SBA Loans for Dental Practices
Practice acquisition, building purchase, or major expansion requires substantial capital. SBA loans offer the lowest rates and longest terms available, potentially saving your dental practice $100,000+ in financing costs over the loan life. The investment in documentation and timeline pays off dramatically.
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SBA Financing for Dental Practices
SBA loans are not government loans. The Small Business Administration guarantees a portion of loans made by approved lenders, reducing risk and enabling better terms for dentists.
SBA Guarantee Advantage
SBA guarantees 75-85% of loans. This backing allows lenders to offer dentists lower rates and longer terms than conventional bank loans.
Practice Acquisition Focus
SBA 7(a) loans are ideal for practice acquisition. Dental practices sell for 60-80% of collections, often $400K-$1.5M. SBA makes ownership accessible.
Real Estate Terms
SBA offers 25-year terms for dental office real estate. Owning your building builds equity and eliminates rent escalation risk.
Dental-Specific Understanding
Experienced SBA lenders understand dental economics: production, collections, hygiene ratios, and practice valuation methodologies.
When SBA Financing Makes Sense
Major dental investments deserve the best available terms. SBA requires effort but delivers substantial savings.
Practice Acquisition Cost
Dental practices sell for 60-80% of annual collections. A practice producing $800K annually costs $500K-$640K. Substantial capital required.
High Alternative Financing Cost
A $500,000 practice at 18% versus SBA at 9% costs $45,000 annually in extra interest. Over 10 years, that is $450,000 in preventable expense.
Short-Term Payment Pressure
5-year terms on $500K require $10,000+ monthly payments. SBA 10-year terms cut payments nearly in half.
Building Purchase
Purchasing your dental building requires long-term financing. Conventional loans max at 15 years. SBA offers 25 years for real estate.
Equipment and Buildout
New location buildout costs $200K-$500K. Chairs, operatories, imaging equipment, and buildout need favorable terms.
Partner Buyout
Buying out a retiring partner requires capital. SBA supports partner buyouts with acquisition loan structure.
Dental SBA Loan Process
Plan for 60-90 days from application to funding. The timeline investment pays off in dramatically better terms.
Pre-Qualification
We review your situation to assess SBA eligibility and identify potential issues early.
1-3 days
Documentation
Assemble tax returns, financial statements, practice valuation, and use of funds breakdown.
2-4 weeks
Underwriting
Lender and SBA review your application. Expect questions about production, collections, and practice history.
4-8 weeks
Closing
Receive commitment letter, complete closing documentation, and fund your loan.
1-2 weeks
Government-Backed Dental Practice Financing
SBA loans provide the lowest cost of capital available to qualified dentists. The investment in documentation and timeline pays off through dramatically better rates, terms, and monthly payments that make practice ownership achievable.
Lowest Interest Rates
SBA rates are capped at Prime + 2.25-2.75% for larger loans. Current rates typically 9-11%, versus 15-22% for alternative financing.
Longest Terms
Up to 10 years for equipment and working capital. Up to 25 years for real estate. Longer terms mean manageable payments.
Large Amounts
SBA 7(a) up to $5 million. Finance practice acquisition, building purchase, major expansion, or combinations.
Practice Acquisition
Buy an existing practice, acquire a competitor, or purchase partnership share with favorable acquisition financing.
Real Estate Purchase
Own your dental building with 25-year terms. Build equity instead of paying rent forever.
No Balloon Payments
Fully amortizing loans with predictable payments. No large lump sum due at maturity.
Dental SBA Loan Applications
Common situations where SBA provides optimal solution for dental practices.
Practice Acquisition
Buy an existing dental practice. Most common use of SBA loans for dentists.
Typical funding: $300K-$2M
Building Purchase
Purchase your dental office building with 25-year terms.
Typical funding: $400K-$2M
Partner Buyout
Buy out retiring partner or purchase partnership share.
Typical funding: $200K-$1M
New Office Buildout
Complete buildout of new dental office location with equipment.
Typical funding: $300K-$800K
Major Equipment Package
Multiple operatories, imaging systems, and technology upgrades.
Typical funding: $150K-$500K
Debt Refinancing
Replace expensive alternative financing with lower-rate SBA loan.
Typical funding: $200K-$1M
SBA vs. Alternative Dental Financing
Understanding the trade-offs between SBA and faster options.
| Feature | SBA 7(a) Loan | Term Loan | Practice Loan |
|---|---|---|---|
| Interest Rate | Prime + 2-3% | 12-18% | 10-16% |
| Maximum Term | 10-25 years | 3-7 years | 5-10 years |
| Maximum Amount | $5 million | $500K typical | $1-2M |
| Down Payment | 10-20% | 0-20% | 10-20% |
| Time to Fund | 60-90 days | 1-4 weeks | 2-6 weeks |
| Documentation | Extensive | Moderate | Moderate |
| Credit Requirements | 680+ | 620+ | 650+ |
| Best For | Major investments | Smaller needs | Mid-range |
SBA Requirements for Dental Practices
SBA eligibility requirements are more stringent but terms justify the effort.
Practice Experience
Established dental practice with production history, or dentist with significant experience.
2+ years in practice or experience
Personal Credit
Good personal credit required from dentist owners.
680+ typically required
Production History
Demonstrated production and collection history for existing practices.
Stable or growing production
Dental License
Current, valid dental license in good standing.
Active license
Owner Equity
Owners must contribute equity, typically 10-20% depending on loan purpose.
10-20% equity injection
Business Plan
Detailed business plan for acquisitions or new locations.
Comprehensive plan
New graduates can sometimes qualify with strong credentials, specialty training, or structured mentorship arrangements.
Real Results
Dr. Sarah M.
General Dentistry, Texas
The Challenge
Dr. Sarah wanted to acquire an established practice producing $950,000 annually with asking price of $665,000 (70% of collections). Alternative financing quoted $12,500 monthly payments over 7 years.
The Solution
SBA 7(a) loan for $600,000 at 9.5% over 10 years with $65,000 equity injection. Monthly payment: $7,800 versus $12,500 with alternative financing.
The Result
Practice acquired with manageable payments. $4,700 monthly savings ($56,400 annually) preserved cash for equipment upgrades. On track to pay off in 10 years.
“The alternative financing would have taken almost all my cash flow. SBA payments leave room to reinvest in the practice and build my team.”
Dental SBA Lending Data
Statistics on SBA financing for dental practices.
SBA Advantages for Dentists
Why the extra effort is worth it for major dental investments.
Massive Interest Savings
On a $500,000 loan, 9% vs 16% saves $35,000 annually. Over 10 years, that is $350,000 in savings.
Practice Ownership Path
Lower payments make practice acquisition achievable for associate dentists.
Building Equity
25-year real estate terms enable building ownership that builds wealth.
Cash Flow Preservation
Lower monthly payments preserve cash for equipment, marketing, and staff.
Acquisition Support
SBA specifically designed to support practice acquisition and transitions.
Refinancing Option
Replace expensive existing financing with lower-rate SBA loan.