PROFITTHEORY

Medical practice transitions

Physician practice acquisitions and ownership transitions

Medical practice transitions involve more than price: payer contracts and credentialing, provider retention, compliance and the timing of collections all affect cash flow after closing. Plan financing with those realities in mind.

Talk with a financing specialist Check your debt coverage

Estimates only. Results vary. No guarantee of approval, rates or savings.

Profit Theory is not a lender. Providers make all funding decisions; approval is never guaranteed.

What changes at closing

New ownership may require credentialing updates and payer contract assignments, which can delay collections. Build working capital into the financing to cover the gap.

Paths

  • Physician-to-physician purchase
  • Partner buy-in or buy-out
  • Sale to a hospital system or group
  • Merger of independent practices

Run the numbers

Blue = you enterGreen = calculatedGray = assumptionAmber/red = check this
$

Net income + interest + depreciation/amortization + documented add-backs.

$
$
$
%
years
x

Debt service coverage (DSCR)

2.64x

Meets your 1.25x target.

Debt / EBITDA

2.17x

New annual payments

$77,639

Max new loan at 1.25x

$1,313,781

Each lender calculates cash flow and coverage its own way. Educational estimate, not a credit decision.

Build my financing planOr talk it through with your financing specialist →

Estimates only. Results vary. No guarantee of approval, rates or savings.

Estimates only. Results vary. No guarantee of approval, rates or savings.

Talk with a financing specialist

Common questions

How are medical practices valued?

We don't provide valuations; use a qualified healthcare appraiser.

How long do credentialing changes take?

It varies by payer and can take months. Plan working capital accordingly.

Can a buy-in be financed?

Partner buy-ins are often financed. Lenders decide.