Allied Health Practice Loans: Buying or Growing Your Practice
Allied health practice loans for buying or growing a physio, psychology or other practice: how lenders value goodwill, contractors and payroll tax.
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Allied Health Practice Loans · Goodwill · Contractors
Buying out a retiring principal whose practice runs on contractor physios is buying more than a patient list. Here is how lenders value an allied health practice, fund the goodwill and read contractors, payroll tax and the latest Medicare and NDIS changes.
Quick Answer
An allied health practice loan is business finance used to buy, start or grow a physiotherapy, psychology or other allied health practice, and lenders size it on the practice's earnings, who does the billing and how secure the referral base is. Goodwill is typically funded through a business loan sized on earnings, with treatment room gear on equipment finance, and the amount varies by lender.
Also called: physiotherapy practice loan, allied health business loan, physio practice finance. They describe the same need; "allied health business loan" is also used by mobile and NDIS providers who work without rooms.
What is an allied health practice loan?
Any business finance used to buy, start or grow a physiotherapy, chiropractic, psychology, podiatry, occupational therapy or speech pathology practice counts as an allied health practice loan. In most files it is not one product. A purchase usually combines a business loan for the goodwill, equipment finance for the treatment rooms and a line of credit to carry the practice through the first few weeks of ownership.
Most lenders do not run a separate allied health product. They apply their business lending policy, and some add a health professional overlay that changes the documents asked for or the security required. The parts of a purchase, from the sale contract to the handover, are set out in the practice acquisition glossary entry.
This insight covers buying and growing an existing practice. Fitting out a new or relocated clinic is a different question, with its own quote splits and approvals, and it sits in allied health clinic fit-out finance.
Do allied health professionals get the same practice loan terms as doctors and dentists?
Allied health professionals can get professional practice loan terms from some health lenders, but usually on narrower terms than doctors and dentists receive. Some health lending policies list physiotherapists, psychologists, optometrists and other allied professions by name, often with lower borrowing limits or more documents than a GP or dentist would face. Other lenders treat an allied health purchase as a standard business loan with no professional overlay at all.
Which list your profession sits on varies by lender and changes from time to time, so it is checked at the time you apply, not assumed. How bank health divisions, specialist financiers and non-bank lenders differ is set out in medical finance companies in Australia. Professional terms are also not the whole picture. A practice with clean financial statements, a stable team and a long lease often gets a better outcome on ordinary business lending than a weaker practice gets with a professional overlay. The finance options for health practice owners across every profession are gathered on the Whitecoat Hub.
How are physiotherapy and psychology practices valued for sale?
Physiotherapy and psychology practices are usually valued on maintainable earnings after paying the owner a market wage for their own clinical hours, then adjusted for how much of the income is likely to leave with the seller. A practice where the principal sees most of the patients is worth less to a buyer than its profit suggests, because much of that profit is the principal's own labour.
The question a valuer and a lender both start with is who does the billing. If the seller bills a large share of the practice's income personally, the goodwill depends on patients staying after the seller goes. If the billing is spread across several clinicians who are staying, the goodwill is easier to fund. Other drivers include where referrals come from (GP plans, NDIS, workers compensation, private health or self-referral), how long the lease has left to run and the condition of the equipment.
There is no single published multiple for allied health practices, and this insight does not quote one. Across the practice sales we've looked at, the same profit can support quite different valuations depending on the team and the lease behind it. A file that is short on evidence is often a thin file, not a weak practice, and the gap is usually closed with documents rather than a lower price.
Strong file
- Billing spread across several clinicians who are staying
- Referral sources mixed across GP plans, private health and self-referral
- Lease with years left to run and assignment consent in hand
- Billing reports by practitioner that tie to the bank statements
- Seller handover and restraint written into the sale contract
Thin file
- The seller bills most of the income personally
- One referral source or one funding scheme carries the practice
- Lease close to expiry with no option or assignment consent
- Accounts that do not separate the owner's wage from profit
- No written contractor agreements
How much of an allied health practice's goodwill will a lender fund?
