Refinancing Practice and Fit-Out Loans as a Psychology Practice Owner

A psychology practice owner can refinance the loan that bought the practice or a partner's share, the loan on owned consulting rooms, the loan on the fit-out and IT, and the overdraft that carries wages while invoices are outstanding. This guide costs each one, looks at refinancing each in turn and then combines them.

Has the monthly payment on buying out a former partner grown heavier than the fees the extra caseload brings in? Is the overdraft paying rent and reception while an employee assistance provider or a workers compensation insurer works through your invoices? Do you own your consulting rooms, now worth more than is owed on them, while the buyout debt sits at a higher rate with another lender? Have you kept putting off deciding which loan to tackle first because each day is full of sessions?

The Psychology Board of Australia's figures in the Ahpra annual report for 2024/25 put the number of registered psychologists at 50,409. For the owners among them, the largest debts are for the practice itself: goodwill, a partner's share and, for some, the rooms. Goodwill means what a practice is worth over and above its assets, because clients and referrers choose it.

Refinancing those loans is something Ardent Capital Group would be glad to take on with you, whether that means moving one of them or bringing several together.

The loans a psychology practice carries

A psychology practice earns from its psychologists' time and its referrers' trust. It needs little equipment: chairs, a desk, a computer and a lockable cabinet in each room, with practice management software and telehealth video. The borrowing goes elsewhere.

• Buying the practice or a partner's share. This loan pays for goodwill: the client list and the referral relationships, which a lender cannot repossess and sell. It is secured by a general security agreement over the business, a guarantee from each owner, or property. Under a general security agreement, the lender holds a claim over what the practice owns. With a guarantee, the owner personally promises to repay if the practice cannot.
• The consulting rooms. Some owners hold a strata suite, a separately titled unit in an office or medical building. Others lease rooms.
• The fit-out and IT. Soundproofing between rooms, solid-core doors and seals, a waiting area, computers and screens, and the phone and network set-up.
• Working capital. An overdraft or line of credit that pays wages, rent and contractors until Medicare claims, EAP invoices and insurer accounts are settled. EAP is an employee assistance program, which an employer pays for so its staff can see a counsellor.

Personal borrowing counts as well. A lender adds the owner's own mortgage, car finance and card limits to the practice's debts before deciding how much it will lend.

Example: one group practice's four loans

Setting a practice's loans out together shows which one takes the most from each month's session fees. These figures are illustrative. The owner bought out a former partner's half of the business, holds the strata suite the practice works from, and refitted two rooms with soundproofing and new computers. Each loan has its own security and monthly cost.

Rounded figures. The rates are assumed for the maths and are not quotes; the suite is assumed to be valued at $980k.

The practice owes $240k on the partner buyout, at an assumed 10.5%, with 48 months left. Its $6,145 is the largest share of the $12,248 leaving the account each month.

How refinancing changes a practice loan

A refinance swaps a practice loan for a new one on different terms, which changes how much of the fees go to lenders and for how long. Three settings on each loan can be moved: its rate, its term and the asset that secures it.

• Rate. Cheaper pricing over an unchanged number of months cuts both the monthly payment and the interest bill. Each lender settles its own pricing from the practice's income, the asset securing the loan and the owners' credit history.
• Term. A loan's term is the length of time it runs, counted in months or years. More months shrink each payment and enlarge the interest bill, because interest keeps running for those extra months. A longer term can still suit a practice through a set stretch, such as the months while a newly hired psychologist builds a caseload.
• Security. This is what the lender can fall back on if the loan goes unpaid. Borrowing against property is generally priced below borrowing against a general security agreement and a guarantee. The property is then pledged for the debt.

An amortising loan runs down to nil by the end of the term, unless it ends in a balloon, a lump sum left to the final repayment. With each payment, the interest on what is still owed is met first, and the remainder reduces the balance. The balance is highest at the start, so the interest portion is too, and it shrinks month by month.

