SBA Loans for Chiropractic Practices

SBA chiropractic loans by the numbers

From FY2015 through June 30, 2026, the SBA approved 5,355 chiropractic loans under 7(a) and 571 under 504, net of cancellations.^[1] These are small loans to small offices, and a large share of them open a new practice.

Only 3.8% of practice purchases run 25 years or more, which points to deals made of goodwill, equipment and leasehold improvements, with the office leased.

Three ways into a practice

• Buying a practice as a first-time owner is an Initial Acquisition. At least 10% down that can't be waived, and the seller's history must show 1.25 coverage.^[2]
• Opening your own practice is a start-up, judged on projections.
• Adding a second practice can qualify as a Business Expansion at a 1.15 floor, but only if your existing practice is the Borrower and buys 100% of the other practice's ownership.

An associate employed by the practice 24 months or more who buys 100% of the stock from a single owner has a fourth path, an Owner Buyout. The size limit for chiropractic offices is $9.0 million in average annual receipts, counted together with any practice you buy.^[3]

Who may own the practice is state law

Every state requires chiropractors to be licensed, and BLS counts 61,700 chiropractor jobs in 2025, 36% of them self-employed.^[4] The SBA's rule is one line: a business that needs professional licenses is eligible as long as its ownership structure meets your state's requirements, and the lender documents that in the file. Who may own a chiropractic practice or professional corporation is state law, and the SOP doesn't say what any state requires.

Two SBA rules can collide with outside-owner structures. A practice that hands a management company sole discretion over its operations is an ineligible passive business, and an agreement that gives an owner or investor who doesn't guarantee the loan control of the business makes it ineligible. Ask a health-care attorney in your state who may own the practice before you choose a structure.

Most of the price is goodwill, and the debt is capped at the valuation

In the book's main example, Dr. Lisa Hernandez, an associate for four years, buys the practice where she works from its retiring owner for $375,000. Her new professional corporation buys the assets, which makes it an Initial Acquisition. Of the price, $263,000 is patient goodwill, $70,000 is equipment and $42,000 is leasehold improvements and furniture.

• Above a $350,000 Business Purchase Price, the lender orders an independent valuation, prepared for the lender, not for you or the seller. Lisa's came in at $380,000.
• Total debt, including any seller note that isn't on full standby, can't exceed the valuation. Had hers come in at $350,000, the $25,000 difference would have had to be equity, with any seller money in it on full standby.

The lender tests her cash flow after a market salary for the treating doctor. The seller's discretionary earnings of $212,000, less a $100,000 salary for Lisa, leave $112,000 against $53,202 of annual debt service. Projections can't be used to meet the 1.25 floor on a purchase.

Equipment counts at a discount. Goodwill counts for nothing.

A gap that size is normal for a practice purchase. When the loan isn't fully secured, the lender must take available equity in personal real estate the owner holds alone, though not where the equity is under 25% of the home's value. Lisa's townhouse has $95,000 of equity on a $310,000 value, so her lender takes a lien on it. On a Standard 7(a) loan for a business that depends on one owner, the SBA also requires life insurance for the shortfall; her lender sets the figure after counting the home. A shortfall alone is not a reason to decline the loan. Hazard insurance is required on pledged collateral for 7(a) loans over $50,000.

Patient retention and the seller's transition

The biggest worry in a practice purchase is that patients follow the retiring doctor out the door. Two SBA rules shape how you handle it.

• No earnouts, but rebates are allowed. A price that rises after closing if patients stay is an earnout, and the SBA prohibits it. A buyer rebate, where the seller pays money back if retention or collections fall short of agreed terms, is allowed, and any rebate must pay down the 7(a) loan.
• The seller leaves, or consults. In an Initial Acquisition or a Business Expansion, the seller may not stay as an officer, director, stockholder or employee, so the retiring owner can't stay on as an associate treating patients. The practice may hire the seller as a consultant for up to 24 months in total. What a consultant may do with patients is a question for your state and your payers.

Lisa's seller consults for 6 months: he tells long-time patients himself that she is the new owner, walks her through the payer history, and tells the staff their jobs are stable. Put the plan on one page before closing, and keep the consulting fee fixed so it can't look like a disguised earnout.

Medicare needs its own plan. The seller's Medicare billing number can't be sold or used by anyone else, so Lisa's practice enrolls and bills under its own numbers.^[5] Medicare Part B pays a chiropractor only for manual manipulation of the spine to correct a subluxation, and CMS's 2025 review put chiropractic at a 30.4% improper payment rate, mostly for insufficient documentation.^[6] Review a sample of the seller's charts before closing, and ask your deal counsel how your structure handles the seller's past claims.

Student loans and the household test

Student debt can matter twice. A federal debt more than 90 days delinquent can make an applicant ineligible until it is cured, for example with a repayment agreement that is being paid as agreed, and lenders check the federal CAIVRS database. Current loans still count in the global cash flow test, which must reach 1:1 after taxes, living costs and personal debt.

