Dental Practice Acquisition Loans
Buying a dental practice is one of the few acquisitions a lender will finance almost in full. Because dentists default at rates near the bottom of all commercial lending, specialty healthcare banks routinely fund up to 100% of a practice’s price, and SBA 7(a) covers the same purchase up to $5 million over ten years with roughly 10% down. The number that decides the deal is not your savings. It is whether the practice’s collections, after you pay yourself a market salary, cover the new loan payment about 1.2 to 1.5 times.
Bottom line
Dentists finance practice purchases on terms almost no other buyer gets. Because dentist default rates sit near the bottom of commercial lending, specialty healthcare banks routinely finance up to 100% of a practice’s price with little or nothing down, while SBA 7(a) covers the same purchase up to $5 million over ten years with about 10% equity. Approval turns on the practice’s cash flow, not your savings: if collections cover the new payment about 1.25 times after you pay yourself a market salary, it funds. Pick a specialty bank for speed and a low down payment; pick SBA 7(a) for the longest term and a thinner file.
Why dentists get financing terms almost no one else does
A dental practice acquisition is mostly a purchase of goodwill, the intangible value of an existing patient base and its cash flow. Most lenders discount goodwill hard, because it disappears if the business stumbles. Healthcare lenders do the opposite for dentists. Their own loss data shows dental practices repay at rates near the top of any category, so they finance the goodwill that scares everyone else.
Look at the numbers and the gap is obvious. In a typical dental deal, 70% to 85% of the price is goodwill rather than chairs, cabinetry, and imaging equipment. A conventional bank outside healthcare caps goodwill financing around 30% to 50% of the price and discounts what is left, which is exactly why generic acquisition loans stall on service-business deals. The business acquisition loan versus SBA 7(a) comparison walks that goodwill math in detail. Dental lenders and SBA 7(a) are built to finance it, which is the structural reason practice deals close where an ordinary loan cannot.
The counter-intuitive rule of dental lending
Low default risk → up to 100% financing
The reason a lender will hand a dentist the full purchase price is not generosity. It is math. A licensed dentist buying a profitable practice is one of the safest bets in small-business lending, so the lender prices and structures the deal to win it. That is why the first question in a dental acquisition is rarely “how much can I put down.” It is “does the practice’s cash flow support the payment.”
We are a marketplace, not a lender or a practice broker. The bank term loans, SBA financing, and equipment financing on our healthcare funding page are the tools that get a dentist from a signed letter of intent to a funded acquisition. The bond you still buy from a surety and the lease you still sign with a landlord are separate. The money is what we help you line up.
The lender is underwriting the practice, not your net worth
Here is the part that trips up first-time buyers. A dental acquisition lender is not sizing the loan off your personal assets. It is sizing it off the practice’s ability to pay the loan back after you own it. The tool for that is the debt-service coverage ratio, and it is worth understanding before you make an offer, because it sets your real budget.
The calculation is simple. Take the practice’s annual earnings, subtract a fair salary for you as the working dentist, and see whether what remains covers the new loan payment with room to spare. Lenders want that coverage around 1.2 to 1.5 times, and in 2026, with Prime near 7.50%, they are stricter about it than they were a few years ago. The SBA qualification guide covers how that same coverage test drives every SBA file, dental or not.
Post-sale cash flow and debt-service coverage
This is the number that decides the deal. A lender takes the practice's earnings, subtracts a market salary for you as the working dentist, and checks that what remains covers the new loan payment about 1.2 to 1.5 times. That ratio, the debt-service coverage ratio, is what a lender solves for before anything else. If the coverage is there, the file funds. If it is not, no amount of personal net worth rescues it.
Collections history, production, and payer mix
A lender reads three to five years of production and collections reports the way a bank reads tax returns. Steady or growing collections underwrite well. A practice heavy on one expiring insurance contract, or one where the selling dentist personally produced most of the dentistry, gets discounted, because that revenue may walk out the door with the seller. Fee-for-service and a broad patient base underwrite stronger than a single-payer, single-provider book.
How much of the price is goodwill
In most dental acquisitions, 70% to 85% of the price is goodwill, the intangible value of the patient base and cash flow, not the chairs and the CBCT machine. Conventional banks outside healthcare cap goodwill financing at 30% to 50% and discount it hard. Dental lenders and SBA 7(a) do not, which is the structural reason practice deals close where a generic acquisition loan cannot.
Your license, credit, and production record
You are a licensed professional with high, durable earning power, and underwriting treats you that way. A specialty lender wants a clean license, a personal credit score generally in the high 600s or better, and evidence you can produce the dentistry the practice sells. An associate with two years of solid production and no clinical baggage is the textbook approvable buyer, even with student debt on the personal statement.
The seller's transition and retention plan
Patient attrition after a sale is the risk a lender fears most, so the transition plan is part of underwriting. Lenders want the selling dentist to stay 30 to 90 days, sometimes longer, to hand off patients, introduce you to referral sources, and keep the schedule full through the change. A seller sprinting for the exit on closing day is a warning sign that shows up in the terms.