Worked example: year one on the buyout loan

Following the buyout through its first year shows how much of each payment goes to interest early on. On $240k at an assumed 10.5%, interest in the first month is $2,100, so $4,045 of the $6,145 payment comes off the balance. Twelve months on, about $51k has been repaid and about $189k is owing, with about $22.8k paid in interest along the way.

Refinancing each loan in a psychology practice

The rooms, the soundproofing and the computers each last a different length of time, so each loan is easiest to judge against what it paid for.

The loan on an owned consulting suite

Owning the rooms gives the owner a property to borrow against as well as a loan to repay. A suite of consulting rooms in an office or medical building counts as ordinary commercial security, and can be borrowed against to 80% of its value. That percentage is called the LVR, short for loan-to-value ratio. No major bank publishes a separate figure for a practice that occupies its own suite. Each decides on the file in front of it, so the lender chosen sets where your suite ends up. On term, a non-bank lender can stretch a commercial property loan to 25 or 30 years, where a bank's published range is commonly 10 to 15.

Moving this loan can bring a new rate, lender or term, and can release equity built up since the purchase. Equity is the suite's value less what is owed on it. In the example, $430k is owing against a suite assumed to be worth $980k, about 44% of its value. Our page on refinancing psychology consulting rooms covers the property loan itself.

It helps to check the fixed-rate end date and any break cost first. A break cost is a fee for ending a fixed rate early. The more rates have fallen since the rate was fixed, the bigger it is. It also helps to confirm which entity holds the suite: the practice company, a family trust or a self-managed super fund, which its own members run. Rooms held in a self-managed super fund cannot secure the practice's other debts. A refinance inside the fund is limited to the balance owing on the suite.

Borrowing to buy the practice or a partner's share

This loan paid for goodwill, whether in the whole practice or a partner's share. A purchase or buyout loan funds what the practice earns from its clients and from referrals by GPs, psychiatrists and paediatricians.

Refinancing it can lower the rate, change the term or move it onto property. The longer it runs, the longer the owner keeps paying for a share of a business that has since changed. Psychologists leave and join, and clients loyal to the partner who sold can follow them out. Stretched to the length of a property loan, a buyout can still be owed long after that change.

Consulting room fit-out, computers and practice software

A psychology fit-out is built so a conversation in one room cannot be heard in the next. It covers what clients do not see: insulation in the walls and ceiling between rooms, solid-core doors and acoustic seals. Some suites add a white-noise unit in the waiting area. Practice management and telehealth software is a monthly subscription, so it sits in running costs, not in a loan.

In leased rooms, the soundproofing stays in the building when the practice leaves. A make-good clause, which sets how the premises are handed back at the end of the lease, may require it to be stripped out. A lender sets the term of a fit-out loan against how long the lease has to run, counting any renewal option. That is the lease's right to extend for a further term.

Computers and screens are replaced within a few years. A short term on them avoids still owing on a laptop that has already been swapped out. So does one deal that clears the old loan on the computers and funds the replacements.

The overdraft, invoices waiting to be paid, and the ATO

A practice with a full diary can still be waiting on its money, because not every session is paid for on the day. Clients who pay at the appointment pay on the day. Bulk-billed sessions, where the Medicare benefit is accepted as the full fee, are paid once the claim is lodged. Employee assistance providers, workers compensation insurers and motor accident insurers pay against invoices on their own terms. Insurers pay for treatment they have approved. The overdraft carries the practice across that gap.

Converting the overdraft to a term loan clears it, but takes away the buffer the practice draws on while the next invoices are outstanding. Unpaid GST or PAYG withholding owed to the ATO, even under a payment plan, can be paid out in a refinance. GST means the goods and services tax, while PAYG withholding is the tax taken out of staff pay. The lender has to be comfortable with where that debt has got to. Until it is paid, the ATO keeps adding its general interest charge, its interest on tax paid late.

Putting the practice's loans together

The buyout and fit-out loan can now be weighed as a pair, or added to the suite.

