Best Dental Practice Loans
Compare top lenders for common uses, like expanding or starting a practice, or get matched from LendingTree’s network for personalized results.
| Lender | Starting rate | Amount | Term | Time in business | |
|---|---|---|---|---|---|
|
7.00% | Up to $9M | Up to 300 months | None | |
|
10.00% | Up to $5M | Up to 300 months | Not specified | |
|
6.75% | Up to $2.5M | 12 – 60 months | 6 months | |
|
Not specified | Up to $2M | 24 – 60 months | Not specified | |
|
13.00% | $5k – $1.5M | Up to 18 months | 6 months | |
|
4.66% | Up to $250k | 3 – 12 months | 3 months |
Best dental practice lenders: More details
Best for: Practice expansion loans – Live Oak Bank
- No set time in business or annual revenue requirement to accommodate startups
- Large loan amounts available
- Affordable starting interest rate
- Longer funding time (30 to 90 days)
- Prepayment penalty (3-year sliding scale)
- Requires a personal guarantee
When you’re ready to buy, build or expand your dental practice, consider a practice expansion loan with Live Oak Bank. These loans offer the ability to borrow up to $9,000,000.00 with a 300 repayment term and a relatively affordable starting interest rate of just Not specified. What’s more, the company doesn’t impose formal time in business or annual revenue requirements to allow itself to serve startups.
However, Live Oak Bank’s loans come with longer funding times (30 to 90 days) than most other lenders on this list. You’ll also face a prepayment penalty and be obligated to sign a personal guarantee.
In order to qualify, you’ll need to meet Live Oak Bank’s criteria of:
- Minimum credit score: 650
- Minimum time in business: None
- Minimum annual revenue: None
Best for: SBA Loans – Huntington National Bank
- SBA preferred lender
- Offers programs geared toward underserved entrepreneurs
- No balloon payments
- Not transparent about eligibility criteria
- Loans may require a 10% down payment or more
If you’re unable to qualify for a traditional bank loan, consider a loan backed by the Small Business Administration (SBA) through Huntington National Bank. This lender offers SBA 7(a) loans, which are suitable for a variety of business expenses; SBA Express loans, which have faster turnaround times and smaller loan amounts; and SBA 504 loans, which can be used for real estate purchases.
As an SBA preferred lender, Huntington can make funding decisions faster, cutting down on the SBA’s notoriously long timelines. Plus, if you’re an underserved or minority entrepreneur, the bank has a program that’ll cover your SBA fees for you.
Still, this lender doesn’t disclose much of its rate or eligibility information, which can make it hard to tell if you qualify for a loan. Plus, you’ll need to be prepared to make at least a 10% down payment on any SBA funding that you receive.
Learn more about Huntington National Bank.
Huntington National Bank doesn’t disclose the minimum credit score, time in business or annual revenue you’ll need to qualify. Apply online or contact the lender directly to learn if your business qualifies for a loan.
Best for: New practices – Fundible
- No prepayment penalties
- Potential to change loan programs in the middle of your term if you’re in good standing
- Next-day funding available
- Loans may require collateral or a UCC filing against your business
- The company may share your information with third-party lenders
- Website and representatives may provide conflicting information on loan terms
Dentists who are interested in startup funding may want to consider Fundible. The company offers up to $2,500,000.00 in business term loans while requiring only a 500-plus credit score and at least 6 months in business to qualify. You can receive funding as soon as the next business day, and you may be given the opportunity to graduate into a different loan program in the middle of your loan term if you stay in good standing.
Still, be aware that Fundible may require collateral on your loan or a UCC filing against your business. Further, the company may share information you provide with third-party lenders.
Read our full Fundible review.
In order to qualify, you’ll need to meet Fundible’s criteria of:
- Minimum credit score: 500
- Minimum time in business: 6 months
- Minimum annual revenue: $96,000
Best for: Equipment financing – U.S. Bank
- 125% financing available, so you could cover added costs, like shipping or tax
- Quick online application
- Quarterly, semi-annual or annual payment options available
- Charges an origination fee ($375)
- Low maximum loan amount
When you need machinery for your office, think about taking out an equipment financing loan with U.S. Bank. The bank allows you to finance up to 125% of the equipment cost, which means you may be able to use financing to cover things like shipping costs and taxes. What’s more, U.S. Bank also offers a variety of payment options to fit your needs.
However, a $2,000,000.00 maximum loan amount may not be enough for all borrowers to get the equipment they need. This lender also charges an origination fee to speed up its credit decisions.
Read our full U.S. Bank review.
Like many big banks, U.S. Bank doesn’t disclose the minimum credit score, time in business or annual revenue you’ll need to qualify. Apply online or contact the lender directly to learn if your business qualifies for a loan.
Best for: Fast funding – Fora Financial
- Same-day funding available
- Offers prepayment discounts
- Works with low-credit borrowers
- Charges an origination fee (minimum of 3.00%)
- Factor rate can make it harder to compare the cost of borrowing
- Doesn’t help build business credit
If you need quick funding, consider taking out a loan with Fora Financial. The company offers funding up to $1,500,000.00, with access to funds as soon as the same business day. Fora is also an option if you need a bad credit business loan, as they work with borrowers who have credit scores as low as 570.
