Accessing the Necessary Capital for Medical Real Estate Loans
Purchasing real estate for your medical practice is a big step—but one that can significantly boost your long-term stability and equity. Whether you’re a dentist opening a second office, a chiropractor expanding to a larger space, or a physician launching a new urgent care center, securing the right financing is essential. Here’s how you can access the capital you need for a medical real estate loan.
Why Invest in Real Estate?
Medical professionals often choose to purchase their buildings for several reasons:
- Stability and Control: No more dealing with landlords or sudden rent increases.
- Equity Building: You’re investing in a long-term asset that accumulates value over time.
- Tax Benefits: Real estate ownership comes with deductions on interest, depreciation, and property taxes.
- Customization: Owning the space allows for custom build-outs to suit your clinical needs.
Financing Options for Medical Real Estate
Several financing options are available, but two primary methods stand out:
- Conventional Loans:
These loans are provided by banks or credit unions and typically require a solid financial profile and a larger down payment—often 20–30%. They’re ideal for established practices with excellent credit and steady cash flow. - SBA 504 Loans:
Designed specifically for real estate and large equipment purchases, SBA 504 loans are a top choice for medical professionals. Features include:- Loan amounts up to $5.5 million
- Low, fixed interest rates
- Terms of up to 25 years
- Down payments as low as 10% This is especially beneficial for dentists, dermatologists, podiatrists, and pain management clinics looking to expand their physical footprint.
- Loan amounts up to $5.5 million
What Lenders Look At
To secure a medical real estate loan, lenders will evaluate:
- Credit history and FICO score
- Business financials and cash flow
- Practice history and profitability
- Personal guarantee and collateral
Pro tip: If your practice is thriving but your credit is not ideal, working with a medical-focused lender—like those ProMed Financial partners with—can improve your chances.
Preparing for the Process
To access capital efficiently:
- Organize financial records: tax returns, P&L statements, and balance sheets
- Develop a business plan: show how the new property will support your growth
- Work with a broker: Medical finance experts can help navigate complex requirements
Buying real estate for your medical practice is a strategic move that can enhance your long-term financial health and professional independence. From urgent care centers to cardiology and med spa clinics, the right financing solution opens the door to long-term growth.
ProMed Financial specializes in helping healthcare providers access capital for medical real estate loans. Whether you’re buying your first location or expanding your practice, we’re here to help you secure funding tailored to your unique needs.