Worked example: $300k of practice debt, handled four ways

These two business loans end within four years and carry far higher rates than the property loan on the suite. The worked example takes the buyout and the fit-out loan, $300k between them, and compares each option with keeping both loans as they are. The loan on the suite stays as it is unless both loans are added to it. The overdraft stays as it is throughout.

Rounded figures on assumed rates, which are not quotes. Fees for clearing the old loans early, establishment fees, valuation and legal costs are not included.

Adding both loans to the suite brings the monthly figure down by $6,059, to $2,411. It also gives the largest total: about $156k more than carrying on, with the buyout repaid over 18 years instead of four. A lower rate on the buyout alone saves about $9k without lengthening anything.

The options with the lowest monthly figures stretch the debt over more years, and those years carry the extra interest. Which one fits depends on the practice's income through the year, its hiring plans and whether the owner wants the suite to secure the business's debts. We would price the options against current payout figures. A payout figure is a lender's written statement of the amount that clears its loan on a given day. The owner's chosen option is then presented to lenders that suit a psychology practice.

What can secure the new loan

The practice's debt can be secured by different things, from the business's own assets to the owner's home.

• The consulting suite. Where the owner holds the rooms outside super, the suite can secure business debt as well as its own loan, as in the worked option that adds both loans to it.
• A general security agreement. Registered over the business's assets on the PPSR, the national register of security interests in personal property. It does not cover land, buildings or fixtures to land. A refinance discharges the old registration at settlement, and the incoming lender lodges its own.
• A guarantee from each owner. Directors of a practice company guarantee its business loans personally.
• The home. A loan secured on your home is generally cheaper and longer than a business loan, but your home then becomes security for the practice's debt. That decision belongs to the owner, knowing that in the worked example, adding both loans to the suite adds about $156k to the total repaid. Where the home already secures a practice loan, the next refinance can aim to release it. Our home loans for psychologists cover the home loan itself.

Two owners, or the suite in a separate entity

A practice owned by two psychologists, with its rooms held apart, gives a lender several sets of accounts to read. Where two psychologists own the practice company and the suite sits in a family trust, the lender assesses the company, the trust and both guarantors, including any lease between the trust and the practice. When one owner is leaving, the refinance can fund the buyout and release that owner's guarantee, subject to the lender's approval.

Preparing a refinance application for the practice

A practice's year has quiet weeks over summer and busy stretches as new psychologists fill their diaries, and the statements show both.

Getting ready

A few checks before applying keep the practice from refinancing at the wrong moment.

• Written payout figures. Each lender can provide one, and it shows any break cost or early payout charge. An early payout charge is a fee a loan contract can set for clearing it before its term ends. If either charge on the buyout or fit-out loan outweighs the saving, compare again nearer the end of the term.
• A full year of income. If the last few months include the Christmas and New Year break, or a psychologist leaving, twelve months of statements show the income on either side of it.
• Tax lodgements up to date. A lender works from the BAS (business activity statement) and returns that have been lodged, alongside the ATO account.

The overdraft limit, and the loans on the suite and the buyout, can each carry a scheduled review. The lender then asks about recent income from Medicare, EAP work and insurers, and about anything new, such as a psychologist joining. That is a sensible point to update the figures and see what other lenders offer. We explain how a psychology practice can get ready for a lender's review in our guide.

Medicare, private and EAP income

Fees reach a psychology practice from clients, Medicare, EAP providers and insurers, and each lands in the account differently.

• Medicare through Better Access. Clients with a mental health treatment plan, prepared by a GP, or a direct referral from a psychiatrist or paediatrician, can claim a Medicare benefit under the Better Access initiative. It covers up to 10 individual sessions a calendar year. Further sessions in that year attract no Better Access benefit. Since 1 November 2025, plans and referrals come from the GP at the practice where the client is enrolled in MyMedicare, or from their usual medical practitioner. Enrolling in MyMedicare means a client registers with one regular general practice.
• Private fees. Clients paying without a referral, and Medicare clients paying a gap above the benefit, show as card or bank receipts on the day of the session.
• EAP and insurer work. These arrive as larger, less even deposits. A debtor list sets out each unpaid invoice and its age.
• Contractors and employees. Contractor psychologists who keep a percentage of their billings show as payments to contractors. Employed psychologists, the practice manager and reception show as wages, with super and PAYG beside them. Whether a psychologist is a contractor or an employee is a question for the accountant and, where needed, a lawyer.

