SBA Loans for Medical Companies: What therapists, dental, and healthcare providers need to know

Are you running or planning to open a healthcare business? This article covers:

• Which healthcare businesses qualify for SBA loans
• What credit and financial requirements you’ll need to meet
• The best SBA loan types for healthcare providers
• How SBA loans compare to traditional business credit and financing
• How SmartBiz can simplify your SBA loan process

Running a healthcare business is as rewarding as it is demanding. Between high operational costs, staffing challenges, regulatory compliance, and shifting patient expectations, managing cash flow can be tough. Access to reliable financing often determines whether a practice can grow, upgrade, or simply stay competitive in a crowded field.

SBA Loans for Medical Companies: What therapists, dental, and healthcare providers need to know

Whether you’re a dentist planning to add new operatories, a physical therapist expanding into a second location, or a home health provider looking to hire more staff, SBA loans for medical companies can be a smart solution. These loans are designed for small business owners, offering flexible terms, manageable monthly payments, and support to build a stronger, more sustainable practice.

Can healthcare businesses qualify for an SBA loan?

Many small medical companies, clinics, and providers are eligible for SBA loans. To qualify, your business must be for-profit, located in the U.S., and meet SBA size standards for your industry. You’ll also need to demonstrate the ability to repay the loan and maintain all required state and federal licenses.

Here are some common examples of eligible healthcare businesses:

• Medical and dental practices
• Urgent care and specialty clinics
• Chiropractic, physical therapy, or rehabilitation centers
• Home health and hospice providers
• Pharmacies and medical supply companies
• Behavioral health and counseling practices
• Assisted living or long-term care facilities (for-profit)
• Diagnostic and imaging centers
• Healthtech or telemedicine startups

Most for-profit healthcare providers qualify for SBA funding if they have fewer than 500 employees or annual receipts under $7.5 million (or a net worth under $15 million). Nonprofits, however, typically aren’t eligible under SBA loan rules.

Why healthcare businesses turn to SBA loans

Healthcare businesses face some of the highest startup and operating costs of any small business sector. Rent, equipment, insurance, and payroll can add up quickly (especially while waiting on reimbursements or insurance payments. SBA loans offer accessible, affordable capital that can help stabilize operations and fuel growth.

SBA loans for medical companies can help you:

• Manage cash flow during delayed insurance or reimbursement cycles
• Purchase or upgrade essential medical equipment
• Renovate your facility to meet safety or compliance standards
• Hire additional nurses, hygienists, therapists, or technicians
• Refinance high-interest loans or credit card debt

What credit score or financial history do you need to have for an SBA loan?

While the SBA doesn’t set a strict minimum credit score, lenders generally look for a personal score of 650–700 or higher. Lenders will also review your business credit history, current debt, and overall financial health to ensure your practice can manage repayment.

What lenders typically consider in an SBA loan application

Time in business: Most lenders prefer 2+ years of operations.

Debt service coverage ratio (DSCR): Ideally, it should be 1.25 or higher, meaning your business earns 25% more than its total debt obligations.

Profitability and cash flow: You should demonstrate an ability to cover expenses and loan payments.

Collateral: Real estate, equipment, or other assets can help secure the loan.

Owner equity: Lenders like to see that you’ve invested your own resources in the business.

If you’re newer to the industry, solid licensing, business experience, or a detailed business plan can also strengthen your application.

Which SBA loan type is best for healthcare businesses?

Different SBA loan programs serve different needs. Here’s how each type typically fits within healthcare businesses.

SBA 7(a) loan – the most flexible option

Best for working capital, equipment, leasehold improvements, debt refinancing, or acquiring another practice.

• Loan amount: Up to $5 million*
• Terms: Up to 10 years for working capital; up to 25 years for real estate
• Benefits: Lower down payments, competitive rates, and flexible use of funds

The 7(a) loan is ideal for established practices or providers looking for an all-purpose loan that can adapt to changing business needs.

*These terms are an example, and not a guarantee.

SBA 504 loan – for real estate and large equipment

Best for buying or renovating facilities, or financing major equipment.

Loan amount: Up to $5 million (more for some energy-efficient projects)*

Terms: 10–25 years

Benefits: Long-term fixed rates, ideal for large investments

The 504 program is great for clinics and practices investing in property — whether you’re buying your own office building or constructing a new facility.

*These terms are an example, and not a guarantee.

SBA microloan – for smaller or newer healthcare providers

Best for startups or small practices that need modest funding.

Loan amount: Up to $50,000*

Terms: Up to 6 years

Benefits: Easier to qualify for and faster to fund

Microloans are a good entry point for solo practitioners or small clinics who need to purchase initial inventory, equipment, or marketing support.

*These terms are an example, and not a guarantee.

Advantages of SBA loans for healthcare businesses

For healthcare business owners, SBA loans may help create stability. This is essential in an industry where expenses and reimbursements can fluctuate month to month. SBA loans for medical companies offer several advantages over traditional financing options.

