At some point, every dental practice hits a point where growth isn’t just a nice-to-have—it’s a necessity. But let’s face it. Not every practice owner has the resources sitting around to make that happen.
If you’re someone with big plans and the drive to see them through, lack of funding shouldn’t stand in your way.
Dental practice financing offers a smart path to secure the capital you need, making it possible to expand your practice, upgrade your equipment, or hire additional staff. And while taking on debt might sound daunting, it can be a game-changer if you approach it with a solid plan and clear goals.
If 2025 is the year you’re ready to take your practice to the next level, here are some financing options that can help turn your vision into reality.
Dental Financing Option #1: Bank Loans
A bank loan is one of the most practical ways for dental practices to access financing because banks often view dental practices as low-risk borrowers. They understand the stability and profitability potential of the dental industry, which works in your favor
In terms of interest rates, bank loans typically offer competitive rates and favorable terms. Meaning, that they’re a good choice for large investments, like buying out another practice, moving to a high-traffic location, or undertaking renovations.
However, getting approval can be challenging. Banks usually require you to meet specific criteria, including:
- A strong credit history
- A well-prepared business plan
- Adequate collateral
If you’re just starting out, it’s worth noting that banks will often rely on your personal credit score to assess risk. This means your personal credit score and existing debt will play a big role in their decision.
Also, keep in mind that the application process for a bank loan can be lengthy and involve significant paperwork. Be prepared to provide detailed financial records, projections, and explanations for how you’ll use the funds. We strongly recommend engaging an experienced dental CPA to help with this process.
Dental Financing Option #2: Business Lines of Credit
The next option is a business line of credit.
A business line of credit works a lot like a safety net for your dental practice—it’s there when you need it, whether it’s for managing cash flow during slower months, covering unexpected repairs, or tackling smaller upgrades.
Unlike a traditional loan, you only pay interest on the amount you actually use, so it’s a flexible and cost-effective way to handle short-term expenses.
For dental practices, this option is especially useful during seasonal dips in patient visits or when you need to quickly fix a broken piece of equipment.
It’s also great for incremental improvements, like adding a new treatment room or upgrading your patient management software.
Dental Financing Option #3: SBA Loans
SBA loans are a lifeline for newer dental practices or dentists without perfect credit. These loans are backed by the government, so lenders feel more confident offering better terms, such as lower down payments and longer repayment schedules.
That extra breathing room can be a game-changer, especially if you’re just starting out and need to conserve cash flow while building your patient base.
Dentists often use SBA loans to cover big expenses like buying dental chairs, updating X-ray machines, or even purchasing real estate for a new practice.
Be prepared, though—the application process takes some time and requires a lot of paperwork. But if you’re not in a rush, the generous terms make SBA loans a smart move.
Dental Financing Option #4: Dental-Specific Financing
Next up: specialty lenders.
These lenders offer products designed just for dentists, like 100% financing for buying a practice or loans specifically for equipment or office improvements. They understand how dental practices operate and are more flexible with their terms, often structuring loans based on your practice’s future revenue rather than just your current financials.
For example, if you’re purchasing a retiring dentist’s practice, specialty lenders can bundle financing for the goodwill, equipment, and real estate all into one loan. They also understand that you might need some breathing room before starting repayments, so they often offer repayment plans that align with your cash flow.
Here are a few options to look into:
- Bank of America Practice Solutions
Offers loans for dentists to start, buy, or grow their practices. They also provide financing for equipment and office space. For new practices, they offer options like starting with lower payments and assigning someone to help guide you through the process. - Provide Bank
Provide Bank is all about making things easier for dental professionals. They offer plenty of working capital to help you get started and pair you with experienced project managers and equipment specialists who can guide you through every step of the process.
Dental Financing Option #5: Equipment Financing
If you’re only looking to upgrade or purchase high-end tools like CAD/CAM machines, X-ray systems, or sterilization units without depleting your savings, equipment financing may be a good route to take.
This loan type allows you to pay over time while using the equipment as collateral.
What makes equipment financing especially appealing for dental practices is that the new tools often pay for themselves, in terms of efficiency and customer satisfaction.
For example, a faster imaging system can increase daily patient volume, directly driving up revenue. Some lenders even provide deferred payment options, letting you generate income from the equipment before repayments begin.
Dental Financing Option #6: Personal Savings or Investments
Last but not least, don’t overlook your own savings or investments.
By tapping into your own resources, you avoid monthly loan payments and interest, which can free up cash flow for other priorities.
However, this option isn’t without obvious risks, like dipping into your safety net, which could leave you financially vulnerable.
Another option is bringing in investors. They can give you a big financial boost upfront, which makes it easier to take on bigger projects like opening more locations or creating a dental brand people recognize. But keep in mind, that they’ll want a return on their money, which often means giving up some control or ownership of your practice.
If you’re a solo dentist looking for slow and steady growth, think it through carefully. Before using your savings or bringing in investors, make sure you’re comfortable with the financial risks and how much control you’re willing to share.
Again, we recommend consulting your dental accountant to financially map out the options, and weigh the pros and cons.
Need More Advice Re: Practice Financing Options?
Taking on debt isn’t something to take lightly, especially in a large, complex business such as dental practice.
It can be a powerful tool for growth, but only when managed wisely. You’ll need smart, strategic planning and clear end goals.
Here at Virjee Consulting, we’ve helped hundreds of dental practices find financing solutions tailored to their needs and budgets. Our team works closely with bankers and other lenders year-round, meaning we always have our finger on the pulse when it comes to interest rates, terms, required due diligence, and financial risk.
We’ll sit down to review your financials and guide you toward options that support your growth, without any unnecessary risk.
Need a go-to dental advisor? Schedule a call with our team today.
Simply head over to our Contact Page, fill in a few details, and we’ll get back to you within 1 business day.
Until next time!