Documents for a practice refinance

Some of this already sits in the practice software, the accountant's files and each lender's letters.

• Every lender's payout figure in writing, and the practice's ATO statement of account
• Statements for each business account, and the latest BAS
• Two years of accounts and tax returns for the company and any trust, plus year-to-date figures
• Monthly billing reports split by Medicare, private, EAP and insurer income
• Contractor and employment agreements for each psychologist
• The lease, or the contract of sale and rates notice for an owned suite
• The buyout or practice sale agreement
• Statements for every owner's and guarantor's mortgage, vehicle finance and cards

Psychologists' questions about refinancing

I am three years into the loan I used to buy out my old business partner. Can I refinance it now?

Subject to the lender and the payout figure, it can. A buyout loan can be refinanced part-way through its term. The statements since the buyout show whether the clients and referrers stayed after the partner left.

Most of my income is Medicare. Does a lender treat it differently from private fees?

Both are fee income. Bulk-billed sessions are paid as Medicare deposits, and the billing reports line up with them on the bank statements.

My contractors keep a share of what they bill. Does the lender count the full fees or only my share?

Practice income is what reaches the practice's account. Where the practice collects the full fee and pays the contractor's share out, both lines appear. Where contractors collect their own fees and pay the practice a service fee, only that fee is practice income.

Can I use the equity in our consulting suite to pay off the buyout loan?

You can, where the suite is held outside super, its value supports the larger loan and the lender agrees. Adding both loans to the suite in the worked example gives a lower monthly figure and a larger total.

An insurer and two EAP providers owe me a lot in unpaid invoices. Does that stop a refinance?

Not necessarily. Unpaid invoices are money owed to the practice, and an aged debtor list from the practice software shows a lender how long each has been open.

I rent my rooms. What can I offer a lender as security?

A general security agreement over the practice, a guarantee from each owner and, if you choose, property you own. The computers can secure their own loan.

Can I move the buyout loan and keep the overdraft with my current bank?

You can, as the loans do not have to move together. A new lender may ask to hold the overdraft as well, so we would check that before an application goes in.

I'm about to bring on two more psychologists. Does that change the timing?

It changes what the statements show. Before they start, the statements show the current team's income. Afterwards they show the new wages or contractor payments, then the extra fees as caseloads build.

My partner co-owns our house. Do they have to sign anything?

Only where the house is offered as security. Every owner of a property signs the mortgage over it, and a lender may also ask a co-owner to guarantee the loan.

Does a conversation with a broker go on my credit report?

No. Requesting payout figures and talking it through with us leaves no mark. A formal application is listed against the practice company and each director, so it goes only to lenders whose policy suits the practice.

Talking through your practice's loans

A psychology practice borrows for goodwill, rooms, soundproofing and the wait between a session and its payment, and each loan is refinanced against what it paid for and how the fees are paid. Ardent Capital Group can assist with practice purchase and buyout loans, property loans on consulting suites, fit-out loans and working capital, alongside the business loans for allied health practices we arrange. We arrange the finance to suit how the practice and the suite are owned, and your accountant confirms the tax, super and ownership detail before you sign. If you would like to look at your practice's loans together, we are here to talk them through.

Written by

Nick Chong

Managing Director, M.AppFin, Dip. Mortgage Mgmt

Nick holds a Bachelor of Agricultural Economics, a Master of Applied Finance and an Advanced Diploma in Financial Planning. He founded Ardent Capital in 2016 after more than a decade in financial planning and mortgage broking. For the past ten years he has led a team of finance specialists, mortgage advisers, brokers and credit analysts, all working to secure optimal outcomes for clients and always acting in their best interests. The team brings both a qualitative and a quantitative approach to every deal.