Nobody Talks About the Money Part Until It's Too Late
We've helped launch over 155 Direct Primary Care practices. And here's the thing nobody puts on the brochure: almost every one of them needed outside capital to get started.
Not because DPC is expensive to launch—it's actually one of the leanest medical startups out there. But between a lease deposit, EHR setup, basic equipment, and enough runway to pay yourself while your panel fills, most physicians need somewhere between $50,000 and $150,000 in startup capital.
The question isn't whether you'll need financing. It's which kind makes sense for your situation.
SBA 7(a) Loans: The Gold Standard (If You Can Wait)
SBA 7(a) loan is a government-backed small business loan with favorable terms, typically offering lower interest rates and longer repayment periods than conventional loans, designed specifically for small business startups.
The SBA 7(a) is the most common path we see physicians take, and for good reason. Terms are favorable, rates are competitive, and you can borrow up to $5 million (though most DPC startups need a fraction of that).
Here's what the numbers actually look like:
| Feature | SBA 7(a) |
|---|---|
| Loan range | $25K–$5M |
| Interest rate | Prime + 1.5–2.75% (variable) |
| Repayment term | 7–10 years |
| Down payment | 10–20% |
| Time to close | 60–90 days |
| Personal guarantee | Yes |
The catch: SBA loans take time. Expect 60–90 days from application to funding, sometimes longer. If you're in a hurry to sign a lease, this timeline can create real tension. You'll also need a solid business plan—not a napkin sketch, but a real financial pro forma.
Best for: Physicians with 3+ months of planning runway who want the lowest monthly payments.
Conventional Lines of Credit
A traditional business line of credit from your bank gives you a pool of capital you can draw from as needed. You only pay interest on what you use.
| Feature | Line of Credit |
|---|---|
| Typical range | $25K–$250K |
| Interest rate | 7–12% (variable) |
| Repayment | Interest-only draw period, then principal + interest |
| Time to close | 2–4 weeks |
| Collateral | Sometimes required |
The upside: Speed and flexibility. You don't pay interest on money sitting in the account, and you can draw as expenses arise rather than taking a lump sum upfront.
The downside: Higher rates than SBA, and the variable rate means your costs can climb. Some banks also require existing revenue to qualify, which is tough for a startup.
Best for: Physicians with existing banking relationships who want flexibility and faster access.
Equipment Financing
If a big chunk of your startup cost is medical equipment, point-of-care testing devices, or office build-out, equipment financing lets you borrow against the equipment itself.
| Feature | Equipment Financing |
|---|---|
| Typical range | $10K–$500K |
| Interest rate | 5–9% (fixed) |
| Repayment term | 3–7 years |
| Down payment | 0–15% |
| Collateral | The equipment itself |
Why it works for DPC: Your equipment serves as collateral, so qualification is easier than unsecured loans. Rates tend to be reasonable, and fixed terms make budgeting predictable.
The limitation: It only covers equipment. Your lease deposit, marketing budget, and living expenses for the first six months still need another funding source.
Best for: Practices with significant equipment needs (point-of-care labs, exam furniture, IT infrastructure).
Self-Funding and Savings
Some physicians fund their startup entirely from savings, a home equity line, or a combination of personal resources. We've seen this work well—when the physician has realistic expectations.
When self-funding works:
When it doesn't:
We've seen physicians launch successfully on $40K of personal savings, and we've seen others regret not taking an SBA loan because the financial pressure during months 3–6 was overwhelming.
Which Path Fits Your Situation?
There's no universal answer. Here's a quick framework:
Choose SBA 7(a) if you have time to plan, want the lowest payments, and don't mind paperwork.
Choose a line of credit if you need faster access, have an existing banking relationship, and want flexibility.
Choose equipment financing if your biggest expense is equipment and you want to preserve cash for operating costs.
Choose self-funding if you have substantial savings, low personal overhead, and a high tolerance for financial risk.
Most physicians we work with end up using a combination—an SBA loan for the bulk of startup costs plus a small line of credit for operating expenses during the ramp-up period.
The Real Cost Nobody Mentions
Financing isn't free money. A $100K SBA loan at 8.5% over 10 years costs about $1,240/month. That's manageable once your panel hits 80–100 patients, but it's a real expense during months 1–6 when you might have 15 patients.
Build your financial model around realistic enrollment timelines. We typically see 8–15 new patients per month in the first year, with acceleration after month 6 as word-of-mouth kicks in.
Get the Numbers Right Before You Sign
Want help building a financial model that accounts for your specific market, pricing, and timeline? Our team has seen the actual numbers from 155+ DPC launches—not projections, real results.
Explore practice financing options or schedule a discovery call to walk through your specific situation.