Finance Your Urgent Care Clinic Acquisition with an SBA Loan

Source a clinic through a healthcare-focused business broker, M&A advisor, or direct outreach to physician-owners in your target market. Prioritize clinics with 3+ years of operating history, $1M–$5M in revenue, EBITDA margins of 15–25%, commercial insurance above 50% of payer mix, and a multi-provider staffing model. Request a confidential information memorandum (CIM) and sign an NDA before receiving financials. Verify that the clinic holds active payer contracts with major commercial carriers and that those contracts contain assignability or change-of-control provisions you can navigate.

Before approaching any lender, engage an attorney experienced in healthcare M&A to review the clinic's state-specific CPOM laws and determine whether an MSO structure is required. Many states — including California, Texas, and New York — prohibit non-physicians from directly owning a medical practice, requiring a non-physician buyer to establish an MSO that contracts with a physician-owned professional corporation (PC). SBA lenders can finance MSO equity purchases, but the structure must be legally documented and compliant before the loan application. Asset purchase vs. entity purchase decisions also affect payer contract transferability and must be resolved at this stage.

Assemble a strong borrower package including a personal financial statement, 3 years of personal tax returns, a healthcare-specific business plan projecting post-acquisition operations, your resume demonstrating healthcare or business management experience, and a letter of intent (LOI) signed by both parties. Select an SBA Preferred Lender Program (PLP) lender with demonstrated healthcare acquisition experience — ideally one that has closed urgent care, physician practice, or ambulatory care deals. Lenders unfamiliar with payer contract structures, CPOM compliance, or revenue cycle risk will slow your process or decline prematurely.

This is the most consequential diligence phase for urgent care acquisitions. Review 24–36 months of accounts receivable aging reports, claims denial rates by payer, collection rates, and days in AR. High denial rates (above 10–15%) or AR aging skewed beyond 90 days are red flags indicating billing compliance issues or poor revenue cycle management. Review every payer contract individually — identify change-of-control clauses that could trigger renegotiation upon sale, confirm that reimbursement rates are competitive, and verify that major commercial contracts are assignable. Your SBA lender will require a business valuation (typically ordered through an approved third-party appraiser) that accounts for payer mix risk.

Submit the full SBA loan package to your lender, including the purchase agreement, business valuation, 3 years of clinic tax returns and P&Ls, accounts receivable aging, payer contract summary, provider staffing and licensing documentation, facility lease terms, and your borrower financial package. Expect the lender's credit team to issue questions related to payer concentration risk, physician succession, and CPOM structure. A commitment letter — subject to appraisal and final SBA approval — is typically issued within 30–45 days of a complete submission. For SBA PLP lenders, full approval can follow within 2–3 weeks of commitment.

Prior to closing, confirm that all provider licenses, DEA registrations, and facility accreditations are current and transferable to the new ownership structure. Notify major payers of the ownership change per contract requirements — some payers require 60–90 days advance notice before a change-of-control. Coordinate with your attorney to assign or re-execute the facility lease, update the clinic's NPI registration, and ensure billing systems are configured for the new tax ID. SBA loan funding typically occurs at closing, with proceeds disbursed to the seller net of agreed-upon adjustments. Establish a working capital reserve immediately post-close to cover the 45–90 day lag between service delivery and payer reimbursement.