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How much can a medical practice borrow in Canada? Learn how revenue, cash flow, debt, credit and loan purpose determine the available amount.
A medical practice may need $40,000 to bridge payroll, $150,000 to hire another practitioner, or substantially more to expand a clinic. The amount available is not determined by the practitioner's profession or annual billings alone.
Credit looks at how much cash remains after payroll, rent, supplies, existing financing and other operating expenses. The requested amount also needs to fit the reason the practice is borrowing.
Quick Answer: A Canadian medical practice may qualify for a five-figure working capital loan, several hundred thousand dollars for a larger expansion, or potentially more through secured or structured financing. The actual amount depends on practice revenue, free cash flow, existing debt, operating history, credit, collateral and the intended use of funds.
There is no single borrowing limit that applies to every Canadian medical practice. Different financing products have different maximums, and the practice still needs to demonstrate that it can support the payment.
Mehmi Financial Group's current public working-capital program lists typical financing amounts from $20,000 to $5 million, depending on factors such as monthly revenue, operating history and repayment ability. (Mehmi Group)
That is a program range, not a promise that every clinic can borrow $5 million.
A solo physician practice generating $500,000 per year and requesting $750,000 of unsecured working capital creates a very different credit question from a multi-location medical group producing several million dollars of annual revenue.
The amount should therefore be determined by:
Medical, dental and allied-health businesses can review Mehmi's medical, dental and wellness financing options when deciding which type of financing fits the request.
Most physician practices are small businesses, which is why borrowing needs can vary significantly from one clinic to another.
ISED's Canadian Industry Statistics counted 107,100 physician-office establishments in Canada in 2025. Of employer establishments, 88.6% had fewer than five employees, and 99.9% had fewer than 100 employees. (ISED Canada)
ISED also reports average 2024 SME revenue of approximately $462,200 for offices of physicians in its financial-performance dataset. (ISED Canada)
That average should not be used to calculate a loan amount.
A specialist clinic, family practice, surgical office and multi-physician group can have completely different revenue, staffing and overhead.
It does show why a universal answer such as "medical practices can borrow 20% of annual revenue" would be misleading.
The individual practice's financial capacity matters more than an industry average.
Revenue establishes the size of the practice, but cash available after expenses usually matters more than gross billings.
Consider two clinics each generating $2 million annually.
Practice A has moderate rent, stable staffing costs and limited existing debt.
Practice B has recently renovated, carries substantial equipment financing, employs more staff and has several other loan payments.
Their revenue is identical.
Their borrowing capacity may not be.
Credit wants to understand what happens between revenue entering the business and cash remaining at the end of the month.
Major expenses can include:
A practice producing high revenue but very little remaining cash may support less new debt than a smaller clinic with stronger margins and lower existing obligations.
The payment needs to fit comfortably inside the practice's recurring cash flow, including during a slower month.
One useful concept is the debt-service coverage ratio, or DSCR.
In plain English, DSCR compares the cash available to pay debt with the practice's required loan and lease payments.
Consider an illustrative Ontario medical practice.
The clinic generates about $180,000 per month in collections.
After payroll, rent, supplies and other normal operating expenses, approximately $36,000 per month remains available before scheduled business debt.
Existing equipment and business financing requires $12,000 per month.
If proposed financing adds another $8,000 monthly payment:
Total debt payments = $20,000
Simplified coverage:
$36,000 ÷ $20,000 = 1.80 times
Now consider a much larger request requiring another $19,000 monthly payment.
Total debt service becomes:
$12,000 + $19,000 = $31,000
Coverage falls to:
$36,000 ÷ $31,000 = 1.16 times
The clinic still has the same $180,000 of monthly revenue.
But the second loan leaves far less room for a physician absence, slower collections, unexpected payroll costs or a major repair.
Different financing providers calculate repayment capacity differently. This example is illustrative, not a universal approval formula.
Use Mehmi's business loan calculator to compare different borrowing amounts before deciding how much to request.
Recent Canadian data suggests that authorized business loans often remain far below the maximum amounts available under commercial financing programs.
ISED's 2025 Credit Conditions Survey found that 20% of Canadian small enterprises requested debt financing in 2025, and the average amount authorized among respondents receiving financing was $140,148. (ISED Canada)
That figure covers industries across Canada. It is not specific to medical practices.
Business size made a major difference.
The same survey reported average authorized amounts of:
Those numbers are not qualification limits.
