The strongest way to finance buying a dental practice is a long-term acquisition loan — typically an SBA 7(a) loan or a bank/dental-specialty term loan — layered with seller financing and, where cash-flow timing gets tight, revenue-based working capital for the post-close months. Most practice buyers do not pay cash; they combine a large amortizing loan that carries the goodwill and equipment purchase price against the practice's proven collections, a small seller-held note that keeps the previous dentist invested in a smooth transition, and a flexible capital source that covers payroll, supplies, and lab bills before the transition dip in production recovers. The right mix depends on whether you are buying an established solo practice, a partnership buy-in, or a distressed office you plan to turn around.
Key takeaways
- Dental practice acquisitions are usually financed 80-100% — lenders view established practices as low-default because collections and patient recall are predictable.
- SBA 7(a) is the workhorse for practice purchases: up to $5 million, roughly 10-year terms on goodwill/blue-sky, and down payments as low as 10%.
- Dental-specialty lenders (the divisions banks build just for dentists) often approve 100% financing plus working capital because they underwrite to industry benchmarks, not generic small-business risk.
- Seller financing of 5-15% of the price is common and signals the seller's confidence — it also fills the gap when an appraisal comes in light.
- The real cash-flow risk is not the purchase — it's the transition dip: production and collections can soften for 60-120 days as patients adjust to a new owner.
- Revenue-based financing approves on bank deposits and collections rather than credit score (FICO 500+), funds $10,000+ in about 24-48 hours, and repays as a share of daily or weekly cash flow.
- No legitimate lender guarantees approval; a clean letter of intent, the seller's production reports, and 2-3 years of practice tax returns move any file fastest.
The five financing options, ranked by how buyers actually use them
No single product buys a dental practice cleanly. The typical deal stacks two or three of these, with the acquisition loan doing the heavy lifting and the others filling gaps in appraisal, timing, and post-close liquidity.
- SBA 7(a) acquisition loan. The default for most first-time buyers. It stretches goodwill and equipment over a long term against the practice's collections, keeps the down payment small, and lets you roll working capital and some closing costs into one facility. Slower to close, heavy on documentation, but the lowest monthly cash-flow burden.
- Bank or dental-specialty term loan. Banks with dedicated dental divisions underwrite to practice benchmarks — collections per operatory, hygiene percentage, overhead ratios — and frequently offer 100% financing to a qualified dentist. Faster and cleaner than SBA for a strong borrower buying a healthy office.
- Seller financing (seller note). The exiting dentist carries a slice of the price, usually 5-15%, on a subordinated note. It closes appraisal gaps, keeps the seller motivated through the handoff, and reassures the senior lender.
- Equipment and leasehold financing. If the deal includes a big CBCT, CEREC, chairs, or a build-out, a separate equipment lease or loan keeps that debt off the acquisition line and matched to the asset's useful life.
- Revenue-based working capital / MCA marketplace. Not for buying the practice itself, but for the months around close — covering payroll, lab, and supplies when the transition dip hits or when a bank facility funds slower than your closing date. Approval rests on the practice's bank deposits and revenue, not your personal credit, and it funds in about 24-48 hours.
SBA 7(a): the workhorse for first-time practice buyers
The SBA 7(a) program is designed almost perfectly for a dental acquisition. Because a large share of a practice's price is goodwill — the patient base, recall system, and cash flow rather than hard assets — conventional lenders can be cautious about lending against something intangible. The SBA guaranty removes that hesitation, which is why 7(a) can fund up to $5 million with a down payment often as low as 10% and terms that stretch goodwill out long enough to keep monthly payments comfortable against collections.
The trade-off is process. Expect to provide 2-3 years of the seller's practice tax returns and production reports, a business plan, a personal financial statement, a signed letter of intent or purchase agreement, and often a third-party practice valuation. Timelines commonly run 45-75 days. For a buyer with reasonable credit and dental income history, though, the low down payment and long amortization make 7(a) the most cash-flow-friendly way to carry a full-price acquisition. If your deal also involves buying the building the practice sits in, an SBA 504 loan can finance the real estate separately over an even longer term.
