Talk to a commercial real estate broker to help determine leasing or buying costs for a potential space. Get an idea of what your monthly rent or property payment will be before you apply for your loan. While you can search for a property simultaneously, we strongly recommend that you have financing in place prior to signing a lease. You will not need to have a contingency making you