# Medical and dental practice loans

Source: https://businessloanbroker.ai/industries/medical-and-dental/
Site: BusinessLoanBroker.ai (powered by Levr)

> Medical and dental practices get the best bank terms of any industry. Practice loans, SBA 7(a), equipment financing and lines of credit explained.

Medical and dental practices get funded most often through bank practice loans, [SBA 7(a) loans](https://businessloanbroker.ai/business-loans/sba-7a-loans/) and [equipment financing](https://businessloanbroker.ai/business-loans/equipment-financing/), and they get the best terms of any industry. Default rates on practice loans are low, income is high and demand is steady, so banks compete for them. A dentist can often borrow the full cost of a startup practice with no revenue yet, which almost no other business can do.

## Key facts
- **Typical amounts:** $100,000 to $5 million for practices, $20,000 to $500,000 for equipment
- **Products that fit:** Bank practice loans, SBA 7(a), equipment financing, lines of credit, SBA 504
- **Usually decline:** Very few, but advances and short term loans are a poor fit at these rates
- **Documents asked for:** Production and collections reports, payer mix, tax returns, license
- **Typical minimums:** Active license, 680 credit, collections that cover the debt for acquisitions

## Which loans work best for medical and dental practices?

A bank practice loan or SBA 7(a) works best for buying, starting or expanding a practice, because the term runs 10 years and the rate sits near the bottom of the business lending range. Equipment financing works best for imaging, chairs, lasers and sterilization, with 100% financing common. A [line of credit](https://businessloanbroker.ai/business-loans/line-of-credit/) covers insurance reimbursement lag and payroll.

- Practice loans: up to 100% of the purchase price plus working capital, 7 to 10 years, typically 7% to 10% at banks.
- SBA 7(a): up to $5 million, used when the bank wants a guarantee behind a startup or a large acquisition.
- Equipment: 2 to 7 years, often 0% down, 6% to 15% APR.
For buying your building, [SBA 504](https://businessloanbroker.ai/business-loans/sba-504-loans/) is usually the cheapest route.

## What do lenders like and dislike about medical and dental practices?

Lenders like the license, which is hard to earn and hard to lose, the high personal income behind the guarantee, and revenue that comes largely from insurers rather than walk in cash. They like collections that grow year over year and a payer mix that is not dominated by one government program.

They dislike falling collections, heavy reliance on a single associate who could leave, and an acquisition price far above the practice's cash flow. Large student loans are tolerated because income covers them, but a credit score under about 680 or unpaid taxes still gets a practice declined.

## How much can a medical or dental practice borrow?

Acquisition and startup loans are sized by the practice's cash flow, not by collateral, and banks will typically lend the full purchase price plus $50,000 to $150,000 in working capital when collections cover the payment with about 1.25 times to spare. Startup dental loans commonly run $350,000 to $750,000 for a build out, equipment and the first months of operating cost. Equipment lenders fund the invoice, from a $20,000 sterilization setup to $400,000 of imaging. Lines of credit are usually sized at one to two months of collections. Run your numbers in the [DSCR calculator](https://businessloanbroker.ai/tools/dscr-calculator/) before you negotiate a purchase price.

## What documents will you be asked for?

Beyond tax returns and bank statements, practice lenders want to see the clinical and billing picture:

- Production and collections reports by month, usually 24 to 36 months
- Payer mix showing the share from each insurer and from patients directly
- Your license, resume and any specialty certifications
- The purchase agreement and the seller's three years of tax returns and financials for an acquisition
- A business plan, projections, lease or letter of intent and build out budget for a startup
- A personal financial statement and student loan schedule
Equipment lenders usually need only the quote and a credit application. The [document checklist](https://businessloanbroker.ai/guides/document-checklist/) covers the rest.

## What are the common uses of funds?

Practice loans typically pay for one of these.

