Dental Practice Funding: Loans for Startups, Acquisitions & Equipment

What it actually costs

Starting from scratch: Leasehold improvements and office buildout run $150,000 to $350,000. Dental equipment — chairs, X-ray machines, CAD/CAM systems, sterilization equipment — costs $100,000 to $300,000. Technology and practice management software add $15,000 to $40,000. Initial supplies and inventory run $10,000 to $20,000. Then you need working capital to cover 6 months of expenses while building your patient base — often $100,000 to $200,000.

Acquiring a practice: The purchase price is typically 60-80% of annual collections for a general practice, more for specialty practices. On top of the acquisition cost, budget for transition expenses — rebranding, system upgrades, any equipment that needs replacing — usually $50,000 to $100,000. Many sellers also require you to keep existing staff and honor their fee schedules during a transition period.

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Expanding: Adding operatories, upgrading to digital imaging, investing in a CEREC machine ($100,000+), or opening a second location. These are smaller but still require real capital.

Your funding options

Dental-specific practice loans

Several lenders specialize exclusively in dental practice financing — companies like Bank of America Practice Solutions, Provide (now part of Fifth Third Bank), and specialty divisions at Wells Fargo and US Bank. These lenders understand dental economics better than generalists. They'll finance up to 100% of a practice acquisition or startup with terms up to 10-15 years. Rates are competitive because dental practices have historically low default rates. If you're a dentist, start here.

SBA loans

SBA 7(a) loans are excellent for dental practices, especially acquisitions. You can borrow up to $5 million with up to 25-year terms. The SBA will finance a practice acquisition with as little as 10% down in some cases. The process is slower (60-90 days), but the terms are often the best you'll find. Many dental-specific lenders are also SBA-approved, so you can get the specialty expertise with SBA-backed rates.

Equipment financing

Dental equipment holds its value well and is easy for lenders to underwrite. You can finance individual pieces — a CBCT machine, an intraoral scanner, a new chair setup — with the equipment as collateral. Terms run 5-7 years with rates between 5% and 12%. This is ideal for existing practices that need to upgrade technology without tapping into their operating line.

Practice acquisition financing

If you're buying an existing practice, there are specific loan products designed for this. They're structured around the practice's historical cash flow — the lender looks at the last 3-5 years of collections, expenses, and profitability to determine how much debt the practice can support. Down payments range from 0-20% depending on the lender and the strength of the practice you're acquiring.

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What lenders look for in a dental practice

Dentists are the golden children of small business lending, and here's why: high income potential, strong demand regardless of economic conditions, specialized skills that create a moat, and historically low default rates. That said, lenders still evaluate you carefully.

For startups, they want to see your dental school credentials, any residency or specialty training, and ideally some associateship experience (2-3 years is the sweet spot). Your personal credit score matters — most dental-specific lenders want 680+, though some will go to 650. They'll also want to see that you've saved some cash, even if the loan covers 100% of the project.

For acquisitions, the practice's financials drive the decision more than yours. Lenders analyze collections trends, overhead ratio, patient retention, payer mix (too much Medicaid can be a flag), and whether the seller's production is realistic for you to maintain. A practice with declining collections is a harder sell regardless of your qualifications.

How to improve your chances

Get a practice valuation before you negotiate. Whether you're buying or building, understanding what comparable practices sell for in your market gives you negotiating leverage and shows lenders you've done your homework. Overpaying for an acquisition is the fastest way to start underwater on your loan.

Work with a dental-specific CPA. Generic accountants don't understand dental practice economics. A dental CPA can structure your projections, tax strategy, and entity formation in a way that makes sense to lenders who specialize in this space. The $2,000 to $5,000 you spend on good dental-specific accounting advice will save you multiples in loan terms.

Don't over-build. It's tempting to build the dream practice on day one — top-of-the-line everything, gorgeous buildout, the latest technology. But lenders (and your bank account) will be happier if you right-size your initial investment to your realistic patient volume. You can always upgrade equipment and add operatories as you grow.