They illustrate a practical point: larger established businesses generally have more capacity to support larger financing obligations.
A five-person clinic and a 40-person medical group should not expect identical borrowing capacity.
A financing request is easier to support when the amount is tied to a specific business need instead of being chosen as a round number.
Suppose a clinic requests $300,000.
Credit will want to know what $300,000 solves.
A clear breakdown might be:
Now the requested amount can be tested against the business plan.
Compare that with:
"We want $300,000 for expansion."
The second request gives credit no way to determine whether the amount is reasonable.
Medical practices looking for cash to cover staffing, supplies or temporary billing gaps can review working capital financing.
Calculate the maximum cash deficit during the ramp-up period rather than borrowing based on the expected annual billings of the new practitioner.
Consider an illustrative family practice adding another physician.
Management estimates that the new provider will create these incremental costs during the first six months:
Total incremental cost:
$115,000
The practice expects the new physician to generate revenue throughout the same six months, but collections build gradually.
Management forecasts that the largest cumulative cash deficit will be $72,000 in month three.
The clinic can safely contribute $22,000 from cash without weakening its operating reserve.
The actual financing gap is therefore approximately:
$72,000 - $22,000 = $50,000
That gives the practice a defensible starting point for the request.
Borrowing the full $115,000 would provide a larger cushion, but it would also create a larger payment.
The goal is not to obtain the maximum approval.
It is to fund the actual cash gap safely.
Potentially. Larger multi-practitioner practices can support larger financing when revenue, profitability and balance-sheet strength justify the exposure.
A group with several doctors, multiple revenue streams and years of stable financial performance may have much greater debt capacity than a solo clinic.
Credit may look more deeply at:
Larger requests also tend to require more financial disclosure.
A $40,000 working-capital request may be relatively straightforward.
A $750,000 or $1 million expansion should be expected to receive deeper analysis of profitability, leverage and repayment ability.
A line of credit can provide substantial flexibility, but the approved limit still depends on the practice's financial strength.
A line of credit is useful when the clinic does not need the entire financing amount at once.
For example, a multi-practitioner clinic may experience recurring timing differences between payroll and collections.
Rather than borrowing $300,000 as a lump sum and carrying the full balance continuously, the practice may prefer a revolving facility that can be drawn when required and repaid as cash comes in.
Mehmi's current public business line of credit page lists revolving facilities of up to $5 million for qualifying businesses. (Mehmi Group)
Again, that is a product maximum, not the amount every clinic will receive.
A line's usefulness comes from flexibility, not simply having the largest possible limit.
Potentially. Collateral can support a larger transaction when the practice owns suitable business assets, but collateral does not eliminate the need for repayment capacity.
Assets might include qualifying medical equipment, commercial property or other business assets.
A secured structure can reduce the financing provider's loss risk compared with an entirely unsecured loan.
That can affect available amount, pricing or term.
However, a clinic cannot simply pledge a $500,000 piece of equipment and assume it can borrow $500,000.
Credit also considers:
In Quebec, security registrations commonly involve the RDPRM rather than PPSA.
Collateral helps support the credit case. It does not replace it.
Usually, large identifiable equipment purchases should be compared with equipment financing before increasing the working-capital loan.
Suppose a clinic's planned expansion costs $400,000:
Borrowing the full $400,000 as general working capital may not be the best structure.
The $225,000 machine is a long-life asset with identifiable value.
It may be more appropriate to finance the equipment separately and preserve the business loan for payroll, supplies and operating liquidity.
This also avoids using short-term cash-flow financing for an asset expected to generate value for many years.
For more detail, see Mehmi's guide to medical and dental equipment financing in Canada. (Mehmi Group)
The Canada Small Business Financing Program has a maximum of $1.15 million per borrower, but important sub-limits apply.
Eligible businesses operating in Canada generally need annual gross revenue of $10 million or less.
Current program limits allow up to:
for a combined maximum of $1.15 million. (ISED Canada)
However, a medical practice should not interpret that as $1.15 million of unrestricted working capital.
Within the term-loan component, a maximum of $500,000 can be used for equipment and leasehold improvements, and the applicable sub-limit for intangible assets and working capital is $150,000. The additional CSBFP line of credit can provide up to $150,000 for working capital. (ISED Canada)
Participating financial institutions still make the credit decision.
Program eligibility does not guarantee that a practice will receive the maximum amount.
