straight answers, no pressure. When you’re ready, we’re here.