Buying a practice
Acquisition Finance for Dental, Medical and Veterinary Practice Purchases
Goodwill lending of up to 100% of the purchase price, structured by someone who has sat on both sides of more than twenty practice transactions.
The proposition
Goodwill is lendable — if the case is put properly
Healthcare is one of the very few sectors where mainstream lenders will advance against goodwill, and in the right circumstances up to the full purchase price. That willingness rests on default statistics built over decades: practices with a stable patient base and a qualified principal simply do not fail often.
What decides the outcome is how the case is presented. Lenders read UDA rates against the national average, associate contracts and their notice periods, the split between NHS, plan and private income, CQC or equivalent registration history, and whether the vendor is staying on through handover. Get those right and the deal supports a longer term and a lower margin.
Having bought and sold more than twenty practices myself, I know which of those numbers a credit committee will stop at — and how to answer the question before it is asked.
Transaction types
What we fund
Acquisitions rarely arrive in a single clean shape. Asset purchases, share purchases, partial buy-ins and staged exits each carry a different tax and warranty position, and each needs the funding structured differently.
Where a freehold is included, the transaction usually splits: a commercial mortgage on the property over twenty to twenty-five years, and goodwill lending over ten to fifteen. Two facilities, one completion, materially lower monthly cost.
- First practice purchases by an associate stepping up to principal
- Bolt-on acquisitions building a multi-site group
- Partial buy-ins and phased partnership entry
- Buying out a retiring partner or co-director
- Share purchases of an incorporated practice
- Management buy-outs and buy-ins with vendor deferred consideration
Client outcomes
Where the value is created
Deposit pressure removed
Full-value goodwill lending means a first-time buyer is not forced to remortgage the family home to raise a contribution.
Term matched to the earn
Fifteen to twenty years on goodwill keeps the servicing cost inside the practice’s surplus from month one, rather than squeezing drawings for a decade.
Handover protected
Deferred consideration and capital holidays structured so the vendor stays engaged through the transition, which is where value is usually won or lost.
At a glance
Indicative terms
- Loan to value
- Up to 100% of goodwill for qualified buyers with a clean record; typically 70% to 90% otherwise.
- Term
- 10 to 20 years on goodwill; 20 to 25 years where a freehold is included on a separate charge.
- Deal size
- £100,000 to £10m. Multi-site and group transactions handled on a portfolio basis.
- Security
- Debenture over the acquiring company, personal guarantee, and a charge over the practice assets.
- Capital holiday
- Three to twelve months is common while the buyer takes over the list.
- Timescale
- Agreement in principle within a week; completion generally 8 to 14 weeks alongside legals and CQC transfer.
Related funding lines
Questions
Acquisition Finance — frequently asked questions
For a qualified clinician buying a well-established practice, yes — several lenders will advance the full goodwill value where affordability and the buyer’s track record support it. It is not automatic. Underwriters look at your years qualified, your gross fee generation as an associate, your credit record and the quality of the target.
Where full funding is not available, we generally close the gap with equipment refinance or vendor deferred consideration rather than asking you to find more cash.
As a rule of thumb, dental goodwill transacts between roughly 100% and 150% of annual gross fee income, and lenders will usually fund at or near that valuation for a good practice. The multiple moves with the NHS-to-private mix, the associate dependency, the lease and the condition of the surgery. We give you a view on value before you commit to a price.
That is a decision for your accountant and solicitor, and it turns on tax, warranties and the transferability of NHS contracts. Our role is to make sure funding is available for whichever route you take — share purchases need the lending structured at the buying company or holding company level, which changes the security package but not the deliverability.
Next step
Considering a practice?
Send the sales particulars and the last three years of accounts. You will get a view on the price, the likely funding structure and the questions a credit committee will ask.
Prefer to write? Send an enquiry or email info@apexfundingpartners.co.uk.