However, you may pay more for the privilege of borrowing. Fora Financial advertises a factor rate, which can make it more difficult to understand your total loan costs. They also charge an expensive 3.00% (or higher) origination fee on any loans that they provide.
Read our full Fora Financial review.
In order to qualify, you’ll need to meet Fora Financial’s criteria of:
- Minimum credit score: 570
- Minimum time in business: 6 months
- Minimum annual revenue: $240,000
Best for: Flexible funding – Fundbox
- Low annual revenue and time in business requirements
- Relatively fast funding (2 business days)
- Available in all 50 states and U.S. territories
- Short repayment terms
- Only offers one product
- Relatively low maximum borrowing amount
Those borrowers who need flexible funding may want to consider a business line of credit with Fundbox. The company offers up to $250,000.00 in funding that you can draw on an as-needed basis. As an added bonus, its eligibility requirements are relatively lenient compared to those of other lenders.
At the same time, though, Fundbox’s repayment terms are relatively short. Plus, its maximum borrowing amount is also on the lower side.
Read our full Fundbox review.
In order to qualify, you’ll need to meet Fundbox’s criteria of:
- Minimum credit score: 600
- Minimum time in business: 3 months
- Minimum annual revenue: $30,000
Types of loans to open your dental practice
There are multiple types of financing available when you’re ready to open your dental practice — so consider all of your options to determine which would be best for you, based on factors like repayment conditions, dental practice loan rates and eligibility requirements.
Practice acquisition loans
Practice acquisition loans are a type of business acquisition loan that can provide the funds you need to acquire an existing practice. The funds may cover the costs of the acquisition itself, including any legal fees required as part of the transition process. They’re typically term loans, but some lenders may also offer lines of credit.
These loans may be used to:
- Buy-out an entire practice
- Buy-out specific partners
- Allow for associate or partner buy-ins
Acquiring a practice may come with distinct benefits, including:
- An already established team and processes
- An existing client base, which can result in immediate cash flow
- An existing office that already has equipment and supplies
Equipment financing
Equipment financing offers funding to get equipment for your practice. This can include patient chairs, office furniture and essential dental tools and supplies. They typically take the form of term loans, but some lenders also offer lines of credit for this purpose.
Most equipment financing leverages the equipment itself as collateral, which prevents the borrower from needing to provide a down payment or offer additional collateral to secure the loan.
You may also have to lease dental equipment. This allows practices to rent high-cost equipment for a period of time, after which they can return it, renew the lease or purchase the equipment outright under previously agreed-upon terms. This may be more cost efficient upfront, as it can reduce strain on your cash flow initially, but it often costs more in the long run.
Term loans
Term loans provide a single lump sum of funding at the time of approval, which is then repaid in regular payments over a set period of time. They may or may not require collateral, depending on the loan provider and their requirements, and are a popular option for dental office financing.
There are plenty of options for term loans, including short-term loans and long-term loans for businesses. You can apply for these loans through regular banks, credit unions and private lenders. SBA loans may also be a good option: They have capped, competitive interest rates and terms set by the SBA but are offered through participating banks.
Dental practices can be expensive to start from scratch, with Bank of America finding that startup costs typically run upwards of $500,000. As a result, many dentists looking to start their own practices will leverage financing.
5 steps to get a dental practice loan
When you’re ready to start a new practice — or acquire an existing one — you can follow these five steps to help secure a loan and purchase your practice.
1. Decide what kind of practice you want to open.
You can achieve practice ownership through several different means, including:
-
Acquiring an existing practice in full, taking complete ownership
Gain full control over an established practice with built-in clients and income. This can be expensive, and lenders will want to see business plans that indicate the practice will be profitable under your leadership. -
Buying into a practice as an associate or partner
Gain partial stakeholder ownership — but not full ownership — while benefiting from an established practice. This can be a good option for dentists who want to be a partner but don’t need full control or want to avoid the risk that comes with 100% ownership, but it does require finding a practice that’s open to a new partner or associate. -
Starting a new practice from scratch
Create your practice from the ground up exactly as you envision it. But while you’ll have full control from the outset, it can also be challenging and expensive to build and supply an office, attract new patients and hire a team. Lenders will likely heavily consider your personal finances alongside detailed business plans.
2. Prepare your financial documents
Before applying for financing, prepare any documents that may be needed for the application process. This can streamline the review of your loan, speeding up your time to funding if approved.
While the exact requirements may vary based on the type of funding and lender you choose, you can expect to need the following documents:
- A detailed business plan that includes current financial performance, future financial projections and the actions you’ll take to maintain or increase profitability.
- Detailed financial information on the practice you want to acquire, including a profit and loss (P&L) statement and the past two years of business tax returns.
- Purchase price information, including detailed estimates of specific costs like acquisition fees, equipment costs and construction costs (if relevant).
- The last two years of your personal tax returns.
- Bank statements, potentially including personal or business bank statements.
- Personal financial information, including assets, other income and debt like student loan balances.
