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What an SBA Lender Will Ask For Before They Finance a Practice Purchase
Build the file before you apply. Sixteen documents, each with one line on why it matters and one on what usually goes wrong. Read it here, print it, or have it emailed — the whole list is on this page either way.
What it checks
Why each document matters to the lender and what usually goes wrong with it
What you need
Trailing collections, the asking price, and your own financial position
What you get
The whole list on the page, printable, with no email required
Not on this page
No rate, no credit-score cutoff, no borrowing figure — we do not publish numbers we have not underwritten.
How we are paidWhat documents does an SBA lender need to finance a practice purchase?
Expect to produce the trailing twelve months of collections by month, three years of the practice's tax returns plus interim statements, the add-backs with evidence, the purchase agreement with the price allocated, an equipment schedule, the lease and the landlord's consent, your licensure and credentialing, a personal financial statement and your own returns, a business debt schedule, your CV, projections with assumptions, a documented source for your equity injection, the buying entity, a lien search, and the insurance and valuation the lender requires.
How to use this
Work down it and mark each line as one of three things: have it, can get it this week, or do not control it. The third group is the one that decides your timeline — the landlord, credentialing, a documented source of funds, a medical underwriting for a life policy. Those move at their own speed regardless of how quickly you do everything else, so they are the ones to start first.
Two framing points before the list. First, SBA-backed loans are made by lenders rather than by the SBA itself, with the agency guaranteeing a portion — so the program rules and the lender's own credit policy both apply, and the second varies. Second, the governing document for the program side is the SBA's SOP 50 10, and it is reissued. Where a figure matters — the minimum equity injection, what a seller note has to do to count toward it — ask your lender for the current one rather than trusting any number printed on any website, this one included.
You do not need an intermediary to do this
You can approach a lender directly, and the SBA publishes a route to do exactly that: SBA — Lender Match (19 September 2026). We say so on a page whose job is to bring us work because it is true, and because an owner who knows the alternative exists is a better client than one who does not. What we are useful for is knowing which lenders look favorably at which disciplines and getting a complete file in front of them; what we are not is the only door.
The sixteen things an SBA file ends up containing
Each item has why the lender wants it and what usually goes wrong. The failure modes matter more than the list: nearly every practice purchase that runs late runs late on the same handful of items, and almost all of them are knowable on day one.
Ovesture — What an SBA lender will ask for before they finance a practice purchase.
Full version, always current: https://ovesture.com/tools/sba-readiness-checklist/ · (929) 977-9070 · [email protected]
General information about business funding. Not legal, tax or financial advice for your situation. Program rules are set by the SBA and credit policy by each lender; confirm current figures with your lender.
Trailing twelve months of collections, broken out by month#
Why it matters. Everything else is read against this. The lender is testing whether the practice's own cash flow can carry the new debt with room to spare, which is the coverage question the whole credit decision turns on. A month-by-month series also shows seasonality and trend, which an annual total hides completely.
What usually goes wrong. The seller supplies a single annual figure, or production instead of collections. Production is what was billed; collections are what arrived. They are different numbers, sometimes very different, and the gap between them is one of the first things diligence goes looking for.
Three years of the practice's business tax returns, plus an interim profit-and-loss and balance sheet#
Why it matters. Returns are the version of the numbers the seller has already sworn to. The interim statements bridge the gap between the last return and today. A lender reconciles the two, and reconciles both against the collections series above.
What usually goes wrong. The interim statements are on a different basis from the returns — cash versus accrual, or a different period end — so nothing ties out, and weeks go by while an accountant rebuilds them. Agree the basis and the period ends at the start.
The add-backs, with evidence for each one, rather than a single adjusted figure#
Why it matters. Practice sales are almost always priced off adjusted earnings, and the adjustments are where a purchase price is made or lost. A lender will underwrite the ones it can see support for and quietly drop the ones it cannot, which can move the loan the deal needs.
What usually goes wrong. The add-back schedule arrives as one line called “owner discretionary”. Ask for it itemised with the underlying entries attached — the personal vehicle, the family member on payroll, the one-off legal fee — before the price is agreed, not after.
The letter of intent first, then the executed purchase agreement, with the price allocated#
Why it matters. The lender needs to know what is actually being bought — the assets, the entity, the patient or client records, the goodwill — and how the price splits across them. The allocation has tax consequences for both sides and affects what can be financed and over what term.
What usually goes wrong. A deal runs for months on a handshake and an LOI with no allocation in it, and the allocation then has to be renegotiated under time pressure with a closing date already promised to staff and patients.
