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Starting or expanding a dental practice is never inexpensive. There are certain costs and expenses that all dentists face, such as office and exam room furniture, dental equipment (x-ray equipment, drills, etc.), office equipment (phone system, computers, copier), rent, and many other fixed and variable monthly costs (insurance, payroll, etc.).
Over time, a dental practice builds a loyal following from nearby residents because of its convenience, reputation, the insurance it accepts, and the networks it participates in.
An SBA loan can help get your dental practice off the ground or expand an existing practice. In addition, it can be used to buy new equipment, purchase another dental practice, and for many other purposes.
Benefits of owning a dental practice
Along with the high earning potential, the biggest benefit of owning a dental practice is the satisfaction you experience from helping people. When you leave for home, you know you made a difference in the quality of life of the people you treated.
Owning a dental practice also means you’ll achieve financial independence. For example, in 2022, the income range for a pediatric dentist in America was $193,000 – $300,000 per year, $260,000 – $375,000 for an orthodontist, and $254,000 to $397,000 per year for an oral and maxillofacial surgeon.
How to obtain financing to open, expand, or buy a dental practice
If you’re looking for dental practice financing, consider applying for an SBA loan. The various loan programs offered by the Small Business Administration can help provide the funding you need to set up your practice.
The SBA is a government agency that doesn’t lend you the money directly. Instead, it guarantees a significant portion of your loan. That lowers the risk profile for SBA’s lending partners, which include conventional banks and financial institutions, so they’re more willing to approve loan requests.
You also must put significantly less cash or equity down to qualify with an SBA loan. And, with an SBA loan, no covenants or collateral is required.
The most common SBA dental practice loans include the SBA 7(a) and Express loans.
SBA 7(a) loan for starting or buying a dental practice
The 7(a) is the preferred SBA loan for dental practices. You can use the funds made available through this program to purchase equipment, expand your current location, or even buy another dentist’s practice.
If you own an existing dental practice and want to buy out a partner, you can also utilize the funds from an SBA 7(a) loan for that purpose.
The maximum SBA loan for a dental practice is $5 million and is generally repaid with monthly payments that include interest.
The payment stays the same for fixed-rate loans since the interest rate is locked in. However, for variable rate loans, it’s up to the lender to request a different payment amount if the interest rate changes.
SBA Express Loans for dental practices
SBA Express Loans are a part of the agency’s 7(a) loan program. Up to $500,000 can be borrowed under an Express loan. The approval times are typically much faster for these loans.
Express loans over $25,000 have a collateral requirement. The SBA usually responds to Express loan applications within 36 hours.
The lenders ultimately make all eligibility and credit decisions. The market prime rate plus 4.5-6% interest is applied with repayment terms of up to 10 years.
How to apply for an SBA dental practice loan
Access our network of SBA lenders that includes leading nationwide banks, credit unions, and other financial institutions. Our lending partners are experienced in handling applications for dental practices, so they will diligently pursue your opportunity.
There are countless SBA approved lenders that are ready to offer you a dental practice SBA loan. These are just some of the top lenders:
| Rank | Bank | City | State | # of Loans | Avg Loan $ | Avg Interest |
|---|---|---|---|---|---|---|
| 1 | Live Oak | Wilmington | NC | 64 | $1,860,781 | 5.7% |
| 2 | The Huntington National Bank | Columbus | OH | 45 | $872,636 | 6.3% |
| 3 | Bank of America | Charlotte | NC | 23 | $603,117 | 2.8% |
| 4 | Wells Fargo | Sioux Falls | SD | 23 | $1,050,465 | 5.6% |
| 5 | BayFirst National Bank | Saint Petersburg | FL | 19 | $445,032 | 8.6% |
| 6 | PNC Bank | Wilmington | DE | 12 | $1,251,183 | 4.2% |
| 7 | United Midwest Savings Bank | De Graff | OH | 12 | $1,518,667 | 6.2% |
| 8 | First-Citizens Bank & Trust | Raleigh | NC | 10 | $1,873,300 | 5.4% |
| 9 | BancorpSouth Bank | Tupelo | MS | 8 | $233,125 | 7.3% |
| 10 | U.S. Bank | Cincinnati | OH | 8 | $211,225 | 7.1% |
| 11 | United Community Bank | Blairsville | GA | 8 | $1,100,000 | 5.5% |
| 12 | Bank of the West | San Francisco | CA | 7 | $1,005,729 | 5.7% |
Think the entire process of getting an SBA loan for your dentist practice is like a self-administered root canal? Apply online and we can help you find the perfect bank to grow your business. We will generate a free report for you showing the top banks for dental nationwide or just banks in your area with experience with dental loans.
For more information on dental practice loans, see our dental practice loan guide