What does it cost to open a practice?
Costs vary widely by specialty, location and size, so build your own budget rather than relying on averages. The main lines are space and build-out, equipment and technology, initial supplies, staff hired before opening, licensing and professional costs, insurance, marketing, and working capital for the months before collections cover expenses. The ramp-up line is the one most often underfunded.
- Space: deposits, rent during build-out, construction. See build-out financing
- Equipment: exam tables, diagnostics, sterilization, furniture
- Technology: electronic health records, practice management, phones, computers
- People: front desk and clinical staff hired and trained before day one
- Ramp-up: salaries, rent and loan payments until insurance payments arrive
How do funders review a practice with no history?
They review the provider instead. Expect questions about personal credit, clinical experience and specialty, how many patients might follow, local demand, and a monthly forecast. Requirements vary by product and funder; many look at time in business, monthly revenue and credit. A detailed plan and realistic numbers carry more weight than optimistic projections.
A physician who spent years in a busy group in the same area, with referral relationships already in place, presents a clearer picture than someone relocating to a new market. Be honest about what is known and unknown. See what funders review.
Which financing fits each part of a startup?
Match each cost to a product. Equipment financing covers exam, diagnostic and treatment equipment, and it is often the easiest piece for a new practice because the equipment secures it. A term loan covers build-out. Working capital or a line of credit covers the ramp-up. SBA loan options can cover several pieces, with more paperwork and time.
See equipment financing, term loans, working capital and SBA loan options. Many new practices also use personal savings for part of the startup budget, which lowers what they borrow and can strengthen the application.
Why is credentialing the biggest early risk?
A new practice's insurance revenue generally depends on payer enrollment, and enrollment can take months, varying by payer and state. Rent, salaries and loan payments start before the first insurance payments arrive. Starting enrollment as early as possible, often before the lease is signed, is the most reliable way to shrink the costliest months.
Plan conservatively and verify timelines with each payer. Some new practices begin with cash-pay services or payers where enrollment completes first. Rules about billing during enrollment vary, so ask your billing advisor. See funding the credentialing gap for how to size the bridge.
What if I am leaving hospital or group employment?
Leaving employment to open a practice adds a few steps. Review your employment contract for any restrictions, plan the timing of your departure against payer enrollment and lease dates, and think about how patients will learn where you have gone. Your salary stops when you leave, so personal reserves matter alongside practice funding.
Contract restrictions and patient notification rules are legal questions for your attorney; MedicalBizFunding does not give legal advice. From a financing view, funders will ask when you plan to leave, when the practice opens, and how you will cover personal expenses during the ramp-up.
How do I build a forecast funders trust?
Build it month by month for at least the first year. Start with realistic patient visits per day that grow gradually, apply typical collections per visit for your payer mix, and push insurance revenue back to reflect enrollment and claims timing. Then list every expense and loan payment. The lowest cash month shows how much working capital you need.
Show a conservative case alongside your expected case. If the practice survives the conservative case with the funding requested, the request is sized well. Bring the forecast, budget, lease or letter of intent, and equipment quotes when you apply, and see the document checklist.
Frequently asked questions
Can I get funding with no practice history?
Some funders will, based on the provider's credit, clinical experience, specialty and a realistic plan. Equipment financing is often the most accessible piece because the equipment secures it. Unsecured working capital is harder without history and may come in smaller amounts.
What is usually the biggest early cost?
Often salaries, rent and loan payments during the credentialing and ramp-up months, when insurance revenue has not yet arrived. Build-out and equipment are larger single items, but the ramp-up is the cost most often underestimated and the one that puts new practices under pressure.
Do I need a business plan?
A monthly forecast and budget are the most useful parts. They help funders size the request and show you have planned for credentialing and ramp-up. A short written summary of your experience, local demand and referral sources adds context.
Is an SBA loan a good option for a startup practice?
It can be for some owners, since SBA loan options can offer longer terms. The trade-off is more documentation and a longer process, which can conflict with lease and opening dates. Compare timing and total cost with conventional options early.
Should I buy a practice instead of starting one?
Buying brings patients, staff and collections from day one, which shortens the ramp-up and gives funders history to review. Starting fresh gives you control but begins at zero. Both are financeable; compare them using our guide to financing a practice purchase.
Planning your own practice?
Apply online early so the funding plan lines up with your lease and enrollment dates.
Updated September 14, 2026 · MedicalBizFunding Team