Business funding for GP practices

A GP practice borrows mainly to buy, build or extend its surgery and to fund partners buying into the premises, because its day-to-day income comes from NHS contract payments. A lender looks at the practice’s NHS contract, the rent the NHS reimburses for the premises and the partnership agreement that holds the partners together.

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How a GP practice is paid

A practice on a General Medical Services contract receives a global sum for each weighted patient on its list, set at £130.07 for 2026 to 2027, up from £123.34. On top come Quality and Outcomes Framework payments, enhanced services, Primary Care Network income and, in dispensing practices, dispensing income. Practices on Personal or Alternative Provider Medical Services contracts are paid under their own agreements, with commissioners applying equivalent uplifts.

That income is regular and comes from the NHS. The pressure falls on costs: staff pay, locum cover and premises. Partners are self-employed and share what is left, so a practice borrows less for working capital than a trading business. What it borrows for is property.

Rent reimbursement and practice premises

The General Medical Services Premises Costs Directions 2024 came into force on 10 May 2024 and set how NHS England pays GMS practices for their premises. A practice that leases its surgery can have its rent reimbursed. A practice whose partners own the building can receive notional rent, which the directions set at the current market rental value of the premises, reviewed every three years. A practice paying off a loan on its premises can instead receive borrowing costs payments, paid monthly on the last day of the month.

Notional rent gives a lender an income to measure. A surgery owned by the partners and occupied by the practice, with rent reimbursed by the NHS, is assessed partly on that rent and partly on the partners. The valuation can be done by the District Valuer Services or, under the 2024 directions, by a chartered surveyor appointed by NHS England.

Reimbursement on a new or extended surgery depends on NHS England agreeing the project, and grants towards improvements come with a guaranteed period of use. If the partners later sell the building and lease it back, the directions carry that guarantee into the lease. Talk to the integrated care board before you commit to a build.

A new partner buying into the surgery

Illustrative example

Four partners own their surgery equally. It is valued at an assumed £1,500,000 with £700,000 of mortgage outstanding, and the practice receives an assumed £105,000 a year of notional rent. A fifth partner joins as an equal owner and borrows to buy a fifth of the equity over 20 years at an assumed 6% a year.

Equity in the building, £1,500,000 − £700,000
£800,000
A fifth share of the equity
£160,000
Share of the existing mortgage taken on alongside
£140,000
Monthly repayment on £160,000 over 20 years at the assumed 6%
£1,146.29
Annual repayments
£13,755
A fifth share of the notional rent each year
£21,000

The new partner’s share of the notional rent covers the buy-in repayments, and it also has to cover their share of the existing mortgage, which the partnership pays from the same rent. Ask the lender to show both together, and check how the partnership agreement values and buys back a share when a partner leaves.

What a lender reads in a partnership

The contract

Contract type, list size and its trend, and any concerns raised by the commissioner or the Care Quality Commission.

The partnership agreement

How partners join and leave, how property shares are valued and bought back, and what happens on death or retirement.

The premises

Freehold or lease, the remaining term, the current reimbursement and its next review, and the plan if the practice shrinks or merges.

Who the funding search covers

Partnerships borrowing £25,000 or less

The funding search through Swoop is for limited companies and LLPs, and for sole traders and partnerships borrowing more than £25,000. A small partnership borrowing £25,000 or less should go to its own bank. A partner borrowing in their own name to buy into the practice is assessed as an individual.

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Building or extending a surgery

A surgery project is a property development with an NHS-funded occupier at the end of it. Development finance funds the build in stages, and a commercial mortgage repays it once the building is in use and the reimbursed rent is agreed. Some practices lease a surgery built and owned by a third-party developer, which keeps the debt off the partners.

The lender’s questions are about the rent: whether NHS England has agreed the project and the level of reimbursement, when the rent starts, and the practice’s contract and list position. Reimbursement agreed in writing turns a development loan into a property loan with a known income.

Higher partnership profits bring pension questions. The NHS pension annual allowance for GP partners, scheme pays and pensions for professionals cover them.

Finance that fits a practice

Business loan affordability calculator

Your profit against all your loan repayments, new and existing, as the cover ratio a lender works out.

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Questions people ask

Can GP partners get a commercial mortgage on their surgery?

Yes. Lenders lend to GP partnerships against surgeries they own, and assess the loan on the practice’s NHS contract, the notional rent or borrowing costs payments it receives, and the partners. Expect the lender to read the partnership agreement and to want all property-owning partners to sign. Each partner is jointly liable for partnership debts, so the loan affects every partner’s personal position.

What is notional rent for GP practices?

Notional rent is a payment NHS England makes to a GMS practice that owns its premises, as if it were paying rent to a landlord. Under the Premises Costs Directions 2024 it is set at the current market rental value of the premises and reviewed every three years. It is paid to the practice and shared by the partners who own the building.

How do new GP partners fund a buy-in?

A new partner buying a share of the surgery borrows the cost in their own name or through the partnership, secured on the property share, and takes on a share of any existing mortgage. Their share of the notional rent helps meet the repayments. Check how the partnership agreement values the share, both on joining and on leaving, before you sign.

What happens to the surgery loan when a partner retires?

The partnership agreement sets how a retiring partner’s property share is valued and bought, by the remaining partners or by an incoming one. The lender’s consent is needed to release the retiring partner from the mortgage. Without a buyer for the share, the remaining partners can be left funding it, so agree the arrangements while everyone is still in the practice.

Finance is subject to status and to the lender’s terms. A personal guarantee makes you liable for the company’s debt if it does not repay, and it can be enforced against your own assets, including your home. Nothing here is a personal recommendation.

Funding by sector

Commercial mortgages

A commercial mortgage is a long-term loan secured on premises the business uses or a building let to tenants.

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Development finance

Development finance pays for building or refurbishing property in stages, and is repaid when the finished scheme is sold or refinanced.

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Should my business buy or rent its premises?

Buying premises can be done through the company, personally or in a pension, and each changes the tax and the funding.

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Equipment leasing

A lease lets the business use equipment for a monthly rental while the funder keeps ownership.

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All business funding

Start a funding search

Start a funding search

Funding searches run on Swoop’s platform. Swoop Finance Limited is a credit broker and not a lender, and is authorised and regulated by the Financial Conduct Authority (FRN 936513). Buzz Accounting Ltd introduces businesses to Swoop and may receive a fee from Swoop when funding is arranged. Business funding is separate from the financial advice Equity & General Financial Services Limited gives through this website. Finance is subject to status, and a lender may ask a director for a personal guarantee.

Cover for a personal guarantee

If a lender asks you to guarantee the company’s borrowing, our advisers can advise on life cover for that debt.

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