Buying a dental practice is both a financing decision and an operating transition. The purchase price may reflect patient relationships, collections, equipment, staff, systems and goodwill, while the buyer may also need cash for professional fees, facility work, technology, credentialing, payroll and the first months after closing. This guide explains how to build a complete acquisition budget, examine the practice’s verified performance and compare potential funding paths without assuming that a valuation, forecast or initial financing discussion guarantees a result.
Build the complete acquisition budget
Begin with the proposed purchase price and identify exactly what is included: equipment, supplies, patient records and goodwill, phone numbers, website and branding, contracts, accounts receivable, real estate or other assets. The purchase agreement should distinguish what transfers from what remains with the seller.
Add legal, accounting, valuation, licensing, insurance, lease, technology, data migration, credentialing, deposits, repairs, training and closing costs. Include enough working capital for payroll, laboratory bills, supplies, rent, marketing and debt payments while collections stabilize after the transition.
Prepare a sources-and-uses schedule showing buyer cash, eligible financing, seller financing and any other documented source. Do not rely on future production, uncommitted funds or the same contribution twice. The CashMigo medical and dental practice funding page provides a focused starting point for acquisition, equipment and operating-capital needs.
Verify value, collections and practice cash flow
Review several years of tax returns and financial statements when available, plus current production and collection reports, bank activity, payroll, accounts receivable, accounts payable and current debt. Reconcile reported revenue with reliable records and separate dentist production from actual collections.
Study active-patient definitions, new-patient flow, recall and hygiene activity, procedure mix, payer mix, adjustment and write-off patterns, provider concentration and historical patient retention. Forecasted retention should be tested rather than treated as guaranteed.
The American Dental Association’s practice-valuation guidance identifies factors such as cash flow, collections, patient retention, equipment condition, office space and long-term revenue and margin trends. Use a qualified dental-practice valuator and advisers; CashMigo does not determine practice value.
Tell CashMigo what the business needs, how much and how soon. We will review the request and help identify potential next steps.
Check My Funding Options →Review equipment, technology and the facility
Create an inventory of dental chairs, delivery units, imaging systems, sterilization equipment, compressors, vacuum systems, laboratory equipment, CAD/CAM technology, computers and practice-management systems. Record age, condition, service history, ownership, liens, warranties and expected replacement timing.
A low purchase price can be misleading if major equipment, cybersecurity, software, accessibility or facility work is required soon after closing. Obtain vendor quotes and place near-term replacements in the acquisition budget rather than assuming normal collections will absorb every expense.
If the premises are leased, review assignment, term, renewal options, rent increases, maintenance obligations, permitted use, signage, improvements, personal guarantees and landlord consent with counsel. If real estate is included, value and finance it separately from the operating practice when appropriate.
Plan the seller, staff and patient transition
Document whether the seller will continue working, introduce the buyer, assist with insurer and referral relationships or provide clinical and administrative transition support. Define the schedule, compensation, responsibilities and end date rather than relying on informal expectations.
Evaluate staffing, compensation, benefits, accrued obligations, key-person dependence and the likelihood that team members will remain. Build a plan for patient communications, records, scheduling, phone and website continuity, vendor accounts and community introductions that follows professional, privacy and legal requirements.
Seller financing, holdbacks or earnouts may align part of the price with the transition, but they can create complicated payment, security, standby, subordination and adjustment terms. Restrictive covenants and patient-notification rules vary; use qualified legal counsel rather than copying another transaction’s terms.
Compare potential financing paths
SBA 7(a) financing may support a qualifying complete or partial change of ownership, working capital, equipment and other eligible uses. The SBA’s current 7(a) information explains that applicants work directly with participating lenders and remain subject to eligibility, underwriting, documentation and current program rules.
A conventional term loan may fit a qualified buyer and established practice with documented cash flow. Equipment financing may be used for eligible new or replacement assets, while commercial real estate financing may be considered if the property is part of the transaction. Seller financing may fill part of the structure when acceptable to the senior provider.
Compare the buyer contribution, net proceeds, payment amount, term, complete cost, collateral, guarantees, prepayment treatment, covenants, closing conditions and permitted uses. An attractive monthly payment does not by itself prove that the structure covers the complete transaction or fits the practice’s conservative cash flow.
Prepare the buyer file and post-closing plan
A provider may review the buyer’s dental license, resume, clinical and management experience, personal financial information through a secure channel, credit, liquidity, outside obligations, ownership structure and contribution. Prepare an acquisition plan explaining how clinical care, administration, staffing, billing and growth responsibilities will transfer.
Build a monthly first-year forecast using conservative production, collections and retention assumptions. Include payroll, laboratory and supply costs, rent, insurance, taxes, technology, marketing, owner compensation, existing obligations, acquisition debt and a reserve for unexpected equipment or facility needs.
Useful transaction records may include the letter of intent or purchase agreement, valuation, seller tax returns and financial statements, production and collection reports, patient and payer summaries without unnecessary personal information, equipment and lease records, debt schedules and the buyer’s sources-and-uses plan. Begin with non-sensitive information through CashMigo’s 60 second funding check; use an approved secure channel for tax returns, identification, bank records and confidential practice documents.
Frequently asked questions
Can SBA financing be used to buy a dental practice?
Potentially. SBA 7(a) financing can support qualifying changes of ownership and related eligible uses, subject to current SBA rules, lender requirements, underwriting, documentation and final approval.
How is a dental practice valued?
A qualified valuator may consider collections, cash flow, patient and payer characteristics, retention, equipment, office space, staffing, goodwill, market conditions and other transaction-specific factors. A lender may require its own valuation.
Can equipment and working capital be included?
Potentially. The buyer should identify equipment, installation, facility, technology and post-closing operating needs in a complete sources-and-uses schedule and confirm eligible uses with the provider.
What records may be requested?
Common records may include purchase documents, valuation, seller tax returns and financial statements, production and collection reports, patient and payer summaries, equipment lists, lease terms, debt, payroll and buyer financial information through a secure channel.
Does seller financing count as the buyer contribution?
Not automatically. A provider may impose specific conditions on a seller note, including standby, subordination, repayment or injection treatment. Confirm the proposed structure before relying on it.
How long does dental practice acquisition financing take?
Timing varies with the buyer, provider, valuation, due diligence, documentation, licensing, lease or real-estate issues and closing conditions. Do not commit to a closing date based only on an initial estimate.
