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Dental Practice Financing 101 for Dentists

Posted On: February 9, 2023 author Paul Kendall

If one thing can be said about dentistry, it’s that it’s an expensive profession.

It has been shown that the average startup cost for a dental practice is $475,000. That means you’ll have to spend a good chunk of money before you even see your first patient.

But you don’t always have to come up with all of the cash flow yourself. In fact, you don’t even have to start a practice entirely from scratch.

There are a lot of dental school who practice financing options, whether you’re just starting your career or expanding it. Knowing about them can make all the difference to your budget -- and your future.

So without further ado, let’s dive right into dental practice financing 101 for dentists.

What You Need to Know about Dental Practice Financing


Dental practice secure financing is actually less grueling than that for other businesses. That’s because dentists have high median salaries.

That means dentists have a good chance of later making enough money to repay any loans they may take.

Still, using the wrong dental practice financing plan can spell the difference between financial success and mediocrity. Failure’s not common in dental practices, but it’s also still a possibility.

So when planning how to finance your dental practice, review your choices with care.

Let’s get you started with probably the most popular of them: the dental practice loan as well as for commercial real estate . It’s the choice most people take for their dental practice financing.

Financing with a Dental Practice Loan

The dental practice loan is typically obtained from a lending institution like (but not always) a bank.

How does it work?

Essentially, you run up a business proposal for the dental practice you want to establish. You bring it to a lender, they review it and you, and decide whether or not to grant the business loan.

If you get the loan, you use the money to set up your proposed business. That may cover your practice’s property lease, dental equipment, and more.

Take note that the business loan may or may not cover all of the costs. Some dentists combine it with working capital from other sources to cover their expenses, for example.

What’s important is that the loan needs to be paid back eventually. Repayment periods and terms of interest vary a lot, so you may need to shop around before choosing a dental equipment financing lender.

Some people even get expert advisers to guide their dental practice financing at this stage. These can make it easier to find the right source of business loan funding for your plans.


Dental Practice Financing 101 for Dentists - dental practice


Purchasing an Existing Dental Practice

For their first foray, dentists usually purchase a dental practice from another dentist. Because it puts a proven and working practice in your hands, this is an excellent way to jump start your dentistry career.

Dentists also purchase a dental practice as a way to grow an existing business. Think of this as buying a new branch instead of setting one up from scratch.

Dentistry practices for sale aren’t uncommon. They usually appear when the seller is retiring or moving to another area.

Buying an old practice doesn’t mean zero startup costs beyond the acquisition, though. Sometimes, you might need to update equipment. You might even need to make changes to the office space just to accommodate your clientele.

Remodeling Your Dental Office

Whether you bought someone’s practice or started from scratch, you may need an office remodel. Consider that when planning your dental practice financing.

Here are some common remodeling jobs dentists get for their offices:

  • Wiring upgrades,

  • Plumbing updates and repairs,

  • Ventilation improvement,

  • Redecoration, and

  • Parking space construction,

  • Cabinetry tenant improvements.

Some of these upgrades may be planned and spaced out in order to give yourself more time to save capital or obtain long-term financing.

Expanding/Relocating Your Dental Office

Of course, your office should grow when your practice grows. That’s another reason dentists buy an existing practice: to expand, whether by completely relocating or opening another location.

Remodeling costs will usually be involved here again. You will also need to fund the operations of the new facility. This includes hiring staff.

Business financing is usually required to jump start the new office before it can start earning enough to sustain itself.

Getting the Traditional Bank Loan Option

Let’s say you’ve found a good practice to take over and listed all the costs involved. Now it’s time to get your dental practice financing loan. But from where?

A lot of people choose to go to the banks. As mentioned earlier, dentists’ prospective salaries help them when they seek loans.

Banks in particular appreciate the stability of the dental profession’s income. It tells them dentists can make enough to cover their operating expenses as well as pay the bank back.

Different banks will offer different loans and terms. Comparison-shop to get the best ones.