Dental-specialty and bank lenders: speed for a strong borrower
Several national banks run divisions that lend only to dentists, veterinarians, and physicians. Their edge is expertise: they know that a healthy general practice runs overhead in a predictable band, that hygiene should carry a meaningful share of production, and that patient attrition after a well-managed sale is usually modest. Because they underwrite to those benchmarks instead of treating you like a generic small business, they often extend 100% acquisition financing plus a working-capital cushion, and they close faster than SBA — sometimes in a few weeks.
This route rewards a clean profile: a dentist with two or more years of solid production, manageable student and personal debt, and a target practice with steady collections and a stable team. The rates and terms are competitive, and the relationship can carry forward into future equipment, expansion, or a second-location purchase. If the practice has red flags — declining collections, heavy insurance write-offs, or a departing associate who takes patients — a specialty lender will price that in or ask for more seller participation.
Seller financing and the transition: why the exiting dentist matters
A seller note is one of the most useful tools in a practice deal, and buyers underuse it. When the selling dentist carries 5-15% of the price on a subordinated note, three good things happen: the senior lender sees the seller has skin in the game, any gap between the sale price and a conservative appraisal gets bridged, and the seller has a financial reason to introduce patients, mentor you through the systems, and stay reachable during the handoff.
The transition is where deals succeed or stumble. Patients formed loyalty to the previous dentist; some test the new owner before they commit. Production and collections can soften for 60-120 days even in a well-run sale. A structured transition — the seller staying on part-time for a few months, warm patient letters, and continuity in the front-desk team — protects the cash flow your loan payments depend on. Build that plan into your letter of intent, not as an afterthought.
Revenue-based working capital: covering the transition dip
Acquisition loans buy the practice; they rarely solve the timing problem in the first months after close. Payroll runs every two weeks, labs and supply houses want paying, and your SBA or bank facility may fund on a schedule that does not line up with your closing date or the transition dip in collections. That is where a revenue-based financing marketplace fits.
This capital is approved on the practice's actual bank deposits and revenue rather than your personal credit — FICO 500+ is workable — with minimums around $10,000 and funding typically in 24-48 hours. Repayment is a share of daily or weekly collections, so it flexes with production instead of demanding a fixed payment on a fixed day. That structure is well suited to a practice absorbing a transition or a short receivables gap. It is short-term, cash-flow-priced capital, so it works best as a bridge or a supplement to the acquisition loan — not as the way you buy the practice. Match the tool to the job: long-term loan for the purchase, revenue-based capital for the timing. For the full picture of how this product prices and repays, see our guide to revenue-based financing and our business acquisition loan pillar.
Realistic example: financing a $900,000 general practice
The figures below are illustrative — for example only, to show how the pieces stack, not a quote or a promise of terms.
| Layer | Role in the deal | Example share | Typical timing |
|---|---|---|---|
| SBA 7(a) acquisition loan | Carries goodwill + equipment purchase price | ~85% of price | 45-75 days to close |
| Buyer down payment | Cash equity / SBA injection | ~10% of price | At close |
| Seller note (subordinated) | Bridges appraisal gap, aligns seller through transition | ~5% of price | At close, deferred payments |
| Revenue-based working capital | Payroll, lab, supplies through the transition dip | Sized to ~1 month of collections | 24-48 hours, post-close as needed |
The point of the stack: the long-term loan keeps the monthly burden low against collections, the seller note fills the gap and buys goodwill continuity, and the revenue-based layer is there only if the first few months run tight. Many buyers never draw the working-capital line — but having it approved and ready is what keeps a soft transition month from becoming a missed payroll.
Decision framework: which financing fits your deal
An SBA 7(a) acquisition loan works best when you are a first-time buyer, want the lowest down payment and monthly cash-flow burden, are buying a full-price established practice, and can tolerate a 45-75 day close with heavy documentation. Avoid leaning on it when you need to close in days, or the seller wants an all-cash quick exit.
A dental-specialty or bank term loan works best when you have strong credit and dental income history, the target practice has clean collections and a stable team, and you want speed plus a lender who understands the industry. Avoid it when the practice has declining production or heavy write-offs a benchmark lender will penalize.
Seller financing works best when the appraisal comes in light, the price includes significant goodwill, or you want the seller invested in a smooth handoff. Avoid over-relying on it when the seller wants a clean full-cash exit or the note terms would strain early cash flow.