Your three financing paths
Almost every dental acquisition is funded with one of three structures, or a blend of them. Each fits a different buyer and a different practice. The trick is matching the structure to your file rather than reaching for whichever one a single lender happens to offer.
Specialty healthcare bank loan
Amount
Up to 100% of the price
Rate
Fixed, often at or below SBA pricing for strong buyers
Term
7 to 15 years
Best for: A dentist with clean credit buying a healthy, profitable practice. Banks with a dedicated dental or healthcare division underwrite these deals every week, fund the acquisition and often some working capital with little or nothing down, and close faster than the SBA. They can afford the aggression because their loss data on dentists is exceptional.
Watch out: The pricing and the 100% offer are reserved for the strongest files. A thin production history, a recent credit stumble, or a practice with declining collections pushes you toward SBA or a larger down payment. The rate is usually fixed, so confirm whether there is a prepayment penalty before you sign.
SBA 7(a) acquisition loan
Amount
Up to $5 million
Rate
Prime + 2.25% to 4.75% (roughly 9.75% to 12.25%)
Term
10 years (up to 25 with the real estate)
Best for: First-time buyers, associates going out on their own, and any file the conventional market prices too high. SBA 7(a) is built to finance goodwill, stretches repayment over ten years to keep the monthly payment low, and will fund the purchase even when the buyer brings limited outside collateral. As of 2026 the 7(a) maximum is $5 million.
Watch out: A change-of-ownership loan requires a minimum equity injection of about 10% of the total project cost, though a seller note left on standby can cover part of it. Add an SBA guaranty fee, a business valuation once goodwill runs high, and a 45-to-90-day close. You trade speed and the last dollar of financing for the lowest qualification bar and the longest term.
Seller financing (a carried note)
Amount
Typically 10% to 30% of the price
Rate
Negotiated, often below bank pricing
Term
Negotiated, frequently 5 to 10 years
Best for: Bridging the gap the senior lender will not cover, and signaling that the seller believes the practice will hold up after they leave. On an SBA deal, a seller note kept on full standby can count toward your required equity injection, which is the single most common way buyers get to closing with less cash out of pocket.
Watch out: A seller note is rarely the whole deal. It sits behind the bank or the SBA, its terms live or die on the seller's motivation, and a long seller-employment arrangement can collide with SBA rules on how long a seller may stay involved. The partner-buyout guide below covers where that line falls.
The specialty-bank-versus-SBA decision is the one most buyers agonize over, and it usually comes down to your file strength and how fast you need to close. The SBA loan versus conventional bank loan breakdown covers that tradeoff, and the partner buyout guide gets into the SBA seller-employment rule that quietly reshapes deals where the selling dentist wants to keep working.
What financing a $900,000 practice actually looks like
Take a general practice priced at $900,000, collecting $1.1 million a year. After a market salary for the buying dentist, the practice throws off about $180,000 that can service debt. A lender lends up to the payment that number covers comfortably. Here is how the same purchase pencils out three ways. These are illustrative figures on generic numbers. Run yours.
Path A — SBA 7(a), roughly 10% down
- Finance about $855,000 after a 10% equity injection, over 10 years at roughly 10.5%. The payment lands near $11,500 a month, about $138,000 a year.
- Against $180,000 of cash flow, coverage runs about 1.30 times, which clears the bar. Part of the injection can be a seller note on standby, so the cash out of pocket is often well under the full 10%.
You accept a guaranty fee and a 45-to-90-day close in exchange for the longest term and the lowest qualification bar. For a first-time buyer, that is usually the right trade.
Path B — Specialty bank, 100% financed
- Finance the full $900,000 plus $50,000 of working capital, over 10 years at about 9.5% fixed. The payment runs near $12,300 a month, roughly $147,500 a year.
- Coverage is tighter at about 1.22 times because you financed more, but you wrote no down-payment check and closed faster with no SBA fee. For a strong file, the speed and the zero-down are worth the slimmer cushion.
Same practice, no money down, a faster close, and a payment the cash flow still covers. This is the offer dentistry’s low default rates make possible.
The lesson — solve for coverage, not for price
Notice what actually moved between the two paths. It was not whether you qualified. Both funded. It was the down payment, the speed, and how much cushion sat above the payment. If the practice’s cash flow could only cover about $140,000 of annual debt service instead of $147,500, Path B would get resized down or ask for a small injection, and Path A’s lower balance would suddenly be the safer fit. The lender is always solving for the same thing: a payment the practice can carry after you take a fair salary. Anchor your offer to that, and the financing follows.
Pick: Strong credit, healthy practice, and you want to close fast with nothing down? Get quotes from a specialty healthcare bank first. First-time buyer, thinner file, or you want the lowest possible payment? Lead with an SBA 7(a) term loan. In most acquisitions worth doing, it pays to price both.
The real risk is not the loan. It is patient attrition.
Here is what most “how to finance a practice” articles skip.
