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Business loans for physical therapy practices

Put your healing hands to good use: Get financing to start, expand or buy a physical therapy practice.

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By

Kellye Guinan

&

Stacie Hurst

Updated

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Name Product Interest Rate Loan Amount Loan Term Minimum Revenue Minimum Time in Business Loans Offered
OnDeck Business Loan
OnDeck Business Loan
8.00% – 29.00%
$5,000 - $300,000
6 - 18 months
$100,000/year
6+ months
Secured Term, Line of Credit, Merchant Cash Advance
To be eligible, you must have been in business for at least 6 months with a minimum annual gross revenue of $100,000.

OnDeck offers fast and simple financing. Apply in less than 10 minutes with your basic business information and see your loan offers without hurting your credit score. Get approved within 1 business day, and choose your term, amount and payback schedule once approved.
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Merchant Growth Business Loan
Merchant Growth Business Loan
12.99% - 39.99%
$5,000 - $500,000
3 - 12 months
$10,000 /month
6 months
Unsecured Term, Line of Credit, Merchant Cash Advance
To be eligible, you must have been in business for at least 6 months and have a minimum of $10,000 in monthly sales.

Merchant Growth offers financing tailored to business needs. It specializes in providing capital based on future cash flows, but it also offers fixed solutions. Fill out an application within 5 minutes and get your funds within 24 hours.
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Loans Canada Business Loan
Loans Canada Business Loan
6.60% - 29.00%
$4,000 - $500,000
3 - 60 months
over $10,000/month
100 days
Unsecured Term
To be eligible, you must have been in business for at least 100 days, have a Canadian business bank account and show a minimum of $10,000 in monthly deposits ($120,000/year).

Loans Canada connects Canadian small business owners to lenders offering financing up to $500,000. Complete one simple online application and get matched with your loan options.
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Representative example: Anton opens his own physical therapy practice

Anton just graduated with a degree in physical therapy and wants to open his own practice. He finds a conveniently-sized commercial property near his home leasing for $1,250/month ($15,000.00/year). Along with all the other costs of opening a practice – including equipment, insurance, administrative expenses and hiring an extra staff member – Anton figures he’ll need about $75,000.00 to get his business up and running during the first year.

He applies for a business loan from an online lender and, thanks to his solid credit score and compelling business plan, is approved for the amount he needs. Anton signs the loan documents, and the funds are deposited into his account within a couple of business days.

Cost of purchasing a pharmacy$75,000.00
Loan typeBusiness loan (term loan)
Loan amount$75,000.00
Interest rate (APR)7.99%
Loan term5 years
Additional feesOrigination fee of 3.00% ($2,250.00)
Monthly payment$1,520.37
Total loan cost$91,222.20

*The information in this example, including rates, fees and terms, is provided as a representative transaction. The actual cost of the product may vary depending on the retailer, the product specs and other factors.

How to finance a physical therapy practice

Start with having detailed documentation. Your business documents should outline every part of your business. This includes the software you use, how many patients you see monthly and any specialties you have. Comparing the expenses and revenue of other, similar physical therapy practices could help you determine your success in finding the right financing for your business.

With demand for physical therapists likely to increase, starting or buying a practice may be a good career move. Before you apply for a loan, you’ll need to have good to excellent credit and experience as a business manager. This shows potential lenders that you’re serious about your practice and have the skills to run it.

The key to financing a physical therapy practice is to look for lenders actively pursuing health professionals. This means you may want to consider a bank business loan. Shopping for a loan with affordable rates and repayment terms that fit your budget will help you find the right fit for you.

What types of loans should I consider?

To get the right financing for your physical therapy practice, you’ll need to determine what type of loan you’ll need. Here are a few of the most common that can help you expand your business.