Revenue-based working capital works best when you need to bridge the transition dip, cover payroll or lab before your acquisition loan funds, or your credit is thin but the practice's deposits are strong, and you need money in 24-48 hours. Avoid it as your primary purchase financing — it is short-term, cash-flow-priced capital meant to supplement the long-term loan, not replace it. And no matter the source, treat any lender who guarantees approval before seeing your file as a warning sign.
How to get the fastest, cleanest approval
Every one of these lenders moves faster on a prepared file. Assemble, before you apply: a signed letter of intent or purchase agreement; 2-3 years of the seller's practice tax returns and production/collections reports; a current profit-and-loss and payer mix; your personal financial statement and 2-3 years of personal returns; and a short transition plan showing how patients and staff carry over. For revenue-based working capital, the core requirement is simpler — the practice's recent business bank statements, since approval rests on deposits and revenue rather than credit score.
Sequence matters. Get the acquisition loan and seller note structured first so the purchase is funded on long-term, low-burden money. Line up revenue-based working capital as a standby for the transition months. That order keeps your cash flow protected on both ends: a manageable monthly payment on the loan, and fast, flexible capital ready if the first months run soft.
Frequently asked questions
What is the best loan to buy a dental practice?
For most first-time buyers, an SBA 7(a) acquisition loan is the best primary option — it funds up to $5 million against the practice's collections, with a down payment often as low as 10% and terms long enough to keep monthly payments comfortable. Strong borrowers buying a healthy office may prefer a dental-specialty bank loan, which underwrites to industry benchmarks and can close faster, sometimes with 100% financing. Most deals also add a small seller note.
How much of a down payment do I need to buy a dental practice?
With SBA 7(a) financing, down payments are commonly around 10% of the purchase price. Dental-specialty lenders frequently offer 100% acquisition financing to a well-qualified dentist, meaning little or no down payment, especially when a small seller note is in place. Your credit, dental income history, and the health of the target practice determine where you land.
Can I finance 100% of a dental practice purchase?
Yes, it is common. Banks with dedicated dental divisions often extend 100% acquisition financing to a qualified dentist buying a healthy practice, sometimes plus a working-capital cushion, because they underwrite to practice benchmarks rather than generic risk. A seller note covering 5-15% of the price can also close the gap that gets a deal to full financing.
How long does it take to get financing to buy a dental practice?
An SBA 7(a) loan typically takes 45-75 days to close given the documentation and valuation involved. A dental-specialty or bank term loan for a strong borrower can move faster, sometimes a few weeks. Revenue-based working capital used to bridge the transition funds much faster — usually in about 24-48 hours — because it is approved on the practice's bank deposits.
What credit score do I need to buy a dental practice?
For SBA and bank acquisition loans, lenders generally want reasonable-to-strong personal credit plus dental income history. If your credit is thinner, revenue-based working capital is more forgiving — it approves on the practice's deposits and revenue with FICO 500+ — but it is meant to supplement, not replace, the long-term acquisition loan. No legitimate lender guarantees approval regardless of score.
Should I use seller financing when buying a dental practice?
Usually yes, in part. A seller note of 5-15% of the price bridges any appraisal gap, reassures the senior lender that the seller has skin in the game, and gives the exiting dentist a reason to support a smooth patient and staff transition. It is one of the most useful and underused tools in a practice deal, though the seller must be willing to carry it.
How do I cover payroll and expenses after buying a practice?
Plan for the transition dip — production and collections can soften for 60-120 days as patients adjust to a new owner. Revenue-based working capital is well suited here: it funds $10,000+ in about 24-48 hours, is approved on the practice's deposits, and repays as a share of daily or weekly collections, so it flexes with cash flow. Many buyers keep it approved as a standby and never fully draw it.
Can I get a loan to buy a distressed or declining dental practice?
It is harder but possible. SBA and specialty lenders will price in declining collections, heavy insurance write-offs, or patient attrition, and may require a larger seller note or down payment. A turnaround buyer often relies more on seller financing plus revenue-based working capital to stabilize cash flow while rebuilding production, then refinances into cheaper long-term debt once collections recover.
