If you are planning to buy a dental practice, one of the first financial questions that comes up is how much money you will need for a down payment. It is a natural concern. Most dentists have already invested heavily in school, are managing student loans, and are trying to balance the desire for ownership with the reality of cash flow. The good news is that dentists are viewed very favorably by lenders, which means the path to practice ownership is often more flexible with a dental office loan than people realize.
Understanding down payment expectations helps you prepare early, avoid surprises, and negotiate stronger terms. Whether you are buying an existing practice or opening a brand new office, knowing what lenders look for can make the entire process feel more manageable.
In this guide, we break down typical down payment ranges, how lenders evaluate dentists, and share expert advice on what you can do to position yourself for the best possible financing.
Typical Down Payment Requirements For Dentists
Dentists are considered low-risk borrowers, and banks know that dental practices have strong cash flow and stable patient demand. This is why down payments for dental practice loans tend to be much lower than in other industries.
For most dentists, the typical range looks like this:
For established practice acquisitions, down payments often fall between 0 – 10%. Several national lenders offer zero down financing for qualified buyers if the practice has healthy financials and you have a strong production history. When lenders can clearly see that the business will support loan payments from day one, they are more flexible.
For startups, expansions, or full buildouts, the range is usually 10 – 20%. New practices carry more uncertainty because there is no existing patient flow, so the bank asks the dentist to contribute more equity. Your credit, liquidity, and clinical track record all influence exactly where you land in this range.
How SBA Loans Compare
Many first-time buyers wonder if SBA loans reduce the down payment. It is a reasonable question, since SBA financing is often marketed to small business owners who need support getting started. However, for dental practices, SBA loans typically do not offer the lowest down payment option.
SBA 7(a) loans usually require around 10% down for acquisitions and can require 10% – 20% down for startups. While they offer flexibility for borrowers with weaker credit or lower liquidity, they often come with higher fees and more documentation.
Conventional dental lenders (banks and financial institutions with dedicated healthcare lending teams) tend to offer much better down payment terms because they specialize in the dental industry and understand its stability. This is why most dentists choose a conventional dental practice loan over an SBA loan when they qualify for both.
What Lenders Look At Before Deciding Your Down Payment
Even though most dentists qualify for favorable terms, lenders still evaluate several key areas before determining how much down payment they require.
- Your clinical and production history matters a great deal. Lenders want to see consistent, verifiable production that shows you can generate enough revenue to comfortably support loan payments.
- Your personal liquidity also plays an important role. Banks like to see enough savings to cover a few months of operating expenses and to cushion any early cash flow fluctuations. Demonstrating financial stability gives banks confidence and can reduce the required down payment.
- Your credit profile is another major factor. A high credit score, clean payment history, and manageable debt load all work in your favor. If there are issues on your credit report, lenders may compensate by asking for a higher down payment.
- The strength of the practice you are buying affects your equity requirement as well. Practices with healthy collections, solid patient retention, and controlled overhead are more attractive to lenders. A strong practice often leads to a lower down payment because the bank sees the loan as safer.
- If the practice needs major renovations, new equipment, or a full technology upgrade, lenders may require more equity to offset the added project risk. Understanding these factors ahead of time helps you prepare and present yourself more effectively.
How To Prepare Your Finances Before Applying
Positioning yourself well before meeting with lenders can significantly improve both your approval odds and your loan terms. It also helps you avoid feeling rushed or overwhelmed during the underwriting process.
Start by strengthening your credit. Pay down revolving balances, avoid new debt, and clean up any errors on your credit report. Small improvements in your credit score can make a meaningful difference in how lenders view your application.
Next, build up your liquid savings. Setting aside cash consistently shows lenders that you are disciplined and financially responsible. Even if you qualify for zero down payment, having reserves gives you more stability once you take over the practice.
Make sure you have clear documentation of your production. Lenders want to see consistent clinical output, and having your numbers organized shows professionalism and readiness for ownership.
Review your current debt obligations, especially your student loans. Sometimes adjusting repayment terms or refinancing helps present a clearer debt-to-income picture to lenders.
Finally, work with a dental CPA early in the process. A CPA who specializes in dentistry can help you organize financial documents, evaluate whether the practice is priced appropriately, prepare you for lender questions, and model cash flow scenarios. This preparation often results in more favorable loan terms.
How Your Down Payment Affects Early Cash Flow
Your down payment is not just a hurdle to get past. It has a direct impact on your day-to-day financial comfort once you become an owner. A larger down payment lowers your monthly loan payment, which can help ease the pressure during the first year. A smaller down payment preserves your cash, giving you more flexibility to invest in team members, equipment, marketing, or unexpected repairs.
There is no universal right answer. The best approach depends on your risk tolerance, the health of the practice, and your long-term goals. Running both scenarios with your CPA helps you choose the option that supports your financial stability while leaving room for growth.
Expert Insights: What Lenders Look For When Dentists Apply for Financing
If you want to hear directly from someone who evaluates dental loan applications every day, we recommend listening to our podcast with Lauren Camacho, VP of Sales from Bank of America Practice Solution.
Here are a few of the points she shares that align closely with what we see in the market:
1. Being “bankable” is an ongoing habit
Strong credit, reasonable personal debt, and consistent income make lenders more confident even before you apply.
Here’s what that could look like for a first-time buyer:
- At least one year of associate experience for general dentists, with production that shows you can replace the seller’s numbers
- Personal income north of about $150,000/ year for an associate working full-time
- A credit score of around 700 or higher, with no pattern of late or missed payments
- Total personal debt payments, including housing, student loans, car and credit cards, in the range of roughly $5,000 – $6,500 per month
2. Banks care more about your monthly obligations than your total student loan balance
Income-based repayment can be better than aggressive payoff when preparing to buy.
3. Production history matters more than most new dentists realize
Banks want evidence that you can step into the seller’s shoes and maintain (or improve) revenue.
4. Cash on hand still matters
Having cash on hand of around $40,000–$50,000 for a startup or about 7–10% of the purchase price for an acquisition is typical.
5. Cash flow drives loan structure
Many lenders now see more dentists choosing 15-year terms to preserve cash flow during growth years.
Check out our blog on How Much Does It Cost to Build a Dental Practice in 2025? for the full complete interview and more practical advice for first-time dental practice owners.
Plan Your Next Step With Virjee Consulting
Buying a dental practice is an exciting milestone, and understanding down payment expectations is a big part of feeling prepared. The more clearly you understand the numbers, the more confidently you can negotiate, plan, and move toward ownership.
If you would like help evaluating your financial readiness or comparing loan options, our team at Virjee Consulting is here to support you. We work exclusively with dentists and dental specialists, guiding them through acquisitions, valuations, tax planning, and long-term growth strategies.
Book a call with us when you are ready to take the next step. We are here to make practice ownership clearer and more achievable.