- Buying a practice: a $900,000 acquisition financed over ten years with no down payment and a working capital reserve.
- Starting a practice: a $600,000 startup loan for a lease build out, six operatories and the first four months of overhead.
- Equipment: $180,000 of imaging equipment financed over five years with no money down.
- Expansion or a second office: see [opening a second location](https://businessloanbroker.ai/situations/second-location/).
- Partner buy in: a loan to the incoming associate to buy a share of the practice.
- Refinancing an older practice loan into a lower rate.

## What usually gets a practice application declined?

Declines are rarer here than in any other industry, but they happen. The most common reasons are a personal credit score under about 680, unpaid personal or payroll taxes, a recent bankruptcy, and an acquisition where the price is too high for the practice's cash flow. Lenders also decline when collections have fallen two years in a row, when the seller is the only producer and will leave immediately, or when the buyer has no experience in the specialty. Startup declines usually come from weak projections or a location with too many competing practices. [Why loans get denied](https://businessloanbroker.ai/guides/why-loans-get-denied/) explains how to fix each one.

## How to apply

Apply once here with your license, production reports and tax returns and your application reaches practice lenders, SBA lenders and equipment lenders together. You can also connect your AI assistant to our MCP server through the [agents hub](https://businessloanbroker.ai/agents/) and let it read your reports, fill the application and submit it. It is free to the practice, and offers come back to the same place so you can compare rate, term and working capital side by side.

| Product | Amounts | Typical cost | Speed | Best for |
|---|---|---|---|---|
| Bank practice loan | $100,000 to $5M | 7% to 10% APR | 3 to 8 weeks | Acquisitions, startups, buy ins |
| SBA 7(a) | $150,000 to $5M | Prime plus 3% to 6.5% | 30 to 90 days | Startups and larger deals |
| Equipment financing | $20,000 to $500,000 | 6% to 15% APR | 2 to 7 days | Imaging, chairs, lasers |
| Line of credit | $50,000 to $500,000 | 8% to 15% APR | 1 to 3 weeks | Reimbursement lag, payroll |

## Questions and answers
**Can a new dentist with no revenue get a startup practice loan?**

Yes. Dental startup loans are one of the few true startup products in business lending. Banks lend $350,000 to $750,000 to a licensed dentist with good personal credit, a plan, a signed lease and a build out budget, often with nothing down. Physicians in some specialties can do the same, though less commonly.

**Do student loans stop me from qualifying?**

Usually not. Practice lenders expect large student balances and count your projected practice income against them. What matters is that the payments are current. A deferred or income based plan is fine. Defaulted student loans, especially federal ones, are a decline at most banks until they are brought current.

**Should I use a bank or an SBA loan for an acquisition?**

Compare both. Banks with healthcare divisions often lend the full price at a fixed rate over ten years with a simple process. SBA 7(a) helps when the deal is large, includes real estate, or when the buyer has less experience. SBA adds a guarantee fee and more paperwork, so use it when the bank will not do the deal conventionally.

**Can I finance the building as well as the practice?**

Yes. The building is usually financed separately through SBA 504 or a commercial real estate loan, with 10% to 20% down and a 20 to 25 year term. Some banks will wrap the practice and building into one loan. Keeping them separate often gives more flexibility to sell the practice later.

## Related
- [SBA 7(a) loans](https://businessloanbroker.ai/business-loans/sba-7a-loans/)
- [Equipment financing](https://businessloanbroker.ai/business-loans/equipment-financing/)
- [Business acquisition loans](https://businessloanbroker.ai/business-loans/business-acquisition-loans/)
- [SBA 504 loans](https://businessloanbroker.ai/business-loans/sba-504-loans/)
- [Financing the purchase of a business](https://businessloanbroker.ai/situations/buying-a-business/)
- [DSCR explained: the cash flow test lenders use](https://businessloanbroker.ai/guides/dscr-explained/)

## Apply
Apply for the business: https://apply.businessloanbroker.ai/signup?utm_source=direct&utm_medium=organic&utm_content=md-medical-and-dental
MCP server for AI agents: https://mcp.businessloanbroker.ai/mcp (docs: https://businessloanbroker.ai/agents/mcp/)