How to Finance Your New Dental Practice

When the time comes for you to purchase a dental practice, congratulations!  This is a huge step and one that, hopefully, will provide you with years of success, fulfillment and pleasure providing dental services to your patients. As you prepare to purchase the dental practice, you will need to find a way to finance the purchase.


The first thing you should do is identify a couple banks who you will work with to acquire financing.  It is important to make sure you work with a bank that specializes in dental practices.  These banks know the dental industry and have seen many of these types of transactions in the past.  They will make the process much easier.

The bank will want a financial packet.  This will include a number of items from you such as prior tax returns, curriculum vitae, personal financial statements, etc.  I recommend compiling all of these things in an electronic file that you can easy send off to your bank representative.


The banks will also want to see a business plan and financial projections.  These are very important and your tax advisor can help you prepare these items.

One of the most important items for the bank is the cash flow.  They will want to make sure the dental practice can cover office expenses, service the new loan and cover the doctor’s personal debt.  Tied directly to the cash flow of the practice is the retention of patients.  Banks will want to evaluate the probability that patients will stay with you after the transition.  This can be done by making sure there are no major obstacles to retain the current patient base.


You can review more on what banks are looking for when lending by reading our blog: Factors That Influence Banks’ Decision to Lend To Dentists.

When the time comes to purchase, make sure you give us a call as we can help walk you through each step of the process.

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