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Financing for Dentists

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After spending several years in dental school, you may have aspirations to manage your own practice. Although dentist practice ownership has been decreasing in recent years, 77.5% of all dentists own an independent practice, according to research from the American Dental Association (ADA). The ADA estimates that a dental practice could require an investment of about $500,000 to get started.

Financing for dentists could help you turn a dream of managing your own practice into reality and ensure daily operations run smoothly. If you’re looking for funding to finance startup costs or the everyday expenses of owning a practice, continue reading to learn how financing for dentists could provide a solution for your business.

Common costs for dentists

The average dental school student graduates with $285,184 in debt, according to the American Dental Education Association. However, data from the U.S. Bureau of Labor Statistics shows the median annual salary for dentists is $156,240.

But before you can take home a six-figure salary as a business owner, you may need to spend a significant amount to get your practice off the ground.

The location itself could be the biggest expense, depending on the condition of the space. You could spend as much as $240,000 to build or renovate an office. You may need to make costly repairs like roof replacement or foundation renovations.

Dental equipment is typically the next highest expense for new practice owners. Supplies, computers and software could exceed $190,000.

Additional startup costs like marketing materials, legal guidance or IT support could add up to $70,000 or more to your total costs. And you’ll need to set aside working capital for ongoing expenses, such as payroll for your employees.

Next, we’ll discuss what financing options are available for dentists.

Types of financing for dentists

Many lenders, including banks and alternative online lenders, offer financing for dentists. Here are some products that may be suitable for your dental practice.

Term loans

Long-term and short-term business loans are available to finance big and small purchases. Long-term loans typically have a repayment period between three to 10 years (or longer, in some cases) and come with fixed interest rates and set monthly payments. Rates for long-term loans are typically low, but applicants usually must submit substantial documentation, which slows down time to funding.

Short-term loans require less paperwork and have faster time to funding, making them ideal for immediate working capital needs. However, short-term loans often have higher interest rates and come in smaller amounts and usually must be paid back within three to 18 months, sometimes on a daily or weekly basis.

Lines of credit

A business line of credit allows business owners to borrow as much money as they need on an ongoing basis. Instead of receiving a large lump sum of money, borrowers can make withdrawals from a set amount of funds. Once the borrowed funds are paid back, the full amount becomes available again.

Interest only applies to amount that’s withdrawn, and it isn’t owed until at least some money is borrowed. A business line of credit can be easier to obtain than other types of financing, and both startup and established businesses could qualify. However, borrowers may need to pay a fee to set up a line of credit or an annual fee to keep it open.

Equipment financing

Equipment financing can be used to pay for business assets like dental equipment and machinery. The equipment itself would act as collateral to secure the loan, which could lower the interest rate. However, borrowers may need to make a down payment or have good credit to qualify.

Equipment leases are also available for business owners who do not want to purchase assets to own. A lease likely wouldn’t require a down payment and terms may be more flexible than they would be for a loan. Borrowers would have to return equipment at the end of the lease, though some leases offer an option to buy the assets at the end of the term.

Dental practice loans: 5 options for your business

We’ve compiled a list of lenders, including traditional banks and online business lenders, that cater to dental practices. These lenders offer financing from as little as $5,000 up to $5 million to cover working capital needs, equipment purchases or building construction and renovation.

Live Oak Bank

Live Oak Bank offers loans to build or expand dental practices. General dentists, pediatric dentists, oral and maxillofacial surgeons, orthodontists, endodontists, periodontists and prosthodontists can apply for financing. Borrowers may need to meet Small Business Administration (SBA) eligibility criteria, which includes a minimum credit score of 680 and no recent bankruptcies.

Live Oak’s dental office construction financing is available to dentists who need guidance throughout the construction process in addition to funding. Live Oak would approve the contractor you work with, as well as review your construction budget and timeline. Live Oak provides the same services for dentists seeking dental practice expansion loans to renovate an existing space. For both construction and expansion financing, you could qualify within 48 hours.

Live Oak is an SBA-backed lender, typically issuing loans between $75,000 and $5 million with rates ranging from 5.50% to 7.75% as of August 20, 2019. Live Oak may offer 25-year terms on real estate financing. If your terms are longer than 15 years, you may be able to refinance or pay down your loan early without facing a penalty. Live Oak Bank could ask you for a down payment before providing financing.

Bank of America

Bank of America provides loans up to $5 million to start, expand or acquire a dental practice. You could finance construction costs, purchase equipment or secure working capital. Bank of America requires at least two years in business and $250,000 in annual revenue to qualify for business financing. Your loan type, collateral and documentation would determine how long it takes to receive funds.


OnDeck, an online business lender, provides lines of credit up to $100,000, short-term loans between $5,000 and $250,000 for dental practices. OnDeck works with dental practice owners with one year in business, $100,000 in annual revenue and a personal credit score of at least 600.

OnDeck’s line of credit requires weekly periodic payments and a $20 monthly maintenance fee, which could be waived for six months if you withdraw $5,000 in the first five days of opening your line of credit. Term loans also require daily or weekly repayments for terms ranging from three months to three years.  APR starts at 29.90% for lines of credit and 29.90% for term loans based on loans originated in the half-year ending March 31, 2022, though the actual APR may be higher.


Kabbage, another online business lender, provides working capital for dentists and other medical professionals. Eligible business owners can receive up to $250,000 as a line of credit to expand a dental practice, upgrade equipment or software or cover cash flow gaps. To be eligible for a Kabbage line of credit, you would need at least one year in business and at least $3,000 in monthly revenue.

Kabbage requires borrowers to repay debt on a 6-month, 12-month or 18-month schedule. Rates range from 2-9% for 6-month loans, 4.5-18% for 12-month loan and 6.75-27% for 18-month loans. (Rates accurate as of August 3, 2022.)

Bankers Healthcare Group

Bankers Healthcare Group, also an online lender, lends to dental practice owners and specialty professionals like oral surgeons, endodontists, orthodontists, prosthodontists and pediatric dentists. Funding is available up to $500,000 to assist with working capital, debt consolidation, overhead costs and staffing, equipment and technology costs and startup expenses. Eligible business owners could receive financing in as few as three days.

Interest rates and repayment terms vary for each borrower, but rates generally start at 6.99% and terms could extend to a maximum of 10 years as of August 20, 2019. To apply, you would need to submit your desired loan amount, number of years in business and corporate and personal financial statements.

The bottom line

To operate a dental practice, dentists need up-to-date equipment and technology, staff to manage the office and marketing to grow their patient base. Considering that many dentists rely on insurance reimbursements to generate revenue, dips in cash flow may be inevitable.

Financing from banks and online lenders could provide a bridge between expenses and income. You could use a loan or line of credit as working capital or to make major purchases, like new equipment or office space.

Before signing a loan agreement, though, shop around to find the right lender for your small business. Make sure you’re comfortable with the loan amount, interest rate and repayment terms before accepting financing for your dental practice.


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