How much of an allied health practice's goodwill a lender will fund depends on the practice's earnings, how much of those earnings depends on the seller, and what other security you can offer; the loan is sized on earnings, and the share of goodwill funded varies by lender. Some health lending policies advertise high or full funding of a practice purchase for eligible professions, usually conditional on trading history, earnings cover and, often, property security from the buyer.
Where the goodwill alone does not support the loan, lenders look for other security: a registered interest over the home, a guarantee from a related entity or a larger deposit. How those security packages are put together is covered in the practice finance guide for medical, dental and vet practices, and who lends against goodwill at all is set out in who funds goodwill when buying a business.
| Part of the purchase | Usually funded by | What the lender looks at (indicative) |
|---|---|---|
| Goodwill | A business loan or goodwill finance, sometimes with property security | Maintainable earnings, the seller's share of billings, lease term, the seller's restraint |
| Practice equipment | Equipment finance or a chattel mortgage over the equipment | Age and resale value of plinths, rehab and diagnostic gear; supplier invoices |
| Working capital at handover | A line of credit or a small working capital facility | The gap between paying wages and receiving Medicare, NDIS and health fund payments |
| Contractor-heavy practice | The same products, typically assessed more cautiously | Written contractor agreements, retention history, payroll tax position |
| NDIS-heavy practice | The same products, typically assessed more cautiously | Share of income from one funding scheme, claim timing, registration status |
| The premises | A commercial property loan, separate from the practice loan | The property valuation and the lease back to the practice |
Treatment room equipment is usually best kept off the goodwill loan. Funding it through asset finance secured over the equipment itself leaves more of the goodwill loan's limit for the part of the purchase that has no physical security, and the handover gap can sit on a business line of credit rather than inside the term loan.
How do contractor practitioners and payroll tax affect an allied health practice loan?
Contractor practitioners affect an allied health practice loan in two ways: they decide how much of the income stays after a sale, and they can carry a payroll tax exposure that a lender wants resolved before settlement. Under the contractor model, clinicians bill under the practice's name and share their fees with the practice, which is common across physiotherapy and psychology and keeps fixed wages low. It also means the people producing most of the income can leave on short notice.
The payroll tax question comes from the relevant contract provisions in state payroll tax laws, which can treat certain payments to contractors as wages. The New South Wales Court of Appeal decision in Thomas and Naaz in 2023 applied those provisions to a medical centre and its contractor doctors. Revenue NSW guidance updated in March 2026 says payments to contractor practitioners may be caught, and Queensland guidance notes that its GP exemption does not extend to other types of medical centre businesses.
That guidance is written for medical centres and GP practices. No state source we read addresses allied health practices directly, so whether a particular fee-sharing arrangement is caught is assessed case by case, by an accountant, against that practice's agreements. From the underwriter's seat, an unresolved exposure is a possible back-tax liability sitting behind the goodwill, and it tends to slow an approval more than any other single issue in a contractor-heavy file. How the GP rulings play out in a whole practice purchase is covered in medical practice acquisition loans.
How do recent Medicare and NDIS changes affect allied health lending?
Recent Medicare and NDIS changes affect allied health lending by changing where referrals come from and how quickly claims turn into cash, which is what a lender reads in the bank statements. From 1 July 2025, GP management plans and team care arrangements were replaced by a single GP chronic condition management plan, with up to 5 allied health services per calendar year, at the time of writing (10 for Aboriginal and Torres Strait Islander patients), according to MBS Online's factsheet on the Chronic Disease Management Framework changes. A practice that leans on GP plan referrals is worth checking for how its referral flow has held up since that date.
What changed for psychology practices under Better Access?
Psychology practices under Better Access can see a patient for up to 10 individual and 10 group sessions per calendar year, at the time of writing. Since 1 November 2025, Better Access referrals must come from a GP at the patient's MyMedicare practice or from their usual medical practitioner, and referrals dated before then stay valid until the services under them are used. A buyer should ask the seller how referrals have held up since that change.
