# How to Buy a Medical Practice With No Money Down

Source: https://apply.grosfjeld-li.com/guides/buy-a-medical-practice · By Josh Li, G&L M&A Advisory · Updated 2026-10-14

**Short answer:** Buying a medical practice with no money down means funding the price from senior debt, vendor finance (seller finance) and seller rollover instead of your own cash. It works best when an established clinic owner buys a nearby practice whose owner-doctor wants to retire, and repayments come from the practice's own cash flow while key doctors and patients stay.

**Key points:**
- You are buying doctor relationships, a patient book, staff, a lease and systems. Billing numbers and registrations usually stay with the individual doctor.
- The biggest risk is how much of the revenue walks out the door if the owner-doctor or one high-billing doctor leaves.
- Owner-doctors who keep consulting suit seller rollover. Retiring owners suit a 70/20/10 split or 100% vendor finance.
- Josh Li bought two of his own clinics with 100% vendor finance: no bank and no equity partner.
- The synergies are shared management, rostering across sites and filling empty consulting rooms.

## What are you actually buying when you buy a medical practice?

A medical practice is mostly people and habits. The balance sheet is small: some fit-out, a few treatment beds and software. The value sits in four things:

- **The doctors.** In many clinics, doctors work as independent contractors who pay the practice a share of their billings. They are not employees. Their agreements, notice periods and restraints decide whether the revenue stays.
- **The patient book.** This means active patients, usually defined as patients seen within a set recent period. Agree the definition in writing, because "patients on file" can be several times bigger than the real book.
- **The support team.** The practice manager, nurses and reception run the place. A good practice manager is often worth more than the fit-out.
- **The premises and systems.** This covers the lease, accreditation status, practice software, recall lists and any income from co-located tenants such as pathology collection or allied health rooms.

Billing numbers and professional registrations usually belong to the individual doctor, not the clinic, so they do not transfer. That is why doctor retention is the whole game.

## What makes a medical practice a good acquisition target?

- **Several doctors, not one.** A clinic where the owner bills most of the revenue is a job, not a business.
- **A practice manager who already runs operations.** The owner should be able to take a holiday without bookings collapsing.
- **Spare rooms.** Underused consulting rooms are capacity you can fill with another doctor or an allied health tenant.
- **A long, assignable lease.** Relocating a clinic loses patients.
- **Close to your existing clinic, but not on top of it.** "The practice across town" shares your recruiting pool without fighting for the same patients.

## What are the due diligence risks specific to medical practices?

| Risk | What to check | Why it matters |
|---|---|---|
| Owner-doctor dependence | Share of billings from the owner, by month | If they cut back, revenue drops with them |
| Doctor agreements | Term, notice, restraint, whether they can be assigned | Doctors can leave with weeks of notice |
| Patient records and privacy | How records legally transfer to a new owner | Rules differ; check the rules in your state/country |
| Ownership and fee rules | Who may own a practice and how fees are structured | Some places restrict ownership or contractor models |
| Contractor classification | Whether contractor arrangements reflect reality | A mislabelled employee can become a back-pay liability |
| Accreditation | Current status and next review date | Lapsed accreditation can affect funding and insurer relationships |

Our full list of warning signs is in [due diligence red flags](https://apply.grosfjeld-li.com/guides/due-diligence-red-flags).

## Why do medical practice owners sell?

Most owner-doctors do not want to stop practising medicine. They want to stop running a business. Rostering, recruiting doctors, compliance, IT and staff issues pile up on top of a full patient list. The common triggers are age, burnout from the management load, and the lack of a successor among the doctors, who often prefer to stay as contractors. Many owners would happily keep consulting two or three days a week if someone else carried the business.

## Which no-money-down structure fits a medical practice?

Every structure funds the price from the same three parts in different mixes: **senior (commercial) debt**, **seller finance** and **seller rollover**.

| Situation | Structure that often fits | Why |
|---|---|---|
| Owner-doctor will keep consulting | [60/40](https://apply.grosfjeld-li.com/guides/60-40-deal-structure): 60% commercial debt, 40% seller rollover | The owner keeps a stake, so they stay invested in keeping doctors and patients |
| Owner wants to retire within a year or two | [70/20/10](https://apply.grosfjeld-li.com/guides/70-20-10-deal-structure) | Most of the money at settlement, a note paid from cash flow, a small stake |
| Owner cares most about patients and staff | [100% vendor finance](https://apply.grosfjeld-li.com/guides/100-percent-vendor-finance) | Paid over time from the clinic's cash flow, by a successor they trust |

Medical practices are where Josh Li started. He bought two of his own clinics with 100% vendor finance: no bank and no equity partner. The owners were paid over time from the clinics' own cash flow. What made those sellers say yes was not the price. It was confidence that their patients, staff and reputation would be looked after.

## What synergies come from buying a competing clinic?

- **One management layer.** One practice manager, one payroll, one software licence, one accreditation process.
- **Doctor recruiting across two sites.** You can offer a new doctor a fuller book sooner, which is the hardest thing to offer in medicine.
- **Shared nursing and reception rosters** that cover leave and sickness without agency staff.
- **Overflow bookings.** When one clinic is full, patients are offered the other instead of a competitor.
- **Bulk purchasing** of consumables and vaccines.

More on this in [how to buy your competitor](https://apply.grosfjeld-li.com/guides/buy-your-competitor).

## Illustrative example: buying the clinic across town

*Illustrative only. The numbers are rounded and not a forecast.*

You own a six-doctor clinic doing $2.5M in revenue. Across town, a 64-year-old owner-GP runs a five-room clinic with three contractor doctors. They want to cut back to two days a week and stop managing.

- Agreed price: $1.2M. The clinic produces about $400k a year in cash flow before debt repayments.
- Structure (70/20/10): $840k commercial debt, a $240k seller note paid over three years, and $120k rolled into a 10% stake.
- Illustrative total repayments are about $265k a year, which gives a debt service coverage ratio (DSCR) of about 1.5x. That is $400k of cash flow divided by $265k of repayments. See [DSCR explained](https://apply.grosfjeld-li.com/guides/dscr-explained).
- The owner keeps consulting for 18 months, introduces you to every doctor, and their rollover stake rewards them for keeping the doctors.

> This guide is general information, not financial, legal or tax advice. Get advice on your own situation.

## Ready to buy the practice across town?

If you own an established clinic and want to buy another without putting in your own cash, we will show you how the numbers could work on a real target. [See if you qualify](https://apply.grosfjeld-li.com/medical).

## FAQ

### Can you buy a medical practice with no money down?

Yes, if the clinic has steady cash flow and the seller agrees to take part of the price as seller finance or seller rollover. Senior debt funds the rest, and repayments come from the practice's cash flow.

### Do patients transfer when you buy a GP clinic?

Patients are not owned, so they can go elsewhere. They tend to stay when their doctor stays, which is why doctor retention and a handover period matter more than the patient count.

### Do I need to be a doctor to own a medical practice?

In many places non-doctors can own a practice, but some jurisdictions have ownership or fee-structure rules. Check the rules in your state/country before you sign.

### What is the biggest risk when buying a medical practice?

Doctors leaving. If one doctor bills a large share of revenue and can leave on short notice with no enforceable restraint, the practice's value can fall sharply after settlement.

### How is a medical practice valued?

It is usually valued on the cash flow the practice earns after paying a market rate for every doctor, including the owner. Then it is adjusted for doctor retention risk, lease term and how dependent the practice is on the owner.

### Will the seller keep working after the sale?

Often, yes. Many owner-doctors want to keep consulting part-time, and a seller rollover stake gives them a reason to help keep doctors and patients.