Lower monthly payments: Longer repayment terms spread out costs, improving cash flow.

Competitive interest rates: They are typically lower than credit cards or standard business loans.

Flexible use of funds: Finance anything from staff training to technology upgrades.

No balloon payments: Predictable monthly payments make long-term budgeting easier.

Government backing: SBA guarantees up to 85% of the loan, reducing lender risk and improving approval odds.

What can disqualify a healthcare business from an SBA loan?

Even strong applicants can be denied if they don’t meet certain SBA requirements. Before applying, take time to resolve outstanding debts or legal issues, update your licenses, and ensure your financial statements accurately reflect your current performance. Preparation can make all the difference in the approval process.

Common disqualifiers include:

• Operating as a nonprofit or passive business
• Poor personal or business credit
• Lack of ability to repay (negative cash flow or weak projections)
• Unresolved tax liens, judgments, or bankruptcies
• Licensing issues or regulatory noncompliance

Ways to use an SBA loan for your healthcare business

Thinking you might need help covering gap expenses, but feeling unsure if an SBA loan is the right move? Here are seven popular ways healthcare businesses could potentially use SBA loan funds to power the growth and success of their businesses.

1. Working capital and cash flow management

Healthcare providers often wait weeks or months for insurance reimbursements. SBA loans for medical companies may help cover payroll, rent, and supply costs during those gaps, ensuring operations run smoothly without resorting to high-interest credit cards.

2. Equipment purchases or upgrades

Modern diagnostic tools and treatment equipment can be expensive but critical to maintaining high-quality care. SBA financing may be able to help you purchase or lease the technology you need to stay competitive and improve patient outcomes.

3. Facility expansion or renovation

If you’ve outgrown your current space or need to meet new safety or accessibility standards, an SBA loan may help fund renovations or expansions. This can include remodeling waiting rooms to building additional exam rooms.

4. Hiring and training staff

Expanding your team is often essential to scaling your practice. SBA funding may help support recruitment, onboarding, and continuing education programs that help retain skilled staff.

5. Debt refinancing

Many healthcare practices carry short-term or high-interest debt. Refinancing through an SBA loan may simplify your repayment schedule and lower monthly costs, freeing up funds for strategic growth.

6. Practice acquisition

Buying an existing medical or dental practice can be a cost-effective way to expand. An SBA loan may help you acquire patient records, lease agreements, and equipment while maintaining working capital for daily operations.

7. Technology and compliance investments

With new regulations, data privacy laws, and patient management technologies, healthcare businesses must constantly adapt. SBA loans may be able to help fund new electronic health record (EHR) systems, telehealth platforms, or cybersecurity upgrades to maintain compliance and efficiency.

How do SBA loans compare to medical business lines of credit?

Both SBA loans and business lines of credit can support healthcare businesses, but they serve different purposes.

SBA loans are best for long-term investments like real estate, equipment, or expansion. They offer lower interest rates and fixed payments but require more documentation.

Business lines of credit are ideal for short-term needs such as covering payroll or purchasing supplies between reimbursements. They offer flexibility but usually come with higher rates and variable payments.

Many practices use both an SBA loan for growth and a line of credit for everyday cash flow management. The SBA loan can act as the more stable, long-term support to help you fund larger costs, while a line of credit might offer a much shorter aid to help you cover small expenses.

How do I know if my healthcare business is eligible for an SBA loan?

Having this documentation ready may help speed up approval and demonstrate your professionalism to lenders. You are ready to apply once you gather the following documents and details:

• Business and personal tax returns (three years)
• Profit and loss statements and balance sheets
• Cash flow projections
• Business plan or summary of operations
• Current licenses and certifications
• Lease agreements or property details (if applicable)
• Debt schedule and collateral list

Steps to apply for an SBA loan for your healthcare business

1. Assess your funding goals. Determine what you need, including any equipment, expansion, or working capital.
2. Select the right SBA product. Choose between 7(a), 504, or microloan based on your purpose and scale.
3. Evaluate your finances. Strengthen credit, address debt, and prepare financial statements.
4. Gather documentation. Include tax returns, licenses, business plans, and ownership details.
5. Prequalify through SmartBiz. Use SmartBiz’s online platform to get matched with lenders quickly.
6. Work with your SmartBiz team. Get expert guidance throughout the underwriting and approval process.
7. Close and fund. Once approved, put your capital to work upgrading, hiring, or expanding your practice.

Grow your healthcare practice with SmartBiz

Building and maintaining a successful healthcare business takes both compassion and capital. Whether you’re upgrading your equipment, expanding your facility, or securing working capital for daily operations, our expert team makes the SBA loan process as fast and straightforward as possible.

With SmartBiz, you can pre-qualify in minutes to explore personalized loan options.