An equipment schedule: what is included, how old it is, what condition it is in#
Why it matters. Equipment is both collateral and a capital-expenditure forecast. A lender wants to know what it is lending against, and you want to know what you will have to replace in year one — because that spending competes with the loan payment for the same cash.
What usually goes wrong. The schedule is a list of names with no ages, no serial numbers and no indication of what is leased rather than owned. Leased items are not the seller's to sell, and an assumed lease is its own approval.
The lease — and the landlord's agreement to assign it to you, or to grant you a new one#
Why it matters. A practice is usually inseparable from its location: the patients, the signage, the referral pattern. A loan term that runs longer than the secured right to occupy the premises is a problem the lender will not leave alone, and landlords are outside everybody's control.
What usually goes wrong. The landlord is approached last. Start early, and ask specifically about term, options to renew, assignment consent, and whether the lender will want a landlord's waiver or access agreement for equipment on the premises.
Your license, and everything else you need to legally practice on day one#
Why it matters. State licensure, any registration the discipline requires, and — where third-party payers are involved — enrollment and credentialing in your own right. Revenue that depends on a payer relationship does not transfer with the building.
What usually goes wrong. Credentialing time is underestimated, and the practice opens under new ownership with claims it cannot yet bill in its own name. Map the credentialing timeline against the closing date, and against the first loan payment, before the closing date is fixed.
A personal financial statement, on the lender's own form#
Why it matters. You are part of the credit. The lender is looking at your liquidity after closing, your existing obligations and your net worth, because a buyer with nothing left in reserve on day one is a different risk from one with a cushion — whatever the practice's numbers say.
What usually goes wrong. It is filled in from memory and then contradicted by the tax returns and the credit report. Fill it in from statements, and disclose the awkward items yourself rather than letting diligence find them.
Your own personal tax returns, usually for the same period#
Why it matters. They corroborate the personal financial statement and show your income history in the discipline. Where you already own a business, expect its returns to be read too.
What usually goes wrong. An extension is outstanding and the most recent year is missing. That gap tends to surface at the worst moment, so raise it at the start and ask what the lender wants in its place.
A business debt schedule — for the practice, and for anything you already owe#
Why it matters. Existing obligations come off the same cash the new payment does. A lender builds coverage on the total, not on the new loan in isolation, and an obligation it finds later is worse than one you listed.
What usually goes wrong. Equipment leases, a line of credit that is currently at zero, and any merchant cash advance get left off because they did not feel like debt. List everything, including the zero balances. If advances are part of the picture, read the path back to bankable before you apply rather than after.
Your CV, and a plain account of how long you have done this work#
Why it matters. Management and industry experience is a real part of the assessment for a change of ownership. The lender is answering one question: can this buyer run this practice at least as well as it is being run now.
What usually goes wrong. The CV is clinical and silent on running anything — hiring, payroll, supplier terms, scheduling. If the business side is thin, say how it will be covered, whether that is a practice manager, the seller staying on, or an existing team.
Projections, with the assumptions written next to them#
Why it matters. A projection is only as good as what it assumes. A lender reads the assumptions first: patient or client retention through the handover, any change in the fee schedule, staff you intend to keep, and what you plan to draw. A forecast tied to the trailing twelve is credible; one tied to optimism is not.
What usually goes wrong. Growth is assumed in year one because of the new owner's energy, while a transition ordinarily costs something before it gains anything. You can sanity-check coverage yourself first with the debt-service coverage check.
Where your share of the money is coming from, documented and seasoned#
Why it matters. SBA rules set a minimum equity injection for a complete change of ownership and limit what counts toward it, including the conditions on which a seller note may count. The figure and the conditions live in the SBA's SOP 50 10, and your lender will state the current ones — this page will not print a number it has not re-verified.
What usually goes wrong. Money arrives in the account a fortnight before closing from a source nobody can evidence. Expect to show where it came from, and expect a gift or a loan from family to need its own paperwork. Start the trail months ahead, not weeks.
The buying entity: formed, in good standing, with a tax identification number#
Why it matters. The loan is made to a borrower, and the borrower has to exist, be in good standing, and be permitted to own a practice of this kind in this state. Professional-entity rules vary by discipline and by state, and they are not a formality.
What usually goes wrong. The entity is formed late, or formed in the wrong state, or formed in a shape the state's professional rules do not allow for that discipline. Ask your attorney which entity form is permitted before anything is filed.
