How new dentists can improve their financing applications

By | December 2, 2019

Couple discusses moneyFirst-time dental practice owners often have great ideas and a willingness to work hard. These are wonderful attributes because opening a dental practice and maintaining it is a big undertaking.

One of the primary steps to ownership is obtaining financing, traditionally from a bank.

In most cases, lenders prefer to see a dentist with clinical experience prior to purchasing a practice. At BMO Harris, we typically look for two to three years of demonstrated experience as a practicing dentist.

First-time practice owners often must submit a business plan with their loan application, one that includes a strong financial section. A thorough plan helps demonstrate that dentists have financial stability, along with a strategy for running the practice.

The core elements of a business plan include:

  • Description of the practice.
  • Management and staffing plan.
  • Description of patient base.
  • Description of services/pricing.
  • Operational plan.
  • Financial data.

The last section, financial data, is perhaps the most important element of the business plan and should include the following: startup and operating budgets, balance sheet, forecasted income and forecasted cash flows.

To see a full sample business plan, download our complimentary business plan toolkit at

In reviewing the plan, the bank will be looking to ascertain whether the loan amount requested will cover the entire need, how the money will be used, how the practice will operate and the expected cash flow.

Dentists will want to show there is cash flow sufficient to cover day-to-day operations, interest and principal payments.

Ultimately, a strong business plan is central to a complete loan package and can serve as a source of added confidence as you prepare your financing application.

Editor’s note: This article is provided by BMO Harris Bank, the ADA Member Advantage-endorsed provider for practice financing. Call 1-833-276-6017 or visit for more information.

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