Business loans for chiropractors: setting up, upgrading and buying a clinic

Chiropractic clinics are easier for lenders to understand than many health businesses. Patients pay at the end of each visit, health fund rebates are processed at the front desk, and the equipment list is short. A clinic with a healthy appointment book tends to produce exactly the kind of bank statements non-bank lenders like to read.

That doesn’t mean every application is simple. New graduates opening a first clinic, associates buying out a principal and owners adding imaging all face different questions. This page covers each.

Where does a chiropractic clinic’s income come from?

Almost all of it is private. Patients pay a fee per consultation, and those with extras cover claim part of it from their health fund on the spot. Smaller amounts may come from workers’ compensation and motor accident schemes, and from the Department of Veterans’ Affairs for eligible veterans.

Medicare plays a minor role. Under the chronic condition management items, a patient whose GP has prepared a management plan can claim a rebate for allied health visits, with chiropractic billed under item 10964. Services Australia’s billing rules require the practitioner to attend in person for at least 20 minutes. The cap is five allied health visits per calendar year in total, shared across physiotherapy, podiatry, dietetics, chiropractic and every other eligible discipline. So for most clinics Medicare is a small slice, not a pillar. Lenders know this and look at private fee income instead.

Prepaid care plans: money in the bank, work still owed

Many clinics sell blocks of visits or care plans paid in advance. For cash flow, that’s attractive: the money arrives today. For a lender or a buyer, it’s more complicated.

Every prepaid visit not yet delivered is treatment the clinic still owes. If the clinic is sold, the buyer inherits that obligation without the cash. If a lender assesses the clinic on bank statements during a month when many plans were sold, deposits look stronger than the underlying trade. Experienced lenders will ask how much of your income is prepaid and how much remains to be delivered.

The practical answer is good records. Track prepaid balances by patient in your practice software and be ready to show the total. A clinic that can explain its prepaid book clearly looks well run. One that can’t may find its borrowing capacity reduced. The Chiropractic Board of Australia’s codes and guidelines also bear on how care is recommended and advertised, so keep plans clinically justified and documented.

Which finance fits which job?

Opening a new clinic. Expect to pay for a lease bond or bank guarantee, the fit-out (consulting rooms, reception, accessible bathroom), adjusting tables, practice software, signage and the first months of marketing. Tables and equipment suit equipment finance. The rest usually comes from savings, a start-up loan, or a loan secured against home equity, because a clinic with no trading history can’t support much unsecured debt yet. Our startup business loans page explains what lenders need from a brand-new business.

Adding imaging or new modalities. Drop tables, flexion-distraction tables, decompression units and shockwave or laser devices are usually financed individually. An X-ray unit is a bigger project: the machine, lead shielding for the room, installation, and a licence from your state’s radiation regulator. Budget for all of it before you sign.

Buying the clinic you work in. This is how many chiropractors become owners. The purchase price is largely goodwill, so lenders look closely at whether patients will stay once the principal leaves. Combining a business acquisition loan with a period of vendor finance from the retiring owner is common, because a principal who is still owed money has every reason to help patients transfer their trust.

Covering the quiet early months. A small credit line gives breathing room while a new clinic builds its patient base.

Curious how a lender would read your clinic before the lease or contract is signed? Put the question to us. The form is brief and your credit report is left alone.

Five mistakes chiropractors make when borrowing

1. Signing the lease before the finance is lined up. A landlord’s bank guarantee requirement and the fit-out bill arrive at the same time. Sort the funding first.
2. Ignoring the cost around the equipment. Shielding, electrical work and licensing for imaging can add a meaningful amount to the machine’s price.
3. Treating prepaid plans as profit. The cash is real, but so is the obligation. Lenders and buyers will deduct it.
4. Taking short-term debt for long-term assets. A table you’ll use for ten years shouldn’t be funded with a loan you must repay in twelve months.
5. Letting BAS slide while the clinic grows. Overdue lodgments and a growing ATO balance stall more good clinic applications than almost anything else.

Banks are the right first call for an established clinic owner with good accounts and property security, and their price is often the lowest. If your bank says no, a non-bank lender that looks at your daily takings may still say yes.

What to have ready

Your Chiropractic Board registration details, the clinic account’s statements for the last half-year or full year, equipment quotes, your lease, recent BAS and an ATO account statement. For a purchase, add the contract, the seller’s figures, active patient numbers and the total of unused prepaid visits that would pass to you. Use our guide to buying equipment if you’re comparing finance structures for the tables or imaging.

Example: an associate buys the practice

A fictional scenario to show how the pieces fit. An associate chiropractor in a Brisbane suburb has worked at the same clinic for six years. The principal wants to retire and offers to sell the business, including three tables, an X-ray room and a database of active patients.

The associate has some savings and equity in their home. The lender wants the clinic’s last two years of figures and a schedule of prepaid plans, which shows a balance of unused visits worth around $14k. The parties agree to reduce the price by that amount. The purchase is funded with the associate’s deposit, a loan secured against their home equity and a vendor finance arrangement over two years, during which the principal works one day a week to introduce patients. The handover holds, and the vendor finance is repaid early.

Your clinic, your next move

Whether it’s the first lease, a new table, an X-ray room or the keys to the clinic you’ve worked in for years, the right structure makes the move much less stressful.

Telling us about it is quick, roughly a minute at the keyboard, and it has no effect on your credit standing. What you send stays with our team; it isn’t parcelled out to lenders who then chase you. Someone experienced with health practices looks at your clinic’s details personally and rings you. Accurate answers matter, particularly the amount and the purpose, since they decide which option we put in front of you first.

Find out what your clinic qualifies for →