Build a financing strategy around your practice goals
As a dental professional, you’ve invested in years of education and training to build your career. Whether you’re preparing to open your first practice, considering an acquisition or looking to grow an established office, financial decisions can have a lasting impact on your practice.
One of the most important decisions is how you finance those plans. In its second quarter 2026 report‡, the American Dental Association (ADA) noted that dentists’ economic confidence remains below 2024 levels, but the numbers are trending up so far this year. Economic pressures on consumers, lower insurance reimbursements and corporate M&A consolidating the industry have combined to “financially squeeze” today’s dentists.
The right financing strategy can help you invest in your practice while maintaining the cash flow and flexibility you need to operate and grow the business. But there isn’t one financing solution that works for every dentist. Your needs will depend on where you are in your career, your practice’s financial position and what you want to accomplish next.
What are your goals for your dental practice?
Before pursuing a loan, consider your goals for the practice and how your financing decisions today could affect your options in the future.
Start by looking beyond your immediate financing needs.
- Are you starting a new practice?
- Buying an established practice?
- Planning to add operatories or a second location?
- Investing in new technology?
- Bringing in a partner?
Each of these decisions can require a different approach to financing. For example, a startup may require funding for construction, equipment, and working capital, while an established practice may have opportunities to finance an acquisition or expansion based on its existing cash flow.
Understanding where you want the practice to go can help you and your bank determine how financing can support that plan.
What type of financing is available for my practice?
Business loans for dentists generally fall into several categories. Each option has different underwriting criteria, repayment terms, collateral requirements and cash flow impact. In some cases, you and your lender may choose to leverage several financing types to adequately serve your practice’s growth needs.
| Loan type | Common use | Typical structure | Best fit |
|---|---|---|---|
| Dental practice start-up loan | New office, build-out, equipment, working capital | Term loan, SBA loan, practice loan, equipment financing | New practice with strong borrower profile and detailed business plan |
| Dental practice acquisition loan | Purchase of existing practice | Term loan, SBA 7(a), seller note, bank acquisition loan | Cash-flowing practice with measurable collections and EBITDA |
| Dental buy-in loan | Partnership interest or associate ownership stake | Term loan or practice loan | Associate dentist buying equity in an established practice |
| Expansion loan | Additional operatories, second location, renovation | Term loan, SBA loan, practice loan, business line of credit | Existing practice with growth opportunity and positive cash flow |
| Equipment financing | Chairs, imaging, scanners, mills, software, technology | Equipment loan or lease | Practices adding or replacing revenue-producing assets |
| Commercial real estate loan | Purchase or construction of dental office property | Conventional real estate loan, SBA 504, SBA 7(a) | Owner-occupied dental property |
| Working capital loan | Payroll, marketing, supplies, ramp-up costs | Line of credit, short-term loan | Temporary liquidity or seasonal cash flow needs |
| Refinance loan | Replace or consolidate existing debt | Term refinance, SBA refinance, conventional refinance | Practices seeking improved payment structure or debt simplification |
Financing a new dental practice
Starting a dental practice can require a significant investment before you see consistent revenue. Depending on your plans, startup financing may help cover:
- Construction and leasehold improvements
- Dental equipment and technology
- Furniture and fixtures
- Initial supplies and inventory
- Working capital
- Pre-opening and early operating expenses
A well-developed business plan can help you understand how much capital you need and how your practice is expected to perform once it opens. It can also help your lender evaluate whether the proposed financing aligns with your projected cash flow. As you consider financing options in your business plan, consult with tax and financial professionals who are familiar with your industry to ensure you have guidance tailored to you.
The goal isn’t simply to secure enough funding to open the doors. It’s to establish a financing structure that gives the practice an appropriate foundation for the years ahead.
Buying a dental practice or buying into one
For many dentists, purchasing an established practice can be an important step toward practice ownership. Unlike a startup, an existing dental practice typically has a history of revenue, expenses, patient activity and operating performance. That information can provide valuable insight as you evaluate the opportunity and determine an appropriate financing structure.
A practice acquisition loan may help finance the purchase of an established practice. If you’re buying into an existing practice rather than acquiring it outright, your financing needs may look different.
Your bank can work alongside your other advisors—including your CPA, attorney and practice valuation professional—to help you understand how the proposed transaction and financing fit together.
What if you have student debt?
Student debt is common among dental professionals and doesn’t necessarily prevent you from obtaining practice financing.
The important question is how a new loan fits within your broader financial obligations and whether the practice can support the additional debt. Having an early conversation with your financial team can help you understand your potential financing options before you begin negotiating a practice purchase.
Financing growth, expansion or a second location
Practice ownership doesn’t end when you open the doors or complete an acquisition. As your patient base and business evolve, you may need additional capital to support growth. Expansion financing may help fund:
- Additional operatories
- Renovations or remodeling
- New equipment and technology
- Additional square footage
- A second location
- New employees
- Other investments that support practice growth
The financing structure should reflect the purpose of the investment. A long-term loan may be appropriate for a significant renovation or expansion, while a line of credit may provide flexibility for short-term working capital needs.
