Verify active patients, payer mix quality, equipment condition, and key-person risk before committing to a dental practice acquisition.
Find Dental Practice Acquisition TargetsAcquiring a dental practice requires validating recurring revenue through active patient metrics, reconciling production against collections, and assessing how dependent the practice is on the selling dentist. With collections typically ranging $500K–$3M and EBITDA multiples of 3.5–6.5x, disciplined due diligence protects your investment and financing.
Validate that reported collections are real, recurring, and sustainable without the selling dentist.
Pull 36 months of production and collections reports from the practice management software. Identify write-offs, adjustments, and collection gaps exceeding 5% of gross production.
Break down revenue by PPO, fee-for-service, Medicaid, and HMO. Flag practices where Medicaid exceeds 30% of collections due to reimbursement risk and patient churn exposure.
Analyze AR aging buckets. Receivables beyond 90 days exceeding 15% of monthly collections signal billing problems or insurance credentialing issues requiring immediate resolution.
Confirm the practice has a loyal, active patient base and functioning recall systems that survive ownership transition.
Request a report of patients seen within the trailing 18 months from Dentrix, Eaglesoft, or equivalent. Confirm minimum 800–1,200 active patients and review 24-month trend for attrition signals.
Calculate the percentage of active patients completing scheduled hygiene visits. Recall rates below 65% indicate weak systems and future revenue risk post-transition.
Determine what percentage of collections the selling dentist personally produces. Sole-producer practices above 85% require a structured 12–24 month transition employment agreement minimum.
Assess capital expenditure requirements, regulatory standing, and workforce stability before finalizing deal terms.
Document age and condition of chairs, digital X-ray systems, CBCT units, and sterilization equipment. Flag deferred capex exceeding $50K as a purchase price reduction or seller-funded credit.
Confirm DEA registration, state dental board licenses, and all insurance provider credentialing are current and transferable. Lapses can delay revenue post-close by 60–120 days.
Review employment agreements, tenure, compensation, and non-compete status for hygienists, assistants, and front-office staff. Hygienist turnover post-close is the leading cause of near-term revenue disruption.
Verify the Dental Practice acquisition qualifies for SBA financing, the purchase price is supportable by the verified cash flow, and the deal structure protects the buyer's downside.
Confirm the Dental Practice meets SBA 7(a) eligibility requirements: the business is for-profit, U.S.-based, within SBA size standards, and the buyer meets personal financial requirements. Some industries have specific SBA restrictions — verify before LOI.
Model verified normalized EBITDA against projected SBA loan payments at current rates. A $1M SBA 7(a) loan at 10.5% over 10 years costs approximately $13,000/month. The Dental Practice must generate at least 1.25x debt service coverage after a market-rate manager salary to pass underwriting.
Confirm the seller note is properly subordinated to the SBA loan and goes on 24-month standby as required by SBA rules. If an earnout is included, define exact measurement metrics, time period, and dispute resolution process before signing the purchase agreement.
Before signing a Letter of Intent, request these documents from the seller. Missing or incomplete items are a red flag — not a reason to proceed without them.
Request a timestamped active patient report directly from the practice management software showing patients seen within 18 months. Cross-reference against hygiene appointment records and new patient logs to validate the number independently.
Avoid practices where Medicaid or HMO plans exceed 30% of collections. These payers reimburse at 40–60% of fee-schedule rates, compress margins, and create patient churn risk that threatens post-acquisition revenue stability.
When the selling dentist produces 85%+ of collections, buyers apply valuation discounts of 0.5–1.0x EBITDA multiple and require 12–24 month transition agreements. Associate presence meaningfully reduces this risk and supports higher multiples.
Yes. Dental practices are among the strongest SBA 7(a) eligible businesses. Most buyers finance 70–90% via SBA loan with 10% equity injection, often combined with 10–20% seller carry over 3–5 years to bridge any valuation gap.
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