SBA loans for dental practices

What can dentists use an SBA loan for?

SBA loans can fund most of the big financial moves in a dental career. The most common uses are:

• Buying an existing practice, including its goodwill, equipment and patient records. See SBA loans to buy a business.
• Opening a start-up (de novo) practice, from build-out to the first months of payroll. See SBA start-up loans.
• Buying out a partner’s share of a practice you already own.
• Equipment and technology, such as dental chairs, digital imaging, cone-beam CT and CAD/CAM systems. See SBA equipment loans.
• Building out leased space, including plumbing, cabinetry and new operatories.
• Buying the building your practice operates from. See SBA commercial real estate loans.
• Refinancing practice debt into a longer-term loan with a lower payment.

The SBA 7(a) loan is the usual starting point. It goes up to $5 million, and one loan can combine several of these uses. Real estate and long-lived equipment can also use an SBA 504 loan.

Can you use an SBA loan to buy a dental practice?

Yes, and it’s one of the most common reasons dentists use SBA financing. Goodwill often makes up most of a practice’s price, and conventional lenders are wary of lending against it. SBA 7(a) lenders underwrite the practice’s cash flow instead, so one loan can cover goodwill, equipment and working capital.

Definition

Goodwill: The part of a practice’s price above the value of its equipment and other hard assets, reflecting its patient base, reputation and referral relationships.

These SBA rules shape every practice purchase:

SBA requirement	Threshold or limit
Minimum equity injection	10% of the total project cost
Seller financing	A seller note on full standby can cover up to half of the injection
Independent business valuation	Required above a $350,000 purchase price
Quality of Earnings report	$3 million or more purchase price
Minimum debt service coverage	1.25x for a first-time acquisition
Maximum term	10 years; a real estate share can go to 25 years

Many practice sales include a transition period in which the selling dentist introduces patients and staff to the new owner. The SBA limits how long and in what role a seller can stay, so agree on transition terms with your lender before you sign.

For letters of intent, due diligence and the rest of the process, see buying a business with an SBA loan.

Can you use an SBA loan to buy out a dental partner?

Yes. The SBA treats it as an owner buyout, and you can buy all or part of a partner’s interest as long as it happens in one transaction. Key rules:

• The minimum equity injection is 10%, though the lender may reduce it when the practice is financially strong.
• A partner who stays on with a stake of less than 20% must personally guarantee the loan for 2 years.
• If you’ve worked in the practice for less than 24 months, you can’t take majority control unless the loan is underwritten as an initial acquisition.

Can you get an SBA loan to start a dental practice?

Yes. The SBA treats a business that has been generating revenue for 1 year or less as a start-up, and start-ups need an equity injection of at least 10% of the total project cost.

Because there’s no operating history to underwrite, lenders usually expect:

1. A business plan covering the location, local demographics, competing practices and how you’ll attract new patients.
2. Financial projections showing the practice can reach debt service coverage of at least 1.15x.
3. A detailed build-out budget, often with contractor bids and equipment quotes.
4. Clinical experience, often as an associate, plus a plan for managing staff, scheduling and billing.

Can you finance dental equipment and build-out with an SBA loan?

Yes. Equipment can be part of a purchase or start-up loan, or financed on its own when you add a chair or upgrade imaging. Under the 7(a) program, equipment can be repaid over up to 10 years, or up to 15 years when its useful life supports it. Long-lived equipment with at least 10 years of useful life can also be financed with a 504 loan.

Build-out of leased space is usually financed with a 7(a) loan alongside equipment and working capital. Lenders generally want your lease, including renewal options, to run at least as long as the loan.

Can a dentist buy a building with an SBA loan?

Yes, as long as the practice occupies enough of it: at least 51% of an existing building, or 60% of a newly built one. You can lease out the rest.

• A 7(a) loan can include the building, on its own or with a practice purchase, with the real estate share repaid over up to 25 years.
• An SBA 504 loan pairs a bank loan with a fixed-rate debenture from a Certified Development Company (CDC). A typical project is split 50% / 40% / 10%: bank loan, CDC debenture and your contribution. A practice operating 2 years or less contributes 15% instead.

Since July 4, 2026, a business can combine 7(a) and 504 financing for up to $10 million in total, which helps when you buy a practice and its building together.

Can you refinance dental practice debt with an SBA loan?

Often, yes, if the refinance passes SBA tests. In most cases the new loan must lower your payment by at least 10%, and the existing debt must have been paid on time for the last 12 months. See SBA debt refinancing for the exceptions.

What do lenders look for in a dental practice loan?

Expect lenders to focus on:

• Collections and production trends. Lenders usually ask for tax returns plus production and collections reports, and want stable or growing collections.
• Payer mix. The balance of fee-for-service, PPO and Medicaid patients affects revenue and cash flow.
• Patient base. Active patients, new-patient flow and hygiene recall show whether revenue is likely to hold after a sale.
• Clinical and management experience. Your years in practice, the procedures you perform and how you’ll run the business side.
• Personal finances and credit. The SBA sets no minimum credit score. Many lenders count student loan payments when they review your personal cash flow.
• Ownership. Owners of 20% or more personally guarantee the loan. Since March 1, 2026, a business’s owners must be U.S. citizens or nationals living in the U.S.; lawful permanent residents no longer qualify.

How do you find lenders that fund dental practices?

SBA lenders specialize. Some have dedicated practice-lending teams that know how to read collections reports and value a patient base; others rarely lend to dentists. Starting with lenders that already fund practices like yours usually means fewer surprises in underwriting.

The SBA publishes public records of the 7(a) and 504 loans it guarantees, including each borrower’s industry (NAICS) code. SBA Loan Connect ranks lenders using those records by NAICS code, so you can see which lenders actually fund dental practices before you apply. Partner lenders are clearly labeled. See how we rank lenders.