Before taking on additional debt, consider how the investment is expected to affect revenue, expenses and cash flow. Growth can create opportunities, but it can also temporarily increase costs before the additional investment begins generating revenue.
Financing equipment for your dental practice
Technology and equipment are central to today’s dental practice—and they can represent a significant investment.
Equipment financing can allow you to spread the cost of an equipment purchase over time rather than using a large amount of cash up front.
When evaluating equipment financing, consider the equipment’s cost and useful life, the repayment term and how the monthly payment fits into your practice’s cash flow. It can also be helpful to consider the business purpose behind the investment. Will the new equipment increase capacity, improve efficiency, enhance the patient experience or allow you to offer additional services?
Understanding the expected return on the investment can help you determine whether the timing and financing structure make sense for the practice.
Financing real estate or a new dental office
If you’re purchasing a building or constructing a new dental office, commercial real estate or construction financing may be an important part of the overall strategy.
Real estate financing can potentially support the purchase of a property, while construction financing may help fund the costs associated with building or significantly renovating a dental office. If you are expanding with another location, you may be able to use your current practice value as equity to support your real estate plan or purchase. Check with your financial team about this option because it can provide additional financing opportunities.
If you’re considering purchasing both a practice and its real estate, talk with your banking partner early in the process. The practice acquisition and real estate components may have different financing considerations and should be evaluated as part of the overall transaction.
When should you consider refinancing?
Your financing needs can change as your practice matures.
Refinancing existing debt may be worth considering if your financial position, interest rates or business objectives have changed. Depending on your circumstances, refinancing could help you adjust your repayment structure, change the term of your loan, consolidate debt or manage monthly cash flow.
However, refinancing isn’t automatically the right choice. Consider the interest rate, fees, repayment period, prepayment provisions and total cost of the new financing. The goal should be to make sure your debt continues to support your practice—not simply to lower the monthly payment.
Plan for what’s next
It’s easy to focus on the immediate financing need: opening the practice, completing an acquisition or purchasing new equipment.
Yet successful practice ownership requires looking further ahead. As your practice grows, your priorities may change. You may want to add a partner, bring in an associate, acquire another practice, open a second location or eventually transition ownership.
Your financing strategy should evolve with you.
Consider your long-term goals early and build a relationship with financial professionals who can help you prepare for each stage of ownership. Your CPA, attorney, practice valuation professional and bank can each play an important role in helping you make informed decisions.
The right financing isn’t simply about how much you can borrow. It’s about structuring debt in a way that supports the practice you want to build.
Whether you’re starting a dental practice, purchasing an established office, investing in growth or planning for the future, a financial team with experience working with dental professionals can help you evaluate your options and develop a financing strategy aligned with your goals.
The needs of your practice will always change. With UMB, you have an advisor you can turn to today and into the future. Someone who can offer the right solutions and connections to other industry leaders when you need them, with the success of your practice in mind. Learn more about UMB’s practice finance offerings on our website.
When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.
Industry Insights
As a dental professional, you’ve probably spent at least eight years in school preparing for your career (12 to 14 if you are a dental surgeon). After that, your focus will be on growing your new practice by building your patient panels and providing quality dental care to the community you serve. 
But what’s next? There are questions you need to ask yourself as soon as you open a practice:
- Does your practice need remodeling or construction?
- Do you see yourself bringing on a new partner at some point?
- And most importantly, are you adequately planning for your retirement?
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As we work with dental practitioners, we’ve noticed a trend within this profession. A lack of strategic borrowing to pay for their practice’s expenses is a leading cause that prevents dental practitioners from retiring when and how they want. Only around 8 percent‡ of dentists are able to retire and maintain the lifestyle they had during their working days. Dental practitioners face many challenges in today’s market. Those challenges are further motivation to properly manage your funds. An important aspect of your finances is considering the best borrowing practices for your office. Some questions to consider when thinking about a loan for your dental practice: What are your goals for your practice? Determine where you see your practice over time. Figure out how quickly you want to grow your practice or if you have aspirations to open multiple locations. Identify a plan and partner with industry professionals who will help you achieve your ultimate objectives. Then discuss with your banking partner what financing structure will help – not hinder – this plan. Are you borrowing with the best interest of your practice in mind? Ask your banking partner to explain all loan options so you can align the loan structure to the best interest of the practice. For example, some loans have a balloon payment‡ at the end, which could require you to pay additional interest. The money you might have to pay in additional interest could be used instead to help expand the practice or could be committed to your retirement. What are your ramp-up and wind-down strategies? In addition to determining the long-term growth of your practice (ramp-up), you will also need to eventually consider succession and retirement strategies (wind-down). Have you considered hiring an associate to purchase your practice as a component of your exit strategy? Have you engaged a CPA firm to complete an evaluation of your practice? These are potential issues to consider as part of a succession plan. Every practice is unique and you might even find that long-term goals change over time. Start planning early and understand what financing options are paramount for your practice. Find a banking partner who will help you determine the best loan options for your practice and your eventual retirement and succession plans. For more financial advice, take a look at my video on Business Banking for Dentists. When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.