The SOP doesn't say which payment counts. Lisa owes $220,000, current and never delinquent. Counting her income-driven payment of $9,600 a year, her household test comes to 1.54; counting the standard 10-year payment of $29,977, it comes to 1.31. Both clear 1:1, but your lender's choice can decide a closer deal, so ask early.

Down payment and seller notes on a purchase

For a first-time buyer, the SBA minimum is 10% of total project cost, and it can't be reduced or waived. A seller note counts toward it only on full standby, meaning no principal or interest for the life of the SBA loan, and limited sources like that can cover no more than half of the required injection. A temporary exception for veterans: from November 11, 2026 through September 30, 2027, the SBA has announced that an eligible veteran purchasing an existing business with a 7(a) loan may raise the full 10% from these sources (SBA News Release 26-117); ask your lender how it applies.

Lisa needed $41,500. She put in $21,500 of her own cash, and the seller carried $20,000 on full standby, under the half cap of $20,750 by $750. Many lenders ask for more than the minimum.

Lisa's deal, start to finish

Every number below comes from the book's worked example. The interest rate is illustrative.

Assets or stock

Lisa had worked there 48 months, so buying 100% of the stock from the single owner would have been an Owner Buyout. Her equity would have been 10% of the price, $37,500, and her lender could have reduced it. But the half cap would have been $18,750, so $1,250 of her $20,000 seller note couldn't have counted. Two questions on that path are left to the lender, because the SOP is unclear: whether the seller must stay and guarantee after selling 100%, and whether the 24-month consultant limit applies, since that rule names only Initial Acquisitions and Business Expansions.

She chose assets on her attorney's advice. Buying the company also buys its past: its billing, contracts and claims. That is contract and state law, not an SBA rule, so make the choice with your attorney and your lender together.

Opening your own practice

Dr. Kevin Walsh has spent two years at someone else's clinic and wants to open a two-room practice in a leased suite. His project costs $185,000, and he puts in $18,500 of his own cash, 10%.

His loan is small enough for the 7(a) Small program, but that program needs 1.10 coverage within one year of funding, and his first year falls short. When projections miss it, the SOP says the loan must be processed as Standard 7(a) or SBA Express; there is no waiver. His lender uses Standard 7(a), where the start-up standard is 1.15 within 2 years, and his year two reaches 1.35.

SBA Express was the other route: a 50% guaranty and a $2,497.50 fee, with the credit decision left to the lender's judgment. On equity, the SOP points two ways. Its start-up section calls for at least 10% of project cost, while its SBA Express section leaves whether to require equity to the lender. Expect a lender to ask for at least 10%.

The new equipment counts at 75% of its price, $41,250, and his lender gives the build-out no collateral value, leaving a $125,250 shortfall. He rents and owns no home to lien, so life insurance of at least $125,250 is required. His build-out is more than 30% of the loan, so the lender reviews the lease: five years plus two five-year renewals only he can exercise, which covers the loan term. Construction bonds are waived at $350,000 or less. His state license comes before opening, X-ray registration is state law, and every required license must be in place within 90 days after the loan funds.

Buying a second practice

Dr. Rachel Torres has owned Torres Spine Care LLC for 10 years. A retiring chiropractor 12 miles away will sell his practice, but its collections are down 15% in two years and on its own it loses $10,000 a year after the associate who will treat there. Her LLC is the Borrower and buys 100% of the seller's entity for $180,000; the acquired practice keeps operating as its own entity and signs as a Co-Borrower. Because both are chiropractic offices in the same industry group, it qualifies as a Business Expansion.

That structure lets the lender measure coverage on both practices together. Her practice's $250,000 of cash flow, less the target's $10,000 loss, covers $92,049 of combined debt service 2.61 times against a 1.15 floor. If she had bought through a new company she owns personally, or had her practice buy only the assets, it would be an Initial Acquisition at 1.25, the lender would likely look to the target's own losing numbers, and the deal would very likely fail. Your state decides whether one practice entity may own another, so confirm it with a health-care attorney first.

The total project is $250,000 with renovation and working capital, and she injects $25,000 from the practice: her lender could have waived it on an expansion, but waiving it would have barred the working capital. The $225,000 loan carries a $5,062.50 upfront fee, and because the acquired entity keeps its identity, its change of ownership is reported to Medicare within 30 days.

Which SBA program fits a chiropractic deal

On fees, loans of $150,001 to $700,000 pay 3% of the guaranteed portion in FY2027, and the 0% upfront fee reaches a practice only if the loan is $700,000 or less and the practice is in a rural county.

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• SBA Start-Up Loans
• Global DSCR for SBA Loans
• SBA Collateral Requirements
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