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Financing
Financing Options for First-Time Dental Practice Buyers
06/02/2025
For most first-time buyers, the biggest question isn't whether they want to own a practice, it's how to actually finance one. The good news is that dental practice acquisitions are a well-understood category for lenders, and financing is more accessible than many new dentists expect.
The most common path is an SBA 7(a) loan, which is popular because it allows relatively low down payments and longer repayment terms than a conventional loan, which helps cash flow in the early years of ownership. Conventional bank financing is also available, particularly from banks with dedicated healthcare or dental lending divisions, and some lenders specialize exclusively in dental and healthcare acquisitions, which can mean a smoother process since they already understand practice financials.
What lenders actually look at is fairly consistent across the board: your personal credit history and financial profile, the target practice's collections and profitability trends, and the practice's overhead ratio relative to its specialty and market. A practice with strong, stable collections and a reasonable asking price relative to its earnings will generally finance more easily than one with declining numbers or an aggressive price.
Before you approach a lender, get your own documentation in order: personal financial statements, tax returns, and a clear picture of your credit profile. If you've identified a specific practice, having its financial records on hand speeds up the process considerably.
Down payments for dental acquisitions often range from 0 to 15%, depending on the lender, your financial profile, and the strength of the practice. If you're early in the process and not sure where to start, connecting with a lender who specializes in dental transitions before you start seriously evaluating practices can help you understand what you can realistically afford, and make you a stronger, faster-moving buyer when you do find the right opportunity.
The most common path is an SBA 7(a) loan, which is popular because it allows relatively low down payments and longer repayment terms than a conventional loan, which helps cash flow in the early years of ownership. Conventional bank financing is also available, particularly from banks with dedicated healthcare or dental lending divisions, and some lenders specialize exclusively in dental and healthcare acquisitions, which can mean a smoother process since they already understand practice financials.
What lenders actually look at is fairly consistent across the board: your personal credit history and financial profile, the target practice's collections and profitability trends, and the practice's overhead ratio relative to its specialty and market. A practice with strong, stable collections and a reasonable asking price relative to its earnings will generally finance more easily than one with declining numbers or an aggressive price.
Before you approach a lender, get your own documentation in order: personal financial statements, tax returns, and a clear picture of your credit profile. If you've identified a specific practice, having its financial records on hand speeds up the process considerably.
Down payments for dental acquisitions often range from 0 to 15%, depending on the lender, your financial profile, and the strength of the practice. If you're early in the process and not sure where to start, connecting with a lender who specializes in dental transitions before you start seriously evaluating practices can help you understand what you can realistically afford, and make you a stronger, faster-moving buyer when you do find the right opportunity.