Weststone Lending explains what shapes the rate and term on an Elyria, Ohio dental practice loan: six drivers, practice loan options, what dental financing means, financing a practice purchase, purchase loan terms and the seller's production, the records that shape an offer, oral surgery equipment, a worked term comparison and Lorain County, OH dental office figures.
The Short Answer: Six Drivers Shape the Rate and Term
- Production and collections: how much the practice bills and actually collects, and how steady that is.
- The dentist's credit and experience: personal credit, years in practice, and any prior ownership.
- Collateral: equipment, the practice's assets, and any personal guarantee.
- Purpose: equipment, a build-out, a buy-in or a full purchase.
- Loan size relative to the practice's cash flow.
- Term: longer terms lower the payment and raise the total cost.
No rate is quoted here; only a partner's written offer sets one. These six are what a partner weighs when it sets it.
Dental Practice Loan Options and How Each Is Priced
Equipment loans for scanners, chairs and imaging are secured by the equipment and priced on its value and life. Term loans for build-outs and purchases are priced on the practice's cash flow and the collateral behind them. Lines of credit for lab bills and payroll are priced on the practice's receivables and the owner's credit. The dental office page covers each.
Comparing two offers means comparing the same purpose, amount and term; otherwise the rates are not measuring the same thing.
What Is Dental Financing? Practice Loans, Not Patient Plans
Dental financing can mean two different things. For a practice owner, it means business loans for the practice: equipment, build-outs, buy-ins and purchases. For patients, it can mean payment plans for treatment. This article, and Weststone, deal only with the first.
Patient payment plans are arranged by the practice with third-party providers, separate from the practice's own financing.
How to Finance a Dental Practice Purchase When the Seller Stays On
A practice purchase is financed with buyer equity, sometimes a seller note, and a term loan, as the acquisition guide describes. When the selling dentist stays on for a transition, patient relationships pass more smoothly, and a partner reading the deal may treat the purchase as less risky.
The transition agreement (how long the seller stays, in what role, and how they are paid) belongs in the request.
Dental Practice Purchase Loan Terms and the Seller's Production
A partner sets a purchase loan's terms largely from the seller's production and collections over several years, the active patient count, the payer mix and the overhead. A practice with steady collections and a healthy margin supports a larger loan and longer term than one whose collections have fallen.
The price itself matters: a purchase priced well above what the practice's cash flow can carry will be reshaped by the partner, through a smaller loan, a larger seller note or more equity.
How to Get a Dental Practice Loan: Records That Shape the Offer
- Production and collections reports by provider and by year.
- Accounts receivable aging and payer mix.
- Business and personal tax returns.
- The dentist's personal financial statement.
- For a purchase: the agreement, valuation, active patient count and lease.
- For equipment: quotes and service contracts.
Clean, consistent records narrow a partner's uncertainty, and uncertainty is part of what a rate prices.
Equipment for Oral Surgery and Implant Work
Oral surgery and implant work brings specialized equipment: surgical motors and handpieces, cone-beam imaging, sedation monitoring, and surgical suite build-outs with their own ventilation and plumbing. These are larger purchases with specialized resale markets.
Equipment financing fits the devices; a term loan fits the suite. A partner reads the referral base and procedure volume behind the purchase.
Illustration: How Term Length Changes the Payment
Illustration only, invented figures: a $420,000 practice purchase loan at an invented annual rate of 8% costs about $6,546 a month over 84 months and about $5,096 a month over 120 months. Total payments are about $549,882 and $611,491 (our arithmetic).
The longer term lowers the payment by about $1,450 a month and adds about $61,609 in total cost (our arithmetic). A partner may also price the longer term differently. Run your own numbers on the payment calculator.
Lorain County, OH Dental Offices With Fewer Than Five Employees
Lorain County, OH had 95 offices of dentists with employees in 2023, with 756 employees and $44.5 million in payroll; 23 of them, 24.2%, had fewer than five employees (County Business Patterns 2023). Dental offices listing ZIP 44035, where Weststone's office sits, numbered 22 (ZIP Code Business Patterns 2023). Nonemployer Statistics separately counted 21 dental offices without paid employees in 2024 (Nonemployer Statistics 2024).
The Elyria, OH page sets out other county health care figures.
Checklist Before Comparing Two Dental Loan Offers
- Same purpose, amount and term on both offers.
- Rate, and whether it is fixed or variable.
- Every fee, added to the payments for a total cost.
- Collateral and personal guarantee.
- Prepayment terms.
- Covenants, such as minimum cash balances or limits on other debt.
By Weststone Lending · Updated