A lien search against the seller, the practice and the assets#
Why it matters. You do not want to buy assets that someone else has a recorded claim on. A UCC-1 financing statement is a public notice of exactly that, and clearing or terminating the ones that matter is a closing condition, not an afterthought.
What usually goes wrong. Filings turn up in the last fortnight, from a lender the seller had forgotten about, and terminations have to be chased while a closing date stands. Pull the search yourself early — the state links are at the foot of this page.
Insurance the lender will require, and a valuation or appraisal of what you are buying#
Why it matters. Lenders commonly require hazard and liability cover, professional liability appropriate to the discipline, and — where repayment depends heavily on one person — a life policy assigned to the lender. Separately, a business valuation supports the price, and where real estate is involved an appraisal, and sometimes an environmental review, comes with it.
What usually goes wrong. These are treated as paperwork and left until the end, then a medical underwriting or an appraisal queue sets the closing date instead of the parties. They have lead times. Book them as soon as the price is agreed.
Before any of it, the question underneath
A lender is answering one thing: after the new payment, does the practice still cover its debts with room to spare. You can put your own numbers against that before you assemble a single document, with the debt-service coverage check — nothing is sent anywhere unless you choose to send it. If the answer is tight on your own arithmetic, it will be tight on theirs, and the conversation worth having is about the price or the structure rather than about the paperwork.
Whether the practice is even eligible as a small business is decided by the SBA's size standards for the relevant industry code, which is a rule rather than a judgment call, and is linked below. Whether SBA is the right route at all is a separate question — we set both sides of it out on SBA versus a conventional practice loan, and the program structures themselves on SBA 7(a) and SBA 504.
Check the public record yourself
Start with the state UCC search, not an entity-registration lookup. These are different services: entity records do not establish whether assets are subject to a UCC filing. Use New York Department of State — Uniform Commercial Code filings (19 September 2026) for New York, or New Jersey — UCC non-certified search for New Jersey's non-certified UCC search. Search the seller's exact registered entity name and check the records-through date. A preliminary lookup is not the same as a certified search or copies; reports, copies and certification may carry fees. Check the service's current charges before ordering. Review the results with your closing adviser rather than treating an empty lookup as proof that every asset is clear.
Sources
Every program statement on this page rests on one of these. Anything not traceable to them is described as general practice, and the difference is marked in the text.
- SBA SOP 50 10 (Lender and Development Company Loan Programs) — U.S. Small Business Administration (link only — no freshness date claimed)
- SBA — 7(a) loan program — U.S. Small Business Administration (current as of 19 September 2026)
- SBA — 504 loan program — U.S. Small Business Administration (current as of 19 September 2026)
- SBA — size standards — U.S. Small Business Administration (current as of 19 September 2026)
- SBA — Lender Match — U.S. Small Business Administration (current as of 19 September 2026)
Frequently asked questions
No, and nobody should treat it as one. The SBA sets the program rules and its SOP 50 10 governs lender process and eligibility; each lender then applies its own credit policy on top. This page describes what is commonly asked for in a practice acquisition and why, so that you are not assembling it for the first time under a closing deadline. The governing document is linked at the foot of the page. Where a number exists in it, we point you at the SOP and at your lender rather than printing a figure we have not re-verified.
No. The first conversation needs far less: the trailing twelve months of collections, the asking price, what you have for the equity injection, and your own financial position in rough terms. The full list is what a file eventually contains. Knowing the whole list early is useful mainly because the slow items — the landlord, credentialing, a documented source of funds, a life policy — are slow regardless of how fast you move on the rest.
That depends on the lender, on how complete the file is, and on the slow items above, which is why this page gives you the list rather than a number of weeks. Anyone quoting you a firm timeline before seeing your documents is guessing. What you can control is whether the file arrives complete, because incomplete files wait.
Sometimes, and sometimes a conventional bank loan or another structure is cheaper or faster for the same buyer. The comparison turns on the price, your injection, the collateral, and how long you plan to hold the practice. We set both sides out on SBA versus a conventional practice loan, and you can go to a lender directly without any intermediary at all — the SBA's own Lender Match is linked below.
No. The whole checklist is on this page and the print button produces a clean copy with no email required. The email option exists for people who would rather have it in an inbox than a browser tab. Nothing is held back either way.
Practice & firm funding
Have someone read the file before an SBA lender does
Send us what you have and we will tell you which items are missing, which ones will hold the timeline, and whether SBA is the cheapest route for this particular purchase.
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