How to Finance a Medical or Dental Practice in 2025

Starting, expanding, or acquiring a medical or dental practice is one of the most rewarding steps a healthcare professional can take — but it’s also one of the most expensive. Between purchasing equipment, leasing or buying office space, hiring staff, and managing ongoing operations, launching a practice can easily cost hundreds of thousands (or even millions) of dollars.

The good news? With the right financing strategy, you can secure the capital you need without sacrificing financial stability. Whether you’re opening a new practice, acquiring an existing one, or growing your current business, this guide will walk you through how to finance a medical or dental practice in 2025 — including loan types, approval tips, and smart strategies to maximize funding.

Why Financing Matters for Medical & Dental Practices

Medical and dental practices have unique financial challenges that make outside funding essential:

• High startup costs: Equipment, office build-outs, and technology require significant capital.

• Delayed revenue: Insurance reimbursement cycles can delay cash flow.

• Regulatory and compliance costs: Licensing, software, and security investments are required.

• Growth opportunities: Expansion often requires additional staff, locations, or services.

Without sufficient funding, many practices struggle to launch or scale — but with the right loan, you can cover these costs and focus on delivering quality care.

Key Expenses Financing Can Cover

Business loans and financing solutions can be used to fund nearly every aspect of a healthcare practice, including:

• Leasing, building, or purchasing office space

• Medical or dental equipment purchases

• Electronic health record (EHR) and billing software

• Hiring staff and payroll expenses

• Marketing and patient acquisition

• Practice acquisition or partner buy-ins

• Working capital for cash flow management

Best Loan Options for Medical and Dental Practices

Several types of financing are well-suited to healthcare practices. Here’s how they compare:

1. SBA 7(a) Loans

The SBA 7(a) loan is one of the most popular and versatile financing options for healthcare professionals. These government-backed loans offer competitive interest rates, flexible terms, and funding up to $5 million.

• Use for: Startup costs, working capital, acquisitions, expansions, or refinancing.

• Terms: Up to 10 years for working capital; up to 25 years for real estate.

• Benefits: Lower rates, longer repayment periods, and smaller down payments.

• Best for: Practices with strong credit and a solid business plan.

2. SBA 504 Loans

If your goal is to purchase or build a medical office or dental facility, the SBA 504 program offers long-term, fixed-rate financing for major fixed assets.

• Use for: Real estate purchases, facility build-outs, or large equipment.

• Structure: 50% from a lender, 40% from a Certified Development Company (CDC), 10% down payment.

• Benefits: Low fixed rates and long repayment terms.

• Best for: Practice owners investing in real estate or high-cost expansions.

3. Practice Acquisition Loans

If you’re buying an existing practice, a practice acquisition loan can help cover the purchase price, transition costs, and initial operating expenses.

• Use for: Buying an established medical or dental office.

• Benefits: Faster revenue generation since the patient base is already built.

• Best for: Professionals expanding through acquisition rather than starting from scratch.

4. Equipment Financing

From dental chairs and imaging machines to lab technology and exam room tools, equipment is one of the biggest expenses in healthcare. Equipment financing allows you to spread those costs over time.

• Use for: New or used medical/dental equipment purchases.

• Benefits: Equipment itself serves as collateral, making approval easier.

• Best for: Practices upgrading technology or launching new services.

5. Business Lines of Credit

A line of credit gives you ongoing access to capital that you can draw from as needed — perfect for managing seasonal cash flow or unexpected expenses.

• Use for: Working capital, payroll, supplies, or short-term needs.

• Benefits: Pay interest only on what you borrow and reuse as you repay.

• Best for: Practices with fluctuating revenue or unpredictable expenses.

6. Term Loans

A traditional business term loan provides a lump sum of capital with fixed payments over time.

• Use for: Expansions, renovations, marketing, or large one-time investments.

• Benefits: Predictable payments and flexible use of funds.

• Best for: Established practices with consistent revenue.

Steps to Finance a Medical or Dental Practice (Featured Snippet Section)

1. Estimate total costs and funding needs

2. Prepare a detailed business or acquisition plan

3. Review your credit and financial profile

4. Compare loan types and lenders

5. Submit applications and required documentation

Tips to Improve Your Approval Odds

Lenders view healthcare practices favorably because they typically have stable revenue and low default risk — but you still need to present a strong application. Here’s how to improve your chances:

• Build a solid business plan: Include financial projections, growth plans, and patient acquisition strategies.

• Strengthen personal and business credit: Pay down debt, resolve errors, and maintain a strong payment history.

• Prepare thorough documentation: Lenders often require tax returns, financial statements, licenses, and resumes.

• Show industry experience: Highlight your clinical background and business management skills.

• Offer collateral if possible: Real estate, equipment, or accounts receivable can strengthen your application.

Alternative Financing Options

If traditional bank or SBA loans aren’t an option, consider alternative funding sources:

• Medical and dental-specific lenders: Some lenders specialize in healthcare financing and offer more flexible underwriting.

• Private investors or partnerships: Great for expansion or startup capital without immediate repayment obligations.

• Revenue-based financing: Repay based on a percentage of monthly revenue — useful if your income fluctuates.

• Vendor financing: Some equipment suppliers offer financing directly for large purchases.

Mistakes to Avoid

• Borrowing without a plan: Always align financing with a clear growth or revenue goal.

• Overestimating revenue: Conservative projections help you avoid over-borrowing.

• Ignoring loan terms: Compare APR, fees, prepayment penalties, and repayment schedules.

• Not shopping around: Terms vary widely — compare multiple lenders before choosing.

Conclusion: Build Your Practice With Smart Financing

Whether you’re launching your first dental office, expanding your medical clinic, or acquiring an existing practice, strategic financing is the key to turning your vision into reality. With SBA loans, acquisition financing, lines of credit, and healthcare-specific options available, 2025 offers more opportunities than ever to fund your practice successfully.

Start by calculating your costs, preparing a strong application, and choosing the funding solution that aligns with your goals — and you’ll be well on your way to building a thriving, patient-focused business.