We receive tons of calls and emails on a weekly basis from all over the country who are interested in buying a practice. Wanting to buy a practice is step number 1. There are other questions and qualifications that should also be answered to see if you really are a qualified buyer.
Do you have the cash?
If the answer is yes, then this will also allow for easier financing. Most lenders are looking for experience in a borrower. They like to see at least 3+ years in business. 3+ years in business also means a full time practice. This does not mean a few clients on the side working out of your home. They are looking for a solid office space with a nice profit margin. They are banks, what can we say? If you do not currently own your own practice, financing may be more difficult but still doable. Most conventional lenders will analyze the transaction on a case by case basis so there is no real way of pre-qualifying until both the seller’s and buyer’s information is in their hands. Most banks are also looking for a percentage down that the buyer can put into the deal. This range also depends on the deal. You can buy practices without financing, but most seller’s are looking for a strong down payment from the buyer. This will help the seller gain confidence that the buyer can do the job and will take care of the client base. With a small or no down payment, the seller bears all the risk and the buyer can cherry pick the list. This is a great deal for the buyer, but not the seller. If you are a buyer, put yourself in the seller’s situation. Would you sell your practice with nothing down and hope the buyer can retain your clients? Seller’s can hear this that and the other, but money talks!