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Practice Planning Tool

Compare the structure—not just the rate

Traditional vs. SBA Financing

See how conventional financing, SBA 7(a), and SBA 504 may change your cash at closing, monthly payment, total interest, and funding gap.

✓Cash and equity needed before closing
✓Loan payment, term, fees, and total interest
✓Collateral, guarantees, and program fit

What are you financing?

Break the project into broad categories. The mix matters because SBA 504 generally finances major fixed assets—not working capital or the purchase of a medical practice.

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Examples: professional fees, deposits, initial supplies, licensing, and transaction costs.

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Calculated automatically from the categories above.

Why the cost mix matters: SBA 7(a) can support several business purposes, including ownership changes and working capital. SBA 504 is designed for eligible major fixed assets and generally needs another source for non-eligible costs.

Enter the terms you want to compare

The starting assumptions are examples—not current quotes. Replace them with lender proposals whenever available. Rates, fees, required equity, amortization, and collateral practices vary by lender and transaction.

Opening a practice requires owner cash. Use 20% of the total project cost—$250,000 in this example—as an initial planning target, plus lender fees and enough cash to operate after closing. A particular SBA or conventional structure may require less or more, but a loan generally does not eliminate the owner's need to contribute documented funds.
Lender-specific

Traditional bank loan

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Often simpler and faster, but the lender may require more cash, a shorter term, stronger collateral, or a balloon payment.

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Flexible uses

SBA 7(a)

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May reduce the lender's risk and support acquisitions, working capital, equipment, and real estate, subject to eligibility and underwriting.

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Fixed assets

SBA 504

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Typically combines a conventional first mortgage, a CDC/SBA debenture, and borrower equity for eligible fixed-asset projects.

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Important 504 assumption: This illustration uses a 50% bank portion. Federal rules generally require at least 10% borrower contribution, 15% for a business operating two years or less, 15% for a limited or single-purpose property, and 20% when both conditions apply. The CDC and lender must confirm the project classification.

What can you bring to the financing?

Lenders evaluate repayment ability, liquidity, credit, management experience, collateral, guarantees, and the documented source of every dollar contributed to the project.

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Enter funds you can document and actually contribute. The 20% planning target is $250,000, before lender fees and a separate operating reserve.

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Common ways owners assemble the required cash

Verify before relying
Personal savings or sale of personal assetsUsually the cleanest source when funds are seasoned and fully documented.
Gifted fundsMay be possible if the source and gift terms are documented and there is no undisclosed repayment obligation.
Home-equity or other borrowed fundsMay affect global cash flow and may not be accepted as injection unless repayment comes from an acceptable outside source.
Seller financingCan reduce immediate bank funding. It counts as equity only when the applicable lender and SBA standby and injection rules are satisfied.
Physician partner or investor capitalOwnership, guarantees, securities rules, and state corporate-practice-of-medicine restrictions must be addressed before accepting funds.
Retirement-fund rollover structureA ROBS arrangement can carry significant tax, ERISA, valuation, and prohibited-transaction risk and needs specialized counsel.
Guarantees and collateral: A government guaranty protects the lender—not the physician borrower. Owners may still sign personal guarantees, and lenders may take liens on available business and personal collateral. Insufficient collateral is not the same as an automatic approval.

Review the assumptions

Confirm the inputs, then build the comparison. A lower cash requirement or payment does not by itself make a structure available, approvable, or appropriate.

Your financing comparison

The result reflects the assumptions entered above.

Lowest modeled cash need$0
Lowest modeled payment$0
Available project cash$0
Strongest fully funded DSCR0.00×Cash flow ÷ annual existing and new debt payments
ComparisonTraditionalSBA 7(a)SBA 504
Important: This educational planning tool provides mathematical illustrations based solely on user-entered assumptions. It is not a loan quote, application, prequalification, credit decision, commitment to lend, or legal, tax, accounting, investment, valuation, securities, ERISA, CPOM, or lending advice. Program rules, rates, fees, equity injection, eligible uses, collateral, guarantees, underwriting, and lender overlays change and vary by transaction. SBA approval is not guaranteed, and an SBA guaranty protects the lender rather than eliminating the borrower's repayment obligation. Verify all assumptions with qualified lenders and legal, tax, and financial advisors before acting. MedCBO is not a lender or loan broker and does not receive a financing referral fee.
Program information: SBA 7(a) terms and eligibility · SBA 504 program · 504 borrower-contribution rule