A Guide to SBA Loans For Dental Practices

According to the American Dental Association (ADA), today’s modern dental practice will need roughly $500,000 in working capital just to “open its doors.” The good news is that there is a funding product that’s accessible to reach this vital capital. It’s called a Small Business Administration (SBA) Loan, sponsored by the US government.

If you want to learn more tips and tricks on SBA loans, then this article is for you! Find out more here on how to get an SBA loan. Then you’ll know if it’s the right way to make your dream to open your own dentist office a reality.

What’s A “Small Business”?

“Small businesses” are privately-owned companies that have a certain employee count and annual revenue amount depending on their specific industry.

A business is considered “small” when it earns less than $750,000 in revenues annually and hires fewer than 250 employees. Sometimes you’ll hear a small company describe itself as either a “corporation” or a “partnership.

A “small business” classification varies based on what industry your company works in. You can find the criteria that you’ll need to meet within your industry in the US Census Bureau industry Code. That’s how you’ll know your company fits this ”small business” definition within that field.

What Are SBA Loans?

SBA Loans are low-interest, long-term loans awarded to small companies by the US Small Business Administration (SBA). The SBA partners with a pre-approved SBA lender to offer these loans to small businesses.

The SBA doesn’t directly lend funds to the small company. Their job is to guarantee a portion of the loan, which reduces the risk for the SBA preferred lender.

Background On The SBA

The US government first created the SBA in 1953. Since that time, their mission is to assist, advise and protect small business concerns. The 1953 act also created requirements that guarantee small companies can receive fair portions of government contracts and surplus property.

In 1954, the SBA created more loan products to help small companies that were victims of natural disasters. The Small Business Investment Company (SBIC) program followed in 1958 that provides investment funding to small, capital investment firms. The SBIC program also started to provide these small investment companies with management assistance.

Today’s Modern SBA

The SBA today offers a wide variety of customized loans designed to help promote small enterprises. For example, there are now loans specifically dedicated to veteran, women, and minority-owned enterprises. The SBA will also offer funding to small businesses that work in the international trade field.

Types Of SBA Loans

There are a variety of SBA loans that a small business can leverage to “open its doors.” These loans include:

7(a) Loans

SBA’s 7(a) loans can help pay for your start-up expenses for your dentist’s office. These expenses can range from office equipment to your first month’s rent. An SBA 7(a) loan can also help your dental practice build revolving funds that you can use throughout your operating year.

An SBA 7(a) loan amount is usually $2 million or less per small company. The SBA guarantees roughly 75 percent of a 7(a) loan or no more than $1.5 million.

504/CDC Loans

504 or Certified Development Company (CDC) loans are long-term loans meant to accelerate economic development within a town or city.

504/CDC loans provide a fixed-rate, long-term loan for major business investments such as machinery or real estate. Your dental practice can use a 504 loan to buy or renovate an office building.

An SBA 504 loan amount is usually $5.5 million or lower. The SBA guarantees approximately 40 percent of a 504 loan, while the SBA lender funds the rest. A 504 loan has a 10–20-year maturity period.


The Microloan program offers customized financing to help a business borrow smaller, or “micro-level” amounts to cover their everyday business expenses. Microloans are usually no more than $350,000 per individual company.

A non-profit organization can also apply for a microloan to assist them with their start-up fees. These average microloan amounts are usually around $13,000 per organization.

SBA Loan Eligibility

SBA loan eligibility varies between individual lenders. However, most SBA banks require these qualifications:

  • Your dental office operates within the US
  • Your operations meet an SBA’s “small business” definition
  • Your business is registered as “for-profit”
  • Your dentist office has been in practice for a significant amount of time
  • You have outstanding personal credit (Over a 680 FICO score)
  • You’re able to demonstrate profitability and reliable revenue
  • You can show that you’ve invested your own money and time and money into your dental practice
  • Your debt service ratio shows that you can meet other financial obligations.

Collect your documentation that will prove your loan eligibility to the lender. Once these files are together, you can begin to apply for an SBA loan.

SBA Loan Application Forms

Each SBA loan program uses these common application forms. These forms include:

Borrower Information (Form 1919)

This form provides the SBA an introduction to your company owners and investors. Top SBA lenders will use this form to make sure no one connected to your business will have a conflict of interest.

Statement of Personal History (Form 912)

This form provides space for you to include the details on any past or current criminal convictions. SBA loan applicants can qualify for loans if they have a record of past criminal activity but they aren’t eligible if they’re currently part of any criminal matters. The SBA considers these types of applicants on a case-by-case basis.

Personal Financial Statement (Form 413)

This form outlines a business owner’s existing personal assets and liabilities. Form 413 will also describe any personal collateral or outstanding debt that you might have as well.

Ready To Apply For An SBA Loan?

If you think you’re ready, you can start the process today. Gather your documentation that shows you meet the minimum eligibility requirements.

Obtain your personal credit scores so that you can show you have an excellent credit history. Ask your accountant to help you identify your assets and liabilities for Form 413.

You can also find more helpful advice on our website. We have information there on the top banks for dental loans. Tap into our decades of experience today to reach your business dreams.