How much deposit do you need to buy a dental practice?
The short version
- Plan for a deposit of roughly 10 to 30 per cent of the price as an indicative range, confirmed case by case.
- Strong buyers and strongly profitable practices can sometimes secure a higher loan to value, occasionally up to or near 100 per cent against the right deal.
- The deposit is only one test: a lender also checks that the practice profit covers the repayment comfortably.
- We are an arranger and introducer, not a lender, and we place deposits and structures with the funders most comfortable with dental cases.
The deposit is usually the first question an associate asks, because it is the cash you have to find yourself. The honest answer is that it depends on the practice and on you, but there is a sensible range to plan around, and a few ways to strengthen your position.
This guide sits under our pillar on financing a dental practice, and pairs with our guide on how much it costs to buy a practice.
The deposit range you should plan for
As an indicative planning range, expect to put in somewhere between 10 and 30 per cent of the purchase price. The exact figure depends on the lender's view of the practice and of you as a buyer. Some lenders will lend more against a strongly profitable practice and an experienced dentist, and in the right circumstances the loan to value can reach the top of the range or beyond.
These are planning figures, not a quote. The actual number comes out of the practice accounts and your own earning record.
Can you borrow close to the full price?
Sometimes. A few specialist healthcare lenders will consider very high loan to value, occasionally up to or near 100 per cent, where the practice is strongly profitable and the buyer is a credible dentist. It is not the norm, and it usually depends on additional comfort, such as extra security or a particularly strong profit picture.
A high loan to value is something you earn with profit and track record, not something you start with.
The trade-off is that borrowing more raises the monthly repayment, which the practice still has to cover. So even where a small deposit is possible, the affordability test does not go away.
The other test: does the profit cover the repayment?
Even with a healthy deposit, a lender will only proceed if the practice profit comfortably covers the loan repayment. This is the affordability test, and it often matters more than the deposit itself. A practice can be worth a high price and still be a difficult lend if its profit is thin relative to the repayment.
| What you might assume | What the lender actually checks |
|---|---|
| A bigger deposit guarantees approval | Profit must cover the repayment with headroom |
| The asking price sets the loan | The valuation, not the asking price, sets the loan |
| Any dentist gets the same terms | Your earning record and experience affect the offer |
| The deposit is the only cash needed | You also fund fees and early working capital |
Model a repayment for any price and rate with our commercial mortgage repayment calculator to see whether the practice profit gives you room.
What counts toward your deposit
The deposit usually comes from personal savings, but lenders may consider other sources too. Getting this evidenced early makes the application cleaner.
Sources lenders commonly consider
- Personal cash savings, fully evidenced
- Equity released from another property, where appropriate and affordable
- Family support, subject to the lender's rules on gifted or loaned funds
- Proceeds from selling an existing stake in a practice
When you are ready, our dental practice finance page explains how we place the deposit and the loan, and the associate-specific points are in dental associate to practice owner.