How Dentists Finance New Practices

Opening a dental practice is a major professional milestone—and a major financial undertaking. From acquiring equipment and securing office space to hiring staff and marketing the practice, startup costs can quickly reach six or seven figures. That’s why dental practice financing plays such a critical role in helping dentists turn years of training into a thriving, independent business.

This guide explains how dentists finance new practices, the funding options available, and how the right financial structure can set a practice up for long-term success. Whether you’re a new graduate or an experienced dentist opening a second location, understanding your financing strategy is essential.

What dental practice financing really means

Dental practice financing refers to the funding solutions dentists use to start, acquire, or expand a dental office. Unlike personal loans, these financing options are designed specifically for business use and often tailored to healthcare professionals.

A well-structured financing plan can cover:

• Practice startup or acquisition costs

• Dental equipment and technology

• Leasehold improvements and buildouts

• Initial operating capital

• Marketing and patient acquisition

Because dental practices have predictable revenue models and high demand, lenders often view them as attractive borrowers—when the financing is structured correctly.

Why financing is so important when opening a dental practice

Even dentists with strong personal savings typically rely on financing. Paying cash for a practice can limit growth and strain liquidity, especially during the early months before patient volume stabilizes.

Key benefits of dental practice financing

• Preserves cash flow: Keeps working capital available for payroll, supplies, and marketing

• Accelerates growth: Allows dentists to open sooner and scale faster

• Access to modern equipment: Makes high-quality imaging, chairs, and software affordable

• Builds business credit: Establishes a strong financial profile for future expansion

• Tax efficiency: Certain financing structures may offer depreciation and interest deductions

Strategic dental practice financing is less about taking on debt and more about deploying capital effectively.

How dentists finance a new practice: step-by-step

Financing a dental practice typically follows a structured process. Understanding each step helps dentists prepare and improve approval odds.

Step 1: Define the practice model

Lenders want clarity. Dentists must decide whether they are:

• Starting a practice from scratch

• Buying an existing practice

• Partnering into an established office

• Opening a satellite location

Each model carries different funding requirements and risk profiles.

Step 2: Estimate total startup costs

Startup costs often include:

• Dental equipment and technology

• Lease deposits and renovations

• Furniture and IT systems

• Licensing, insurance, and legal fees

• Initial marketing and staffing

According to industry data reported by Forbes, dental practice startup costs can range from $350,000 to over $750,000 depending on location and scope.

Step 3: Prepare financial documentation

Most lenders will request:

• Personal credit history

• Dental school transcripts or resume

• Business plan or pro forma

• Practice location details

• Existing debt obligations

Strong preparation can significantly shorten approval timelines.

Step 4: Choose the right financing structure

Dentists often combine multiple funding products to meet different needs, such as pairing equipment financing with a working capital loan.

Step 5: Secure funding and launch

Once approved, funds are disbursed according to the financing structure, allowing the dentist to move forward with buildout, hiring, and opening.

Common types of dental practice financing

Not all financing options serve the same purpose. Choosing the right type depends on where you are in your practice journey.

SBA loans for dental practices

SBA-backed loans are one of the most popular options for dentists due to their:

• Longer repayment terms

• Lower down payment requirements

• Competitive interest rates

The U.S. Small Business Administration highlights healthcare practices as strong candidates for SBA financing because of stable demand and predictable cash flow.
Source: https://www.sba.gov

Practice acquisition loans

When purchasing an existing dental practice, acquisition loans help cover:

• Goodwill and patient base

• Equipment and inventory

• Transition costs

These loans are commonly structured to align with the acquired practice’s cash flow.

Dental equipment financing

Equipment financing allows dentists to acquire essential tools such as:

• Digital X-ray systems

• Dental chairs and operatories

• CAD/CAM technology

Because the equipment serves as collateral, approval requirements are often more flexible.

Working capital loans

Working capital financing supports day-to-day operations, including:

• Payroll

• Supplies

• Marketing campaigns

• Cash flow gaps

This type of financing is especially useful during the first year of operations.

Business lines of credit

A line of credit provides flexible access to funds as needed, making it ideal for managing ongoing expenses or unexpected costs.

