Property-secured finance for medical and dental practices

Health practices look stable from the outside. Patients book, billings come in, the appointment book fills weeks ahead. Inside, the cash flow is lumpier than most owners would like. A clinic fit-out is paid for months before the first patient walks in. A dental chair or imaging unit is a single large invoice. A revenue office letter about contractor doctors can land with a figure covering several years at once.

Most practice principals own property: a home, often a consulting suite, sometimes an investment unit. That equity can carry the practice through these moments without waiting on a bank’s credit committee.

Why do medical and dental practices run short of cash?

Not because they are unprofitable. Usually it is timing.

• Fit-outs come first. Clinical rooms need plumbing, sterilisation areas, accessible layouts and sometimes imaging rooms before they can open. The spend is front-loaded and the patient list builds slowly.
• Equipment arrives in big pieces. The ATO’s instant asset write-off covers assets under $20,000 each for businesses with aggregated turnover below $10 million. Much clinical equipment costs more than that, so it is depreciated over time while the cash leaves on delivery.
• Payroll tax on practitioner contracts. Revenue NSW’s ruling PTA 041 explains that a contract between a medical centre and a practitioner can be a “relevant contract”, making payments under it taxable wages. It states that it does not matter that the payments come from patient fees or Medicare rebates the centre received. Victoria’s State Revenue Office tells medical businesses they must assess payroll tax for practitioners. An assessment can arrive as one large bill.
• Billing model changes. From 1 November 2025, all Medicare-eligible patients became eligible for bulk billing incentives, and practices that bulk bill every eligible service can join the Bulk Billing Practice Incentive Program, which pays a quarterly incentive split evenly between the GP and the practice. A clinic that moves away from gap fees gives up that income straight away, while the new incentive is paid quarterly. Run the numbers with your accountant before switching.
• Partner changes. A retiring principal wants out, or an associate wants in. Someone needs funds on a fixed date.

What do practice owners typically use property-secured loans for?

Funding moment	Typical security	Usual structure	Typical exit
New clinic or second site fit-out	Home or owned consulting suite	Second mortgage behind the bank, or first mortgage if debt-free	Bank refinance once the site trades
Chairs, imaging, surgical equipment	Home, investment unit	Caveat for a small, short need; second mortgage for larger	Equipment finance or bank refinance
Partner buy-in or buy-out	Buyer’s home or investment property	Second mortgage	Bank refinance, or sale of the outgoing partner’s share
Payroll tax or ATO debt	Any owned property with equity	Caveat or second mortgage	Practice cash flow over the term, or refinance
Buying the consulting suite you rent	The suite itself plus another property	Private first mortgage	Bank commercial loan after settlement

For the mechanics of buying a partner out, see buying out a business partner with property equity. For a second site, our page on funding business expansion with property walks through the sequence.

What property can a practice owner offer as security?

Lenders lend against real estate, not goodwill. A practice’s patient list and Medicare billings are valuable, but they are not something a mortgage can be registered over. Common security includes:

• The family home. Often the largest store of equity. It can secure a business loan, but every registered owner signs, and the existing bank stays first in line. Read about using a second mortgage on your home for business before deciding.
• An owned consulting suite. Strata medical suites in professional buildings are commercial property. They can secure a first mortgage if debt-free, or a second mortgage on commercial property behind an existing loan.
• A trust or company-owned property. Many practitioners hold property in a family trust. That works with the right trustee signatures and a copy of the trust deed.

Because there is no formal valuation required, the lender assesses the property itself, which saves days of waiting and an extra report fee. See how assessment works without one.

Who does this suit, and who does it not?

It suits:

• principals who own property with clear equity and need funds faster than a bank can deliver;
• practices with a defined event coming, such as a lease start date, a partner exit or a revenue office deadline;
• owners who want repayments paused during a ramp-up, using prepaid or capitalised interest.

It does not suit:

• anyone without property to offer, since this is property-secured lending only;
• a long-term funding need with no refinance or sale in sight;
• personal or household spending. These loans are for business purposes.

How does a practice loan work, step by step?

1. Enquire. A 60-second enquiry with the property address, what is owing on it, the amount and the purpose. No credit check at this stage.
2. Specialist call. A credit specialist discusses the security, the structure and the exit.
3. Indicative terms. You hear the likely structure, term and interest handling.
4. Letter of Offer. Pricing, fees and conditions in writing. Have your solicitor read it.
5. Documents. ID, title details, loan statements, entity documents.
6. Settlement. The mortgage or caveat is lodged and funds are paid.

Illustrative example: a Perth dental principal plans a second clinic in a growth suburb. The fit-out and two treatment rooms of equipment come to about $420k, and the landlord’s fit-out period starts in three weeks. The principal owns a consulting suite worth about $900k with $250k owing, and a home worth about $1.6m with $700k owing. A $450k second mortgage over the consulting suite funds the work, with interest capitalised for 12 months so the new site carries no loan repayments while it builds a patient base. Ten months in, with trading figures from both clinics, the principal refinances the consulting suite debt with a bank and the private loan is repaid.

If that sequence looks like yours, you can start a practice funding enquiry in about a minute.

What documents will the lender ask for?

Your practice manager and accountant will already hold most of this:

• ID for each borrower, director and guarantor;
• ABN or ACN details, and the trust deed if a trust owns the property or the practice;
• council or title details for the property, plus a current statement for any existing loan;
• recent BAS and a practice profit and loss statement where the exit relies on trading income;
• the fit-out quote, equipment invoice, partnership agreement or revenue office assessment that explains the purpose;
• a short note from your accountant on the refinance plan, if you have one.

The full list sits in our documents for a private mortgage guide.

What does a practice loan cost, and what are the risks?

Pricing is set on each deal’s security, LVR, term and exit, and we aim for the sharpest price your situation allows. A first mortgage over debt-free property generally costs less than a second mortgage or caveat, because a lender ranking behind a bank carries more risk. A small assessment fee applies, varies per loan and is shown on the Letter of Offer.

The real risks are about the exit:

• The new site ramps up slower than planned. Choose a term with room for delay and test the refinance against a conservative patient list.
• The bank declines the refinance. Have a fallback, such as selling an investment property.
• Tax obligations pile up. Keep BAS and payroll tax lodgements current. A clean position makes the bank refinance far easier.

Our guide to exit strategy for a short-term mortgage shows how lenders test that plan. Owners in other sectors face different pressures: see how retail and franchise owners use the same structures.

At a glance

• Amounts: $20k to $5m
• Structures: private first mortgage, second mortgage or caveat
• Security: residential, commercial or industrial property, including consulting suites
• Interest: can be prepaid or capitalised
• Lender: fundU, the direct lender behind this site

Is your practice ready to see if you qualify?

An enquiry does not trigger a credit check, so asking costs you nothing on your file. Your details stay with one direct lender instead of being passed around a panel, and a credit specialist who understands practice cash flow reads what you send.

Give us the property, what is owing on it, the amount and the reason, and be precise. Accurate answers about the security and its existing debt are what let us give you the right answer the first time. Check what your property could fund.