The financing is the easy part. The part that decides whether the deal works is what happens to the patients after the old dentist’s name comes off the door. A practice that loses 20% of its patients in the first year can turn a comfortable 1.30 coverage ratio into a payment you are scrambling to make, and no loan structure protects you from that. Lenders know it, which is why they price the transition into the deal.
Three things protect against it, and they are worth more attention than shaving a quarter point off the rate. Insist on a real transition: the selling dentist stays 30 to 90 days, introduces you to patients and referral sources, and sends a letter over their own signature. Read the collections trend, not just the peak year, because a practice already sliding before the sale keeps sliding after it. And do not overpay for goodwill on a book that produced its numbers because of the specific person leaving. A fair price on a stable practice beats a bargain on a fragile one every time.
If the acquisition also comes with the building, that is a separate, usually cheaper conversation, because owner-occupied real estate can stretch to a 25-year term and is secured by the property itself. Keep it distinct from the practice loan so neither one drags the other’s terms down.
Price your practice acquisition against real lenders
A 2-minute application puts your file in front of lenders who specialize in healthcare and dental acquisitions, plus SBA Preferred Lenders. Soft credit pull, no obligation to accept anything that comes back, and you see the down-payment and term options side by side.
Frequently asked questions
How much can I borrow to buy a dental practice?
Financing usually tracks the practice's price and, more importantly, its cash flow. Specialty healthcare lenders and SBA 7(a) both routinely finance six- and seven-figure acquisitions, with the SBA 7(a) program going up to $5 million as of 2026. The real ceiling is debt-service coverage: a lender lends up to the amount whose payment the practice's post-sale cash flow can cover roughly 1.2 to 1.5 times after you pay yourself a market salary.
How much money down do I need to buy a dental practice?
Less than almost any other business acquisition. Many specialty healthcare banks finance up to 100% of the price for a qualified dentist buying a healthy practice, meaning little or nothing down. An SBA 7(a) change-of-ownership loan requires a minimum equity injection of about 10% of the project cost, but a seller note kept on standby can cover part of that, so the cash you actually write a check for is often smaller than the headline figure.
Can I really get 100% financing for a dental practice?
Yes, and it is more common in dentistry than in nearly any other field. Lenders offer it because decades of loss data show dental practices repay at rates near the top of any commercial category, so the risk of full financing is low. The offer is not automatic. It goes to buyers with clean credit and a solid production record who are purchasing a profitable, stable practice. Weaker files see a down-payment requirement return.
Should I use SBA 7(a) or a conventional bank for the purchase?
Use a specialty healthcare bank when your file is strong and you value speed and a low down payment; these lenders often match or beat SBA pricing and close faster. Use SBA 7(a) when you are a first-time buyer, want the longest amortization to keep the payment low, or have a thinner file the conventional market prices too aggressively. Many dentists get quotes on both and let the terms decide.
What do lenders look at when financing a dental acquisition?
The practice's cash flow first, your credit and production record second. A lender wants three to five years of collections and production reports, a market-salary-adjusted cash flow that covers the new payment about 1.25 times, a clean license, a personal credit score generally in the high 600s or better, and a seller transition plan that protects the patient base. Personal net worth matters far less here than the practice's own numbers.
Does Quick Loans Direct provide dental practice acquisition loans?
Quick Loans Direct is a lending marketplace, not a direct lender. One application matches your file against a network of 300-plus lenders, including banks that specialize in healthcare and dental acquisitions and SBA Preferred Lenders. You see the offers you qualify for and choose. Applying takes about two minutes and uses a soft credit pull, so it does not affect your score.
New to how acquisition financing fits the wider menu? The breakdown of how small business loans actually work covers the products behind every deal, and the partner buyout guide works the same acquisition math when you are buying out a co-owner instead of a retiring seller.
Quick Loans Direct is a lending marketplace, not a direct lender and not a dental practice broker. We connect dentists with lenders for practice-acquisition financing, equipment financing, and working capital. Actual rates, terms, down-payment requirements, and approval decisions are made by our lending partners based on their individual underwriting criteria and vary by borrower, practice profile, and product. Rates and disclosures may vary by state. California, New York, Virginia, Utah, Georgia, Connecticut, Florida, Kansas, and several other states require specific commercial financing disclosures that your chosen lender will provide.
Every dollar figure, rate, and ratio on this page is illustrative arithmetic on generic numbers, shown so you can re-run it with your own. As of 2026 the SBA 7(a) maximum loan amount is $5 million and Prime sits near 7.50%; SBA rates, guaranty fees, and the SOP change-of-ownership rules are set by the SBA and change periodically, so confirm the current figures before you rely on them. Up-to-100% financing is available to qualified buyers and is not guaranteed. Confirm how any structure affects your specific deal with your CPA and lender.
This content is for informational purposes only and does not constitute financial, tax, or legal advice. Consult a qualified professional before making a practice acquisition or business financing decision. Last reviewed by the Quick Loans Direct editorial team on July 2026.