Who dental practice financing is best for

Dental practice financing is well-suited for:

• New dental school graduates opening their first practice

• Associate dentists transitioning to ownership

• Dentists acquiring an existing practice

• Practice owners expanding to new locations

• Dentists upgrading equipment or technology

According to data from the U.S. Census Bureau, healthcare services—including dental offices—continue to grow steadily, reinforcing the long-term viability of dental practices.
Source: https://www.census.gov

Dental practice financing vs. other funding options

Dentists sometimes consider alternatives such as personal loans or investor partnerships. While these options can work in limited cases, they often come with trade-offs.

Financing vs. personal savings

Using savings avoids interest costs but can leave the practice undercapitalized. Financing preserves liquidity and reduces personal financial risk.

Financing vs. investors

Bringing in investors may dilute ownership and decision-making authority. Most dentists prefer full control of their practice.

Financing vs. credit cards

Credit cards carry high interest rates and are rarely suitable for large startup expenses.

For most dentists, professional dental practice financing offers the best balance of control, affordability, and scalability.

How Crestmont Capital helps dentists finance new practices

Crestmont Capital specializes in helping professionals secure smart, growth-focused financing. Their approach is consultative, not transactional—meaning dentists receive guidance, not just funding.

Crestmont Capital supports dentists with:

• SBA loan programs tailored for healthcare practices
  https://crestmontcapital.com/sba-loans/

• Dental equipment financing for modern, efficient offices
  https://crestmontcapital.com/equipment-financing/

• Business loans designed to support startup and expansion needs
  https://crestmontcapital.com/business-loans/

• Business lines of credit for flexible working capital
  https://crestmontcapital.com/business-lines-of-credit/

By understanding the unique economics of dental practices, Crestmont Capital helps dentists structure financing that aligns with long-term success.

Real-world scenarios: how dentists use financing

Scenario 1: New graduate opening a startup practice

A recent dental school graduate secures an SBA loan to fund buildout, equipment, and initial operating capital, allowing them to open without exhausting personal savings.

Scenario 2: Associate dentist buying out a retiring owner

An associate dentist uses a practice acquisition loan to purchase an established office with an existing patient base, minimizing ramp-up time.

Scenario 3: Practice expansion into a second location

An established dentist combines equipment financing with a line of credit to open a second office in a growing suburban market.

Scenario 4: Technology upgrade for competitive advantage

A practice owner finances digital imaging and CAD/CAM equipment to improve patient experience and increase efficiency.

Scenario 5: Managing early cash flow challenges

A startup practice uses working capital financing to cover payroll and marketing expenses during the first six months.

Frequently asked questions about dental practice financing

How much does it cost to open a dental practice?

Startup costs typically range from $350,000 to $750,000 or more, depending on location, size, and equipment needs.

Can dentists get financing with student loan debt?

Yes. Many lenders understand the prevalence of student loans among dentists and focus more on income potential and practice cash flow.

Do I need a business plan to get financing?

Most lenders require at least financial projections and a clear overview of the practice model, even if a formal business plan is not mandatory.

How long does approval take?

Approval timelines vary by product but often range from a few weeks to a few months, especially for SBA loans.

Can financing cover marketing and hiring?

Yes. Many financing structures include working capital to support staffing and patient acquisition efforts.

Is dental practice financing tax-deductible?

Interest and depreciation may be deductible, but dentists should consult a tax professional for personalized guidance.

Next steps for dentists considering financing

Before applying, dentists should:

1. Clarify their practice goals and timeline

2. Estimate total startup or acquisition costs

3. Review personal and professional financials

4. Work with a lender experienced in dental practice financing

Partnering with a knowledgeable funding advisor can simplify the process and improve outcomes.

Conclusion

Opening a dental practice is both a professional achievement and a financial commitment. With the right dental practice financing, dentists can launch confidently, preserve cash flow, and position their practices for long-term growth. By understanding available options and working with experienced partners like Crestmont Capital, dentists can turn their vision of ownership into a sustainable, successful reality.

Disclaimer:
The information provided in this article is for general educational purposes only and is not financial, legal, or tax advice. Funding terms, qualifications, and product availability may vary and are subject to change without notice. Crestmont Capital does not guarantee approval, rates, or specific outcomes. For personalized information about your business funding options, contact our team directly.