What changed for NDIS therapy income?
NDIS therapy income changed when a number of therapy price limits were adjusted from 1 July 2025, and price limits are reviewed each year. The National Disability Insurance Scheme Amendment (Securing the NDIS for Future Generations) Act 2026, passed in August 2026, requires providers to keep claim records for 7 years and, from 1 December 2026, to claim within 90 days of the support, down from 2 years. For a practice with a large NDIS share, late claiming becomes a cash flow risk a lender will ask about.
The basics of how lenders read NDIS, Medicare, private health and workers compensation income are covered in allied health clinic fit-out finance, and payment timing by funder is set out in Medicare, health fund, WorkCover and DVA payment cycles.
What stalls an allied health practice loan, and what should you have ready?
An allied health practice loan usually stalls on the same few issues, and most of them can be cleared before the application goes in.
- One clinician carries the practice. A single contractor, or the seller, bills most of the income, so the lender doubts it will survive the sale.
- One funding scheme carries the practice. A heavy NDIS or single-referrer share makes the income look concentrated.
- Short trading history. A practice with limited trading history, or a buyer new to running a business, narrows the lender panel.
- Unresolved payroll tax. No accountant's view on the contractor arrangements.
- No lease assignment. The landlord has not consented, or the lease has little time left to run.
What documents should you have ready for an allied health practice loan?
- Practice financials. Typically two years of profit and loss statements and tax returns, with the owner's wage shown separately.
- Billing reports by practitioner. These show who does the billing and how stable each clinician's income has been.
- Business bank statements. These tie the billing reports to the cash that actually arrived.
- Contractor agreements and the accountant's payroll tax view. Written agreements for every contractor clinician.
- The sale contract, lease and assignment consent. Including the seller's handover and restraint terms.
- The equipment list. With ages and any existing finance owing.
If you are not sure which of these your file is missing, check eligibility first, or download the Whitecoat loan pack to see the full document list.
An allied health practice loan is usually a business loan for goodwill, equipment finance for the treatment rooms and a line of credit for the handover, sized on the practice's maintainable earnings. Lenders care most about who does the billing, whether contractor clinicians will stay, whether the contractor model carries a payroll tax exposure and how concentrated the referral and funding sources are. Recent Medicare and NDIS changes matter because they change referral flow and claim timing, which shows up in the bank statements.
Key takeaway: settle the contractor agreements, the payroll tax question and the lease assignment before you apply, and the goodwill becomes much easier to fund.Frequently Asked Questions
Allied health practices are usually valued for sale on maintainable earnings after paying the owner a market wage for their own clinical work. The value is then adjusted for how much of the billing depends on the seller, how stable the contractor team is, where referrals come from and how long the lease has left. The goodwill is what is left after the equipment and stock are counted.
Some lenders give physiotherapists and psychologists special practice loan terms, but usually narrower ones than doctors and dentists receive. Some health lending policies list allied professions by name with lower limits or more documents, while others assess an allied health practice acquisition as a standard business loan. Eligibility varies by lender and is checked at the time of applying.
Whether payroll tax applies to contractor physios at your practice depends on your state's relevant contract provisions and the terms of your contractor agreements. State guidance after the Thomas and Naaz decision is written for medical centres and GPs, as covered in medical practice acquisition loans, and does not address allied health practices directly. Ask your accountant to review the arrangements before you buy, because a lender will ask.
Buying an allied health practice with no deposit is possible with some lenders, but usually only where the practice's earnings are strong and the buyer can offer extra security, such as equity in a home. Without that, lenders typically expect the buyer to contribute part of the price. Terms vary by lender and by profession.
If a contractor physio leaves, your practice loan stays in place and the repayments do not change, but the income that services it may fall. That is why lenders look at contractor retention and billing by practitioner before approval, and why a practice with trading history across several stable clinicians is easier to fund. Keeping a buffer on a line of credit helps cover the gap while you recruit.
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