A dentist buying a practice usually finances the purchase with a term loan sized to the price less their own cash, and finances new equipment such as intraoral scanners separately on equipment terms. A buy-in works the same way for a share. County Business Patterns counted 51 dental offices with employees in Scott County, MN in 2023.
The direct answer, county figures, a worked purchase example with invented numbers, how working capital and imaging fit in, and a buyer's checklist.
The Short Answer: A Term Loan for Ownership, Equipment Terms for the Chair
Ownership and equipment are two different purchases. When a dentist buys a practice, they are buying its patient base, its staff, its location and its equipment in one transaction, and paying for the goodwill the practice has built. That fits a term loan over years. New equipment bought after closing, or a new operatory, fits equipment financing with the equipment as collateral.
An associate buying into a practice buys a share rather than the whole. The financing has the same shape: a term loan sized to the buy-in price, with the practice's financials and the associate's production as the evidence.
Scott County, MN had 51 offices of dentists with paid employees in 2023, employing 380 people with an annual payroll of about $33 million; 21 of the 51 had fewer than five employees (Census County Business Patterns).
Finance to Buy a Dental Practice When a Shakopee, MN Dental Office Needs Intraoral Scanners
A buyer who also wants to add intraoral scanners at the time of purchase has a choice: include the scanners in the purchase financing, or finance them separately. Separate equipment financing keeps the scanner's term matched to its life, which is shorter than a practice loan's.
Illustration only, invented figures: a buyer purchases a practice for $850,000 and brings $127,500 of their own cash, financing $722,500. At an annual rate of 8.25% over 10 years, the payment would be about $8,862 a month, with total interest of about $340,898 (our arithmetic). A $32,000 scanner financed separately over 48 months at 9% would add about $796 a month.
The buyer would check both payments against the practice's past collections less operating costs and a market salary for the dentist. If the numbers only work in the strongest year on record, the price or the structure needs another look.
Dental Office Working Capital Plan and Imaging Upgrades: Notes for Shakopee, MN Dental Offices
A new owner's first months often bring a dip in collections: patients adjust, insurance credentialing may need updating, and billing systems change. A dental office working capital plan for that period, through a line of credit or working capital, keeps payroll and supplies covered while collections settle.
Imaging upgrades are a separate decision. A partner reading a request that combines the purchase, the working capital and new imaging wants each piece shown on its own, with its own quote or estimate.
Planning the first-year cash flow month by month, with the loan payment, the working capital draw and the equipment payment, is the clearest way to show a partner the plan holds together.
Business Loans for Dental Practice: Operatory Cabinetry and a Practice Transition
Business loans for a dental practice transition come with standard requests from partners: three years of the practice's tax returns and collections reports, the purchase agreement, the lease or deed, an equipment list, the buyer's license and résumé, and the buyer's personal financial statement.
Operatory cabinetry is often part of a transition if the new owner plans to update rooms. If the cabinetry is built in, a partner may treat it as part of a build-out and finance it with the construction; freestanding units can go on equipment terms.
Seller involvement matters. A seller who stays for a transition period, or carries a note for part of the price, reduces the risk a partner is pricing.
An Operatory Build-Out: Where It Shows Up in a Dental Office's Funding File
An operatory build-out shows up in the funding file as a contractor's bid, an equipment quote and a timeline. The bid covers walls, plumbing, electrical and finishes; the quote covers the chair, delivery unit, light and cabinetry; the timeline shows when the room starts seeing patients.
In Shakopee, a build-out goes through the city's permit process, and the city notes that many projects require a plan review that adds to the timeline. The Shakopee zoning and building permits guide covers the steps.
Partners commonly fund construction once permits are in place. Put the expected permit date on the request.
A Buyer's Checklist Before the First Call About a Practice
Before the first call about a practice purchase, gather:
- The asking price and the seller's collections for the last three years
- The equipment list and its ages
- The lease or the property terms
- Your own cash for the purchase and your personal financial statement
- Any seller note, transition period or non-compete in the proposed terms
Call (612) 608-4508 with the asking price and the collections reports nearby. The dental office loans page covers equipment and buy-ins, and the Shakopee, MN page has local figures.
By Wheatvale Lenders · Updated