  • Equipment finance. Getting the right equipment for your physical therapy practice is a must. An equipment loan could help you fund up to 100% of the purchase of your treatment tables, medicine balls, treadmills and other critical supplies for your practice.
  • Term loan. If you know you’ll have a lot of upfront expenses for your practice, consider taking out a term loan. You can borrow anywhere from $5,000 up to millions of dollars, making it easy to fund any startup costs you may encounter.
  • Canada Small Business Financing Program (CSBFP) Loan. You can apply for these loans through a chartered bank, credit union or a caisse populaire. They are at least 75% backed by the Government of Canada. Your business must make under $10 million in revenue annually to be eligible for this program. Because the government will cover a large portion of these loans if you default, it’s easier to qualify for financing. These loans have much lower interest rates than private loans. You can use them to finance the purchase of a property or to fund your business like you would with a term loan.
  • Line of credit. A business line of credit offers a revolving credit limit that works as a mix between a credit card and a term loan. You’ll only pay interest on what you borrow, and many lenders allow you to reborrow once you pay back what you owe.

How much does it cost to start a physical therapy practice?

The startup costs for each business model varies, and there’s no set rule about which costs more to open. Although starting your own practice involves buying equipment, renting out an office and hiring employees, it may not be more than the purchase price of an existing practice.

Consider the space you’ll need to buy or rent, the employees you’ll need to hire and the equipment you want to use. Having a budget with estimated costs will help you when you present your business plan to a lender. A budget can help guide you to a loan that can finance everything you need — including a cushion while you work on marketing your services to grow your client base.

How much does it cost to purchase an existing physical therapy clinic?

If you choose to purchase an established physical therapy practice, consider the following before making an offer:

  • Financial records. Review full financial records for the business over the past 2 years, at a minimum. Let an accountant review the records and give a professional opinion. If the practice isn’t doing well, the financial records may be able to shine a light on future problems.
  • Existing client base. A solid base of existing clients is one of the primary advantages of purchasing an existing physical therapy practice. Existing clients allow you to start earning income immediately after taking over the business.
  • Equipment. Ensure that you and the seller have an agreement about the furniture, equipment and supplies that are passed on to you. If anything is in disrepair, negotiate the price down so you have enough left over to fix it.
  • Reason for sale. Why is the practice for sale? Reasons can include an owner retiring, losing clients or staffing issues. Do your research to make sure the sale is for a practical reason, not because the business is going under.
  • Professional network. Many physical therapy practices rely on referral relationships with local medical practices and sporting organizations. If the business you’re looking to buy has these, it’ll be easier to hit the ground running and start earning money.
  • Current employees. A physical therapy practice relies on its administrative staff as much as its physical therapists. Some business deals may hinge on the staff keeping their jobs after the sale, while others may require that you change staff to increase productivity.

What factors should I consider when buying a physical therapy practice?

When you’re considering going into business on your own as a physical therapist, the first decision you should make is whether you want to start your own practice or purchase an existing one.

Starting your own physical therapy practice appeals to many therapists who find the idea of building a client base and creating a legacy in their own name enticing. It comes with plenty of risk, but at the end of the day, it could be worth it to manage your own practice.

Purchasing an existing physical therapy practice can be a better financial and professional choice, but it may be more expensive than starting your own business. An established practice comes with an existing client base, has a place within the community and may have existing ties and referral agreements with the local medical community.

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Do I qualify for a business loan?

Qualifying for a business loan can be complex, and the criteria you’re required to meet may change based on whether you’re financing your current business or buying another practice. Generally lenders look for:

  • A comprehensive, well-researched business plan.
  • In-depth cash flow projections for the next year.
  • A marketing plan, including an analysis of local competitors.
  • Sufficient business management skills or plans to hire a one.

For buying a practice, you’ll need an additional documentation that includes between 12 months and 2 years of complete, audited financial records for the practice, including profit and loss statements.

Business loan requirements explained

Bottom line

Starting a physical therapy practice or buying one already in business can be a great next step for your career. While there is a lot to consider and research, funding is within your reach to grow a practice you’re proud of. Learn more about business loan options in our comprehensive guide.

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