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Buying into a medical or dental practice is the largest single financial decision most doctors make outside of a home purchase. Whether you are a dentist buying out a retiring partner, a cardiologist joining an established group as an equity partner, or an ophthalmologist adding an in-office surgical suite, the financing has to be sized to a very specific transaction. The good news: lenders love healthcare practices, and the rates reflect it.
This guide covers the three places where physician and dental practices actually borrow real money, why insurance-billing practices price better than typical small businesses, and how to bridge the gap between treating a patient and getting paid by the insurer.
Acquisitions, partner buy-ins, and specialty equipment
Almost every dollar a practice borrows falls into one of three buckets. The first is practice acquisition. A general dentist buying an existing practice from a retiring owner typically pays 60-80% of trailing 12-month collections, with the higher end of that range reserved for practices with strong hygiene recall, modern equipment, and a stable patient base. A practice collecting $1.2M last year usually trades somewhere between $720K and $960K. SBA 7(a) is the standard structure: 10% down, 10-year amortization, and the option to stretch to 25 years if you are bundling in the commercial real estate. Our SBA 7(a) program handles dental and physician acquisitions weekly.
The second bucket is partner buy-ins. When a junior associate dentist or physician buys equity into an existing practice, the transaction is usually 1-7 years to amortize and is often structured against the practice's cash flow rather than the buyer's personal balance sheet. Many specialty lenders carve these out as "practice loans" that do not require a personal guarantee from the senior partner, which matters because the senior partner has typically already personally guaranteed the original practice debt and does not want to stack another PG on top.
The third bucket is specialty equipment. Dental cone-beam CT scanners run $80K to $200K. Intraoral scanners (iTero, Trios, Medit) land at $25K to $50K. Surgical microscopes for endodontists or ENTs run $30K to $100K. CO2 and erbium lasers price at $40K to $80K. In-office CT for orthopedic surgery clears $250K to $500K. Most of these qualify for equipment financing with 0-10% down and 5-7 year terms, secured by the device itself. For a deeper look at lease versus finance versus buy math, see our breakdown of equipment financing structures.
Why physician and dental practices get better rates
Healthcare practices price better than almost any other small business category, and the reason is boring but real: they default less. SBA portfolio data shows physician and dental practice 7(a) loans default at roughly 1-3% historically, compared to 5-10% across all 7(a) borrowers. Patients keep needing teeth cleanings and physicals through recessions. Insurance contracts produce recurring, semi-predictable revenue. Practices with established patient bases do not disappear overnight the way a restaurant or retail concept can.
Lenders price that lower risk directly into the deal. A dental practice acquisition that would price as a generic small business loan at Prime + 5 to 6 often closes as a healthcare specialty loan at Prime + 1.5 to 2.5. On a $900K acquisition loan amortized over 10 years, that 3-point spread is roughly $135K of interest cost across the life of the loan. The same dynamic shows up in conventional term loans outside the SBA program, where banks compete hard for physician and dentist relationships because they tend to be sticky, multi-product customers.
Specialty matters within that picture. Primary care, dental general practice, ophthalmology, dermatology, and podiatry are the most lender-friendly because the patient base is broad and recurring. Hospital-dependent specialties (anesthesiology, hospitalist medicine) are harder to finance because the practice does not own the patient relationship. For the full picture on how SBA 7(a) qualifies practice deals, our guide on how to qualify for an SBA 7(a) loan walks through underwriting in detail. If your acquisition also includes the building, our SBA 504 page covers when 504 beats 7(a) for the real estate piece.
Insurance AR financing and the reimbursement gap
The one cash flow problem that hits every insurance-billing practice is the gap between performing the procedure and getting paid. Commercial insurers typically pay clean claims in 14-30 days. Medicare runs 14-30 days for electronic clean claims but routinely stretches longer when there are coding questions. Medicaid is the slowest, often 30-90 days depending on the state. Meanwhile payroll, rent, and supplies are due weekly or monthly.
