Medical and dental practice loans

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 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 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 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 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.
• 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 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 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.