Quick answer
Medical centres and GP clinics borrow for new consulting rooms, medical equipment, recruiting doctors, buying a centre or its premises and managing tax obligations. Lenders look at service-fee arrangements with doctors, the Medicare and private billing mix, bulk-billing incentives, patient demand and state payroll tax exposure. Fit-outs and purchases usually suit property security; smaller equipment needs can be unsecured.
Key points
- Most centres earn service fees from contractor GPs — agreements matter.
- Bulk-billing incentives and practice incentive payments change the income mix.
- Payroll tax treatment of GP arrangements is a live issue lenders ask about.
- Expansion needs signed doctors, not just empty rooms.
- Common uses
- Rooms, equipment, recruitment, purchases
- Lenders focus on
- Doctor agreements, billing mix, payroll tax
- Property-secured
- $20k – $5m
- Unsecured options
- Typically $5k – $500k
A medical centre is a landlord, an administrator and a clinical business at once. In most centres, GPs work as contractors who bill patients and Medicare, then pay the centre a service fee for rooms, nurses, reception and systems. That model shapes everything about how a lender reads the business: the doctors and their agreements are the real engine of income.
What do medical centres usually borrow for?
- New consulting and treatment rooms. Adding capacity for more GPs, nurses or allied health.
- Medical equipment. ECGs, spirometry, minor procedure rooms, sterilisation and vaccine fridges.
- Recruiting doctors. Relocation packages, income guarantees and marketing to fill new rooms.
- Buying a centre. Purchasing a practice, its goodwill and sometimes its premises.
- Tax obligations. Funding a payroll tax or ATO liability while the centre restructures.
How do lenders look at a medical centre?
Doctor agreements. Lenders want to see the service agreements, how long each GP has been at the centre and what happens if a doctor leaves. A centre with many long-standing doctors is more resilient than one relying on two high billers.
Billing mix and incentives. Bulk billing, mixed billing and private billing produce different patient volumes and fee levels. The Department of Health’s page on bulk billing incentives in general practice explains that incentives now extend to all Medicare-eligible patients, and that the Bulk Billing Practice Incentive Program pays participating practices an additional quarterly incentive on eligible MBS benefits. A lender will ask whether you participate and how it affects service-fee income.
Payroll tax. Payroll tax treatment of payments involving contractor GPs has been a significant issue for centres. Revenue NSW, for example, has published practice note CPN 036 on relief for medical centres, with an exemption for earlier periods and a rebate linked to bulk-billing thresholds. Other states have their own approaches. Lenders want to know whether there’s any exposure.
Premises. Many centres lease; some own. A long lease or freehold makes fit-out lending easier.
Adding rooms or buying in? Check what your centre could access — no credit check at the enquiry stage.
A closer look: expanding with doctors, not just rooms
The most common mistake in medical centre expansion is building rooms before securing the doctors to fill them. Empty consulting rooms cost rent and fit-out repayments without producing service fees. Lenders know this, so they look for evidence that the new capacity will be used: signed agreements with incoming GPs, a waitlist that proves patient demand, or allied health practitioners ready to lease rooms.
Recruitment itself can be expensive. Centres may offer relocation help, marketing support or minimum income guarantees to attract doctors, particularly outside the major cities. Those costs land before the doctor’s billings build up.
A realistic ramp-up plan — how many sessions each new doctor will work in their first months and what service fees that produces — helps a lender size the facility properly. It also helps you decide whether a lump-sum loan or a line of credit suits the expansion better. Centres that arrive with that plan tend to get a facility that matches the reality of filling rooms.
Documents that help
| Document | Why it matters |
|---|---|
| Business bank statements | Service fees and other income received |
| Service agreements with doctors | The basis of the centre’s income |
| Practice reports | Appointments, billing mix and doctor sessions |
| Lease or title | Site security |
| Payroll tax records or correspondence | Any exposure or relief claimed |
Red flags for medical centre loans
- Payroll tax uncertainty with no advice or plan.
- Doctors free to leave with most of the patient base.
- Expansion without signed practitioners.
- Thin margins on a mixed-billing model after costs.
- Short lease on a heavily fitted-out centre.
Questions a lender will ask
- How many GPs work at the centre, and for how long?
- What service-fee percentage do doctors pay, and is it in writing?
- Is the centre fully bulk billing, mixed or private?
- What’s your payroll tax position?
- Who will fill the new rooms?
Illustrative scenarios
Illustrative: three new rooms. A suburban GP clinic has two doctors ready to join but no space. Adding three rooms costs $160k. The owner uses a second mortgage over an investment property so repayments sit comfortably while the new doctors build their books.
Illustrative: equipment for a procedures room. A centre wants $42k to equip a minor procedures room. Steady service-fee income supports an unsecured loan.
How to strengthen a medical centre application
Prepare a list of doctors with their start dates, sessions per week and service-fee arrangements. Add a twelve-month summary of service fees received, and a note on your billing model and any incentive programs you participate in. If payroll tax is an issue, include your adviser’s summary of your position. For expansions, attach signed agreements or letters of intent from incoming practitioners. These documents let a lender see the centre as a set of stable relationships rather than a set of rooms.
Secured or unsecured for a medical centre?
Fit-outs, purchases and anything tied to payroll tax restructuring usually suit property-secured lending from $20k to $5m. Smaller equipment needs can be unsecured, typically $5k to $500k, sized on turnover and bank statements. Co-located pharmacies and allied health clinics have their own guides, and our guide to government-funded revenue explains how lenders treat Medicare-linked income.
See what your centre could do next
Tell us what the centre needs in a 60-second enquiry. There’s no credit check when you first enquire, and your details aren’t circulated among a pack of lenders. A real person who understands service-fee models and payroll tax will call you back. Please fill in the form accurately — turnover, the amount and any property — so we can shape the right option straight away.
Frequently asked questions
How do lenders view a medical centre's income?
Most medical centres earn service fees from doctors who bill patients and Medicare directly. Lenders look at the agreements, how long doctors have stayed and how consistently service fees reach the centre's account.
Does payroll tax affect a medical centre loan?
It can. State revenue offices have focused on how payments to contractor GPs are treated for payroll tax. Some states have introduced relief or rebates with conditions. Lenders will want to know your position and any liability.
Can I borrow to add consulting rooms?
Yes, particularly if you have doctors ready to fill them. Lenders prefer expansion backed by signed practitioner agreements rather than hoped-for recruitment.
What are bulk-billing practice incentives?
The Bulk Billing Practice Incentive Program pays participating fully bulk-billing practices an additional quarterly incentive on eligible MBS benefits, shared between the GP and the practice. It changes a centre's income mix, which lenders consider.