Insurance accounts receivable financing solves this. A specialty AR lender will advance 70-85% against clean receivables under 90 days, charging Prime + 2-4% plus a monitoring fee. As the insurer pays, the advance is repaid and you draw against new receivables in a revolving structure. The practical effect is that you collect on procedures within days of billing instead of weeks. This is more common at larger practices ($2M+ in AR) because the setup cost and ongoing monitoring make smaller balances uneconomical. For smaller practices, a standard business line of credit often does the same job with less complexity, drawing as needed when reimbursement runs slow.
One nuance worth flagging: payer mix matters more than total AR size. A practice with 70% commercial and 30% Medicare reimbursement is much more financeable than a practice with heavy Medicaid concentration, because Medicaid AR ages faster and discounts harder. Lenders will pull an aging report and look at what is sitting past 90 days. If you are running heavy Medicaid, plan on lower advance rates or a different structure entirely. For a comparison of working capital structures, see working capital versus business line of credit.
How TurboFunding Helps
TurboFunding finances medical, dental, and specialty healthcare practices across the full transaction stack. SBA 7(a) for practice acquisitions and partner buy-ins, SBA 504 when commercial real estate is part of the deal, equipment financing for cone-beam CT, intraoral scanners, surgical microscopes, and in-office imaging, and business lines of credit to bridge the reimbursement gap. We fund from $10K to $5M, accept 550+ FICO on revenue-based products, and offer same-day funding for qualified working capital applicants. Our 3-minute application uses a soft credit pull, so checking your rate has no impact on your score. If you are buying a practice, buying in as a partner, or adding the equipment that changes what your practice can offer, Find out More.
Frequently Asked Questions
Q. How is a dental or medical practice valued for acquisition?
A. Most general dental practices trade at 60-80% of trailing 12-month collections, adjusted up or down for hygiene production percentage, modern equipment, lease quality, and patient retention metrics. Physician practices are more often valued on EBITDA multiples or revenue multiples depending on specialty. Specialty practices (oral surgery, orthodontics, dermatology) often trade higher than general practice because of higher per-patient revenue and longer treatment cycles.
Q. Do I need a personal guarantee on a partner buy-in loan?
A. The buying partner almost always signs a PG. The senior partner usually does not, because most specialty lenders structure buy-in loans as the practice borrowing on behalf of the new partner, secured by the practice cash flow and the equity being purchased. This is one of the biggest reasons it is worth using a healthcare specialty lender instead of a generic small business loan.
Q. Can a new graduate dentist or physician qualify for a practice acquisition loan?
A. Yes. Specialty healthcare lenders routinely finance new graduates buying their first practice with 0-10% down on SBA 7(a). The underwriting focuses on the practice cash flow and your specialty board status more than personal balance sheet. Student loan debt is factored in but rarely disqualifying on its own.
Q. How long does a practice acquisition loan take to close?
A. Plan on 60-90 days from application to funding on a clean SBA 7(a) practice acquisition. The slowest pieces are the practice valuation, the commercial appraisal if real estate is included, and the franchise tax and lien searches. Equipment financing on standalone device purchases is faster, usually 3-7 business days. Working capital and AR lines fund same-day to 3 days for qualified applicants. Realistic expectations on speed are covered in our same-day funding piece.
Q. Is this different from financing a medical spa?
A. Yes, materially. Medical spas are cash-pay or hybrid cash and aesthetic businesses, and they underwrite more like high-end retail or wellness concepts. Insurance-billing practices have predictable, contracted revenue from payers and qualify for healthcare specialty pricing that med spas do not. If you are looking for the aesthetic side, see our companion guide on medical spa financing. If you run a pharmacy, our pharmacy loans guide covers a related but distinct healthcare category.
Healthcare practice financing rewards owners who pick the right structure for the right transaction. A practice acquisition is an SBA 7(a) story. A specialty equipment add is an equipment finance story. A reimbursement-gap problem is an AR or line of credit story. Stacking them correctly, with a lender that prices the healthcare risk profile honestly, can save you tens of thousands of dollars per year. If you are buying a practice, buying in as a partner, or upgrading the technology that defines your standard of care, apply in 3 minutes with a soft credit pull. Find out More.