Capital that respects how healthcare actually bills.
Medical and dental practices are highly fundable when the file lands in front of the right lender. Insurance receivables are predictable; practitioner credit profiles are typically strong; the underlying businesses are stable. The friction is in finding lenders who specialize and don’t treat a dental office like a generic small business.
How do dentists and physicians finance a practice purchase?
Through a healthcare-specialty term loan, usually over seven to ten years, often with little or no money down. These lenders treat a practice differently from a generic small business. They know a dental office with an established patient list keeps producing after the seller retires, so they will lend against that goodwill rather than only against the equipment. A first-time buyer straight out of residency can qualify. Generalist lenders often decline the same file because they see a borrower with no ownership history and a large loan request.
What we see funded
- Practice acquisition. Buying an established practice from a retiring practitioner. Healthcare-specialty lenders are aggressive here — long terms, competitive rates.
- Equipment. Imaging (CBCT, panoramic X-ray, MRI), chairs, sterilization, lasers, lab equipment. Specialty equipment lenders bundle service contracts and tax-treatment into the deal.
- Build-out and expansion. New operatory, second location, suite renovation. Term loans of 5–10 years are common.
- Working capital. Insurance reimbursement timing, payroll smoothing, transition periods.
- Receivables financing. AR factoring or insurance-AR-backed lines for practices with heavy commercial-insurance billing.
What a practice deal usually looks like
A dentist three years out of residency buys a two-operatory practice collecting $780K a year. The purchase price is $620K. A healthcare-specialty lender funds the whole amount over ten years, with the first three months interest-only so the transition does not squeeze cash. Underwriting takes two to three weeks, mostly waiting on production reports and the seller’s tax returns.
Equipment moves faster. A CBCT scanner at $95K goes 60 months and can be approved in 48 hours, because the machine itself is the collateral. Build-out sits in the middle: adding two operatories usually runs $150K to $250K on a five-to-seven-year term loan, funded in draws as the contractor bills.
What lenders look at
Healthcare-specialty lenders check five things.
- Your license. Clean and current, with no board actions.
- Years since residency. More is better, but zero is workable. This is the piece generalist lenders get wrong.
- Production reports. What the practice actually bills and collects each month, straight out of the practice management software.
- Payer mix. The split between commercial insurance, Medicaid, and cash. Commercial pays more and pays faster, so a commercial-heavy practice gets better terms.
- Existing debt service. What you already pay each month on student loans and any current practice debt.
Notice what is missing. There is no requirement for years of ownership history. That is the whole reason to route these files to healthcare lenders rather than to the generalists who fund law and accounting firms.
What we recommend
Buying or building? Lead with a healthcare-specialty term loan. Buying equipment? Route it to a lender who knows the gear — they price a scanner better than a generalist ever will. Covering payroll between insurance payments? A line of credit. RBF is almost never right for an established practice. We would only use it as a short bridge, and we would say so.