In general, interest rates start at 7% and repayment terms run up to 10 years. Most applications will also take anywhere from 2 to 6 weeks for funding.

Traditional banks may also offer other options for dental practice financing that will better suit your situation. With good credit credit card debt, you may pick up your phone and call your bank's financing specialist to learn more about your options.

Take note that you must provide a detailed business plan and a substantial amount of equity and/or collateral.

Getting the SBA Loan Option

This is another option for dental practice financing. Small Business Administration loans are among the best in the business loan market. This is because of the guarantee the SBA offers.

The SBA can guarantee up to 85% of loans $150,000 or less and up to 75% of loans over $150,000. So, even if a borrower defaults on an SBA loan, the lender is guaranteed some measure of repayment.

This means lenders can be more forgiving about their terms. Banks participating in the SBA program often provide larger loans for lower interest rates to small business loans for the owners.

Borrowers can get longer monthly repayment terms too!

An SBA 7(a) loan can be a strong fit for dental practice financing as a result. When considering an SBA 7(a) loan, you should note the following:

  • Business loan amounts usually run from $5,000 to $5 million.

  • Repayment terms are often anywhere from 5 to 25 years.

  • Interest rates often start at 5.75%.


Dental Practice Financing 101 for Dentists - equipment


Choosing a Dental Practice Financing Company

With your dental practice financing options made clear, you should now find the right dental practice financing company to make things easier for you.

Financing companies can be a big help for dentists looking to obtain business loans and get credit approval. They can facilitate the application process and guide you through the more technical tasks.

For example, companies such as Trust Capital can help you get loan approval in a shorter amount of time. A good dental practice financing company can also improve your chances of getting into the SBA loans program.

What to Look for in a Dental Practice Financing Company

When seeking a business financing company, look for one with good reviews and credibility and better lines of credit. Do other people vouch for them? Do they have a credible presence online or in business financing?

Look too for business loan companies that specialize in helping dental businesses. For dental practice financing, that means small-to-midsize businesses that know the dental industry.

That also means looking for companies that have done dental practice financing before.

Finally, look for companies that are big on transparency and communication. You want people who will stay in contact because you want to be informed of what happens at every stage of your application when you have a good credit score. .


 Don't take equipment financing debt on before or instead of a Dental Practice Loan


If you get a business loan from an equipment lender with poor dental equipment loan rates it can ruin your financials.

For example. We had a client go to a private equipment lender and get a high interest rate equipment loan before he came to us where we could've financed the whole project at a lower rate and a longer term with no pre payment penalty. The dentist didn't realize we could've financed everything for him in one larger better loan. 

In this scenario. The customers financials looked worst because he took on more debt. Luckily we were still able to help practice finance his project but the new debt almost killed the deal. 

The Sample Benefits of Using a Company Like Trust Capital 

Let’s say you’ve settled on a business financing company like Trust Capital. What can you expect now?

Among other things, you should expect the following:

  • You can get a chance at competitive, fixed-rate loans with terms up to 10 years.

  • You can have a wide range of repayment options.

  • You can get personalized assistance with essential banking services.

  • You can get complimentary planning tools to help you navigate the acquisition or start-up process of your dental practice.

  • You can also access a milestone program for new owners.

As you can see, you can get a ton of useful guidance for your first steps in business. That’s why you want to choose the right company to assist your dental practice financing.

Final Thoughts On Dental Practice Financing for Dentists


As already mentioned, starting a dental practice isn’t cheap. But this blog post should have helped you learn more about dental practice financing options that can help.

Just remember that there are a lot of ways to get dental practice loan. There are also lots of expenses to starting up, so work them all out even before you seek lenders.

Financing companies like Trust Capital can assist you in the loan approval process for your dental practice financing. They can provide solutions for your dental practice, even if it’s a start-up dental practice!

If you need further help with dental practice financing, you can contact Trust Capital at (866) 458-4777.

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