Buyer guide
How Much Does It Cost to Buy a Medical Practice?
The purchase price is only part of it. Here is everything a physician buyer should budget for, and how the price itself is set.
Short answer
A medical practice's price is set by what it earns after paying a doctor a market salary, so practices with the same revenue can cost very different amounts. On top of the price, buyers should budget for working capital, legal and valuation fees, malpractice coverage and the cash-flow gap while insurance credentialing transfers. Many physician buyers finance most of the cost with a practice loan.
What you are actually paying for
A practice purchase usually includes three things. The Health Care Group's Mark Kropiewnicki describes them as hard assets (equipment, furniture, supplies), accounts receivable, and goodwill: the value of the patient base, staff, systems and reputation that keep revenue coming after the sale.
Accounts receivable are often handled separately. The seller may keep and collect them, or the buyer may buy them at a discount. Decide this early, because it changes both the price and your early cash flow.
How the price is set
Sellers often quote a percentage of collections. Buyers and lenders look at what the practice earns after paying a physician a market salary. A worked example from Optometry Times shows why: two practices with the same $1 million in collections were worth roughly $360,000 to $630,000 and $800,000 to $1.4 million because their earnings differed (2018 figures, cited for method). The same logic applies across medical specialties.
Practical rule: if the practice's cash flow cannot comfortably pay you a market salary and the loan payments, the price is too high, whatever the asking percentage.
The costs on top of the price
| Cost | Why it matters |
|---|---|
| Working capital | Payroll, rent and supplies before your own collections arrive, usually several months. |
| Credentialing gap | Insurance enrollment in your name can take months. Plan for slower collections while it transfers. |
| Legal and accounting | Purchase agreement, entity setup, healthcare regulatory review and tax advice. |
| Valuation and diligence | An independent appraisal and review of financials, coding and payer contracts. On an SBA 7(a) loan, a purchase price above $350,000 requires an independent business valuation ordered by the lender. |
| Malpractice coverage | Your own policy, and clarity on who covers the seller's past claims (tail coverage). |
| Equipment and IT | Upgrades, EHR licensing and any deferred maintenance found in diligence. |
| Lease | Deposits or new terms if the lease transfers or is renegotiated. |
How physician buyers pay for it
Most physicians finance a purchase. Several national banks advertise up to 100% financing for qualified physicians buying a practice, subject to credit and the practice's cash flow. SBA 7(a) loans for an initial acquisition require the buyer to put in at least 10% of the total project cost as equity (SBA SOP 50 10 8.1, effective October 1, 2026). A seller note can cover no more than half of that, and only if it is on full standby, with no payments, for the life of the SBA loan. Some lenders also cap the loan relative to the practice's collections. See our guide to financing a practice purchase.
Ways to lower the risk
- Ask for a transition period where the seller introduces you to patients and referral sources.
- Consider part of the price as seller financing or an earnout tied to retention.
- Work in the practice first, as an associate, before buying. See buying into a medical practice.
Get new medical practice listings first
Join the Medical Exit Group buyer list. Tell us what you are looking for and we will send matching practices as they come to market.
Join the Buyer ListCommon questions
How much does a small medical practice cost to buy?
There is no standard price. It depends on what the practice earns after a market physician salary. Practices with the same revenue can differ in price by more than double.
Can I buy a medical practice with no money down?
Some national banks advertise up to 100% financing for qualified physicians, subject to credit. SBA 7(a) loans require at least 10% equity on an initial acquisition, and the SBA does not allow that to be reduced or waived.
Do I buy the accounts receivable when I buy a practice?
It depends on the deal. Sellers often keep and collect their receivables, or buyers purchase them at a discount. It should be agreed early.
Related reading
Sources
Figures are attributed to their source and date. Ranges are published estimates, not a valuation of any practice.
- Mark E. Kropiewnicki (The Health Care Group), "The Goodwill Value of Medical and Dental Practices," NACVA, 2026. Link
- Carl H. Spear, OD, MBA, Optometry Times, "How to calculate the value of your practice," May 14, 2018 (dated). Link
- U.S. Small Business Administration, SOP 50 10 8.1 (with Technical Policy Updates), "Lender and Development Company Loan Programs," Appendix 15: 7(a) Changes of Ownership, effective October 1, 2026. Link
- Practice-lender websites reviewed October 22, 2026 (several national banks advertise up to 100% financing for qualified physicians buying a practice; terms vary and are subject to credit).