- Signed letter of intent if you’re already in discussions for acquisition with a potential practice.
3. Talk to lenders and apply for funds
As we’ve discussed, there are plenty of lenders and financing choices available for dentists who want to own a practice. It’s important to review your options carefully to determine which lender is best for you.
Speaking to multiple lenders is an important part of the process, as you can:
-
Assess eligibility requirements
Some lenders may have funding options with more flexible eligibility requirements, like a lower minimum personal credit score or less collateral. -
Get quotes
While many lenders have starting interest rates listed on their websites, getting quotes will give you a clear idea of what different lenders offer currently in terms of interest rates, repayment terms and term length. -
Review your loan options
Loan officers can make financing suggestions based on your immediate needs and long-term goals. While you might get in touch about a term loan, for example, they may recommend a working line of credit because you plan to acquire and then expand an existing practice over time.
4. Choose a lender
After collecting several quotes for loan products, you can choose a lender. While doing so, remember to consider the following:
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Interest rate
Look at your quotes to assess which lender offers the best interest rate that aligns with the loan terms you want. -
Terms
Terms define how long it takes to pay off the loan. You’ll generally pay less interest overall for shorter-term loans, but a longer repayment period will give you lower payments. Calculate both the total cost of borrowing and the monthly cost when comparing terms. -
Speed of funding
Some lenders offer accelerated or even same-day loan approval or financing, which can be ideal if you’re trying to close a deal and secure funding quickly. -
Fees and costs
Review the loan’s conditions, including policies around potential prepayment penalties, late payment fees and origination fees. These fees can influence the total cost of the loan. -
Additional benefits
Some lenders offer perks for borrowers outside of the financing. This may include access to business consultants or account experts. All else being equal, these perks may be worth considering.
Once you’ve selected a lender, apply for the funding of your choice.
5. Purchase your practice
After your loan application is approved by your desired lender, you can review the loan’s terms and ensure that it’s a good fit for what you need. Once you accept the loan, you’ll receive funding.
After you receive the money in your account, you can officially buy the practice. This process will vary depending on whether you’re buying into an existing practice or starting a new one from scratch. Still, it’s a good idea to work with a lawyer to ensure that all contracts are legally binding to protect yourself and your purchase.
Dental support organizations (DSOs) help manage the business side of a practice, including administrative, marketing and nonclinical tasks. Some owners prefer working with DSOs so they can outsource these tasks to experienced partners while they focus on clinical tasks.
DSOs can negatively impact your autonomy as an owner, however, as they typically have standardized protocols that limit your control over certain decisions. You may be required to work certain hours or accept certain insurance plans, for example. This is particularly common if you sell your practice outright to a DSO instead of contracting with them.
At the same time, working with a trusted DSO could positively impact your ability to get funding, as lenders may see established DSOs as an advantage that can contribute to success. Some DSOs also have relationships with private equity investors that may be available to contracted partners. However, any costs associated with the DSO should be factored into financial projections that lenders review.
How to make your application more competitive
To make your financing application more competitive, you should consider the following:
- Improve your credit score. Ensure that your credit score is as high as possible and avoid taking out new substantial personal debt immediately before applying for a business loan. To increase your odds of obtaining an SBA loan, you’ll want to shoot for a minimum credit score in the high 600s.
- Minimize your debt-to-income ratio. Loans for new businesses often look closely at your personal finances, so having a low debt-to-income ratio may increase your chances of approval.
- Have a detailed business plan. Show that you’ve done your due diligence with exact breakdowns of specific potential costs, realistic financial projections and clear steps that you plan to take to launch the new practice and establish profitability.
- Get feedback from a loan officer. You can consult a loan officer with your desired lender to learn more about what they’re looking for in an application. Tailor your application to their requirements, including any documentation they recommend sharing.
How student loans affect your application
Many dental student graduates have high student loan debt, owing an average of $296,500. While a high debt-to-income can impact your ability to get a loan, many lenders expect dentists to carry some student loan debt. This debt doesn’t necessarily prevent you from acquiring funding outright, though it may impact the amount of money you’re approved for or how much collateral a lender requires.
Lenders will typically assess the following:
- If you have a strong credit score with a history of responsible loan repayment.
- If your debt-to-income ratio with student loans can accommodate the additional loan, especially if it’ll take time before your practice reaches profitability.
- If you have some form of collateral if you’re considered high risk for the financing.
Our methodology: How we chose the best dental practice loans
We reviewed more than 20 lenders when putting together our list of the best dental practice loans available. To make the cut, the lenders had to meet the following criteria:
- Loan type: We highlighted lenders who offer loans that are specific to dentists looking to receive financing, or ones that can help dentists procure the items they need, such as equipment financing loans.
- Qualifying requirements: We prioritized lenders that have flexible qualifying criteria, such as a short time in business requirement.
- Rates and terms: We chose lenders with more competitive fixed rates, fewer fees and greater options for repayment terms, loan amounts and APR discounts.
- Repayment experience: For starters, we consider each lender’s reputation and business practices. We also favor lenders that report to all major credit bureaus, offer reliable customer service and provide any unique perks to customers, like free wealth coaching.