Every existing payment consumes part of the practice's available cash flow before a new loan is considered.
Medical and dental practices can accumulate several obligations over time:
A clinic generating $45,000 per month before debt but already paying $30,000 toward existing financing has much less room than a similar practice paying $10,000.
That is why a debt schedule is useful.
List each obligation with:
Do not make the credit analyst reconstruct the practice's existing debt from dozens of bank-statement withdrawals.
Yes. Large distributions can weaken the business's liquidity even when the practice itself is profitable.
Professional corporations frequently distribute earnings to owners.
That is normal.
Problems arise when nearly all available cash is removed while the corporation is simultaneously requesting new debt for operating expenses.
Consider a practice producing $500,000 of annual cash flow before owner distributions.
If $450,000 is removed every year, the corporation may retain very little liquidity.
A financing review can reasonably ask why the business needs another $200,000 loan while substantial cash continues leaving the company.
Owner compensation should be considered when measuring sustainable repayment capacity.
As the financing amount increases, expect the lender to require stronger evidence of historical performance and current repayment ability.
A well-prepared application can include:
If revenue recently changed materially, explain why.
A new physician joining the clinic, a temporary practitioner leave, renovations or opening an additional location can all distort short-term results.
The explanation should reach credit before the reviewer has to ask.
A strong request is built around the actual cash requirement and conservative repayment capacity, not the largest financing amount available.
Consider an illustrative Toronto specialist clinic.
The practice has operated for nine years and generates approximately $3.2 million in annual revenue.
Management wants to expand into adjacent space, add another specialist and hire three employees.
The complete project will cost $420,000.
Of that amount, $180,000 relates to medical equipment that management plans to finance separately.
The remaining business-loan requirement includes:
Total:
$240,000
The clinic can safely contribute $60,000 without reducing its preferred operating reserve.
The resulting business-loan request is:
$180,000
Management provides financial statements, current interim results, recent bank activity, an existing debt schedule and a realistic forecast for the new specialist.
The practice also tests repayment assuming the specialist takes three months longer than expected to reach normal billings.
The credit story is clear:
Established practice. Defined expansion. Equipment financed separately. $180,000 identifiable cash gap. Strong historical revenue. Conservative repayment plan.
That is much more useful than requesting $500,000 simply because the practice believes it could qualify.
Potentially. A $500,000 request generally requires significantly more cash flow and financial disclosure than a smaller working-capital loan. Credit may review full financial statements, current interim results, existing debt, owner distributions, practice revenue and collateral. A high professional income alone does not establish that the corporation can safely support $500,000.
There is no universal solo-practice limit. A smaller established practice may need only a five-figure working-capital facility, while a strong specialist practice may support substantially more. Revenue, free cash flow, existing debt, credit and the actual use of funds determine the amount rather than practitioner status alone.
Revenue is an important input, but there is no reliable fixed percentage of annual billings that applies to every practice. Credit also considers operating expenses, existing payments, cash reserves and banking history. Two clinics with the same annual revenue can have very different borrowing capacity.
Potentially, but a new practice has less historical business cash flow to support a large request. Professional experience, owner credit, available equity, location, projected patient volume and a realistic startup budget become more important. Larger startup requests usually require stronger documentation than an established clinic seeking the same amount.
Equipment can support a separate secured financing structure because it is an identifiable business asset. That does not automatically increase an unsecured working-capital approval. Often the better approach is to finance major equipment separately and preserve general business borrowing capacity for payroll, supplies and expansion costs.
Potentially, particularly for a larger established group practice, acquisition, substantial expansion or secured transaction. A request at that level should be expected to require detailed financial analysis. The practice needs enough historical and projected cash flow to support the obligation after accounting for all existing debt.
Start with the project's maximum cash deficit. Subtract the amount the practice can safely contribute while preserving its operating reserve. Then stress-test the proposed payment against slower collections or delayed growth. The safest borrowing amount is usually the amount required to solve the problem, not the maximum approval available.
Medical practices can potentially access substantial business financing, but there is no single revenue multiple or industry limit that determines the right amount.
Before applying, calculate the exact use of funds, cash remaining after normal expenses, current monthly debt payments and the payment the practice could still manage if collections or growth are slower than expected.
For a review of your medical practice business-loan amount in Canada, call Mehmi Financial Group at 833-863-4644 or submit your request through the contact page.
Approval, financing amount, timing and terms are subject to credit review, documentation and current market conditions.
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