Product · Path 05
Financing for the med-spa owner buying out an existing practice.
The long-form path for med-spa owners acquiring another operator's clinic. Deal sizes from $250k to $2M, structured across the SBA 504 real-estate tranche for the owner-occupied suite and a conventional acquisition loan for the goodwill and the patient book. Read the deal sizes, the structures, the three-way capital stack, the qualifying profile, and the realistic 60 – 90 day close before you walk the file to the desk.
SBA 504 for the real-estate portion
The 25-yr fixed-rate CDC tranche against the suite the practice already occupies.
Conventional acquisition loan for goodwill
The senior piece against the practice itself — revenue, patients, brand.
MCA bridge for the cash gap at close
Use only when the operating P&L carries a 60–90 day gap the file cannot absorb.
Deal sizes
$250k to $2M, sized to the practice the LOI lands at.
The desk sizes the med-spa acquisition file to the price the LOI carries — from a soft-tissue single-treatment practice on the floor to a multi-provider / multi-location profitable operation on the high end. Five bands the underwriting desk reads on intake, plus the two sizing inputs (real-estate share and patient retention) that gate the senior-piece amortization.
Price band
$250k – $2M
Floor for a soft-tissue single-treatment practice; ~$2M for a multi-provider, multi-location, profitable operation with a strong patient book. The desk sizes the file to the price the LOI lands at, not to a per-province average.
Owner equity
10% of RE
Standard SBA 504 injection against the real-estate portion of the deal — 10% of project on a single-suite acquisition, 15% on a new-build / expansion, 20% if the file requires a green / SBA 504 exception. Sized as cash at close.
Real-estate share
~50% – 60%
On a typical med-spa acquisition the building + land accounts for 50–60% of the deal price and the goodwill + patient book + brand accounts for the remainder. The 504 tranche prices the real-estate portion; the acquisition loan prices the rest.
Goodwill + book
~40% – 50%
The patient book, the brand, the trained staff, the existing contracts are the goodwill piece. A conventional acquisition loan sizes the amortizing P&I against the practice's cash flow, not against real estate, at terms typical of SBA-style senior pieces.
Patient retention
>70% in yr 1
A retention curve the desk reads off the existing patient booking. >70% retention in year one is the clean read; below 60% suggests the file needs acquisition-financing + working-capital adjacency rather than a single senior-loan ticket.
Eligible structures
Four structures the desk sizes an acquisition file against.
An acquisition file is rarely a single facility — the bridge across the SBA 504 real-estate line, the conventional acquisition-loan senior, the optional MCA bridge for the working-capital gap during transition, and the practice audit / LL valuation that gates the SBA pre-screen. The four below cover most of the med-spa acquisition files the desk underwrites.
Covers: land + building + owner-occupied suite + 9 / 12-month second advance on TI / soft costs
SBA 504 — the owner-occupied real-estate portion
SBA 504 finances the building or owner-occupied suite the practice operates out of. 10% owner equity injection, a 25-year CDC tranche at a fixed rate pegged to the 10-year Treasury at debenture-sale, a separate bank senior piece, and an SBA-guaranteed second-mortgage debenture sold on the secondary market. The right tool for the real-estate line on the LOI.
Covers: land + building + owner-occupied suite + 9 / 12-month second advance on TI / soft costs. Excludes: pure investment real estate, any non-owner-occupant use, devices (bridge to /equipment-financing).
See SBA 504 program anatomy →— real-estate tranche
Covers: purchase price for goodwill + working-capital line to bridge the first 60–90 days
Conventional acquisition loan — the goodwill + patient book
A conventional senior-debt facility amortizes the purchase of the practice itself — the goodwill, the patient book, the brand, the trained provider team. Priced against the practice's trailing global cash flow with a senior-piece DSCR floor, sized to the deal size and the operating P&L the LOI carries, NOT to the real-estate appraisal like a commercial mortgage refi.
Covers: purchase price for goodwill + working-capital line to bridge the first 60–90 days. Excludes: the real-estate portion (route through SBA 504 or a conventional mortgage); new-construction / TI (route through SBA 504 second-advance).
See equipment financing →— fragile-asset tranche
Covers: pre-funding working capital (1–3 mo payroll, consumables, marketing)
MCA — the optional 60–90 day working-capital bridge
Where SBA 504 + the acquisition loan explicitly cannot fund the operating P&L during the transition, a small MCA ticket — factor-rate payoff in the 1.20 – 1.35 range, daily or weekly ACH against the merchant processor statement — bridges the gap until the new patient book stabilizes. Optional, not the main structure; sized to the actual cash gap and not the full price.
Covers: pre-funding working capital (1–3 mo payroll, consumables, marketing). Excludes: the deal itself, the real estate, the equipment stack. Use only when the operating P&L has a real pre-close gap.
See merchant cash advance →— cash gap piece
Covers: revenue retention curve, weighted provider economics, existing-contract continuity, brand mark and trade dress
Practice audit + third-party LL valuation
The acquisition file requires a Practice audit (P&L, patient roster, churn, technology stack) and (where the deal is > $500k) a third-party Lender-Leads valuation against the practice as a going-concern. Both are desktop-driven and re-priced by the underwriting desk; they are not the gate the file fails on, but they gate the SBA pre-screen.
Covers: revenue retention curve, weighted provider economics, existing-contract continuity, brand mark and trade dress. Excludes: a real-estate appraisal (that lives with the SBA 504 / commercial-mortgage file on the real-estate line).
See equipment financing →— device-side audit piece
3-way capital stack
Buyer DP · bank senior · SBA CDC.
The acquisition file prices into the same three-tranche structure the SBA 504 program already uses — 10% buyer down payment / ~50% conventional senior against the practice / ~40% SBA CDC against the real-estate line. The senior piece amortizes the goodwill; the CDC piece amortizes the building or owner-occupied suite on a 25-year fixed-rate term.
3-way capital stack
Buyer down payment · bank senior · SBA CDC
Typical acquisition financing structure for a single-suite med-spa with a 55% real-estate / 45% goodwill deal breakdown. The senior piece prices the goodwill; the 504 CDC tranche prices the real-estate line at a 25-year fixed rate.
At-a-glance
Buyer DP
10%
Bank senior
~50%
SBA CDC
~40%
Pies and percentages vary by deal shape and the existing-practice financial profile the desk reads on intake — the 10 %/ ~50 %/ ~40% structure is the typical read on a single-suite file with the standard SBA 504 program windows.
Tranche by tranche
Buyer down payment
10%
Cash to close
Buyer puts 10% of the project in cash at close — typically 10% of the real-estate line on a single-suite file, 15–20% if the file involves new construction or a green / 504 exception. SBA-guarantee absorbs the long-tail CDC piece; the buyer-side injection covers the difference.
Bank senior / acquisition loan
~50%
Prime or SOFR + spread
A first-position bank or credit-union senior tranche — typically prime or SOFR + spread, amortizing over 7–10 years. On an acquisition-loan file the senior piece amortizes the goodwill / patient-book price instead of refi-balling later like a commercial mortgage.
SBA CDC second-mortgage
~40%
Fixed · 25-yr · pegged to 10-yr Tsy
A Certified Development Company CDC tranche sold as a debenture on the secondary market at a fixed rate pegged to the 10-yr Treasury at debenture-sale. 25-year amortization on the real-estate line; the SBA guarantee absorbs the long-tail default risk on the CDC piece.
Stacked weight — visual
10% / 50/40 (illustrative — varies by file)
Senior-tranche callout
See what the bank piece carries.
The senior piece is the longest amortizing part of the acquisition file. Drop in a purchase price, a real-estate share, a buyer down payment share, a senior-piece APR, and a senior-piece term — the widget sizes the conventional bank piece at the typical ~50% read and prices the resulting monthly P&I.
Senior-tranche monthly callout
See what the bank piece carries.
Drop in a purchase price, a real-estate share, a buyer down payment, a senior rate, and a senior term. The desk sizes the conventional bank piece to roughly half the project and prices it against the trailing practice P&L — the senior monthly is what the underwriting desk reads first on the 504 + acq-loan pair.
The total deal — RE + goodwill + patient book.
The fraction of the deal that goes onto the SBA 504 line.
Standard SBA 504 = 10% of real-estate line.
Prime + spread on a typical bank senior or large-credit-union acquisition loan.
Acquisition-loan seniors run 60–120 months. SBA CDC stays at 25-yr fixed; not modeled here.
Senior-piece monthly
~50% / 9% APR · 84 mo
$10,056/mo
$625,000 financed (illustrative ~50% of project) · 84 mo · 9% APR
Tranche
Share / $
Sized against
Buyer down payment
~10% · $125,000
10% of project (or 10% of RE-only for SBA 504)
Bank senior / acquisition loan
~50% · $625,000
Sized 84 mo @ 9% — $10,056/mo P&I
SBA CDC second-mortgage
~40% · $500,000
25-yr fixed at 10-yr Tsy + spread — long-term amortizing, pre-pay locked to SBA windows
Numbers above are illustrative — submit intake for a sized quote. The desk prices the term sheet against your practice's trailing P&L and the actual SBA 504 program windows, not against a generalized ~50% senior-piece estimate.
Qualifying profile
What the underwriting desk reads on the acquisition file.
The acquisition underwriter reads three signals — buyer-side credit and TIB on the person making the acquisition, the target practice's audited financials and trailing patient book, and the owner-operator intent (the 51% owner-occupancy read on the practice post-close). All three gate the file at intake; missing any of them outside accepted industry norms fails the file before pricing.
Buyer-side
Operator credit + TIB
Personal credit + time in business
Buyer creditworthiness
680+ FICO · no recent charge-offs · no BK
Personal credit is the gating constraint on the buyer — the acquisition loan + the SBA 504 file both read the buyer's FICO, recent charge-offs (24+ months old and resolved are workable), and the absence of any open bankruptcy. A spouse / partner's credit may be co-signed or pulled as additional debt.
Time in business for the buyer
2 yr TIB · 1 yr with industry experience
A buyer who has run a med-spa for 2+ years is the clean read on the SBA 504 + acquisition-loan file. A 1-year TIB with an owner-operator bringing 5+ years of aesthetic-practice experience (injector, operator, regional manager) is workable; anything shorter needs an SBA pre-screen conversation before underwriting.
Practice-side
Target financial profile
P&L · TIB · retention · DSCR
Target practice financials
Audited P&L · trailing 12 · DSCR ≥ 1.15
The practice the file is buying must carry a clean audited P&L on the trailing 12 months, with TTM EBITDA rising or stable — no quarterly haircut on acquisition finance, NO negative LTM months on the file. A target practice at DSCR < 1.15 cannot carry a senior piece at the required amortization.
Patient book + retention
>70% retention in yr 1
The patient book is the value-driver the acquisition loan prices against — provider retention, consumer-book retention, weighted economics on top producing services. A book with < 70% retention in year one needs a paired working-capital line and a 60-day transition plan on top.
Time-in-business on the target practice
≥ 36 mo operations
A target practice that has been operating for at least 36 months reads lower-risk under every lender in the stack. A practice < 36 mo old needs acquisition-loan pricing on a higher SBA premium + an SBA pre-screen push; < 24 mo is not a clean read on the SBA 504 stack at all.
Operating intent
Owner-occupancy read
Buyer runs the practice post-close
Owner-operator intent (≥ 51% owner-occupancy)
Buyer operates the asset post-close
Both SBA 504 and the acquisition loan require the buyer to occupy + operate the practice post-close — the loan is a working-operator file, not an investment asset. A buyer who intends to passively operate through a manager without a sub-practitioner license fails the file at intake.
Timeline
60 – 90 days, not the fast-cash path.
Acquisition financing is the long-form / fixed-rate / owner-occupant path — not the fast-cash bridge. The five steps below are what the underwriting desk reads on every med-spa acquisition file: the LOI, the practice audit, the SBA pre-screen, the bank + CDC underwriting, and the closing.
LOI / Letter of Intent
Buyer + seller sign a non-binding LOI against the practice price, the closing window, and the non-compete scope. The desk reads pricing, conditions, and the seller-side transition plan before pre-screening the file for acquisition financing.
Week 1 – 2
Due diligence / practice audit
Practitioner-level audit of the existing practice — P&L, weighted provider economics, patient-book retention, contracts, technology stack, brand + trade dress. The desk reads this for the goodwill side; the practice audit is a desktop exercise, not a formal valuation, but it gates the SBA pre-screen.
Week 2 – 4
SBA pre-screen + size-cap confirmation
The SBA confirms the size standard (revenue OR employees, never gross assets) and the eligible use-case rules. This is the long pole on the file — lender-side delays here back up the closing date by weeks. A clean pre-screen and the SBA pre-screen receipt are the desk's first-pass outputs.
Week 3 – 5
Bank + CDC underwriting
Bank senior and SBA CDC underwriting desks read the file in parallel. The senior piece prices the goodwill against the practice's trailing P&L; the CDC piece prices the real-estate line against appraisal and the 504 program windows. Both desks return a conditional term sheet before closing.
Week 4 – 8
Closing + first advance
Closing funds the senior piece and the first CDC advance — typically ~50% of project — and the buyer-side 10% injection. For pure-acquisition files this is the entire advance; for build-out + acquisition files the second advance lands 9 / 12 months later as the build-out bills out.
Week 8 – 12
If the practice needs cash in 7–14 days, MCA is the bridge. Acquisition financing is the long-form / fixed-rate / owner-occupant path — not the fast-cash bridge. The desk sizes the working-capital gap to /merchant-cash-advance and the fixed-asset / device stack to /equipment-financing, on the same coordinated intake the practice audit lands on.
Send the file to the desk
One short form. The acquisition context prefilled.
Tell us the practice, the deal, and the buyer. We respond inside one business day with a routing read and a senior-tranche + 504 sizing estimate against the program above. Submit the intake with the “Buying an existing practice” tag carried by ?source=practice-acquisition so the underwriting desk reads the acquisition context first.
On the Review step of /apply: the notes textarea is prefilled with “I'm buying out an existing med-spa practice — ” . Edit freely; the desk reads whatever is in the field at submission.
Independent vertical-credit desk · MedGuild Capital is not a lender. Acquisition program anatomy, deal-size bands, qualifying profile, and 60 – 90 day timeline above are illustrative of the desk's first-pass sizing — not an offer to fund, not a comment on any applicant's specific file, and not a guarantee of term-sheet outcomes from any listed bank / SBA-lender / CDC partner.
Need the real-estate side of the file spawned into its own ticket? Read SBA 504 for the program anatomy on the owner-occupied real-estate line. The 504 program and the acquisition-loan pair are sized together when both apply.
The notes field on /apply uses the existing intake pattern — a 2,000-character free-text notes textarea on the Review step, prefilled with “I'm buying out an existing med-spa practice — ” . Edit, expand, or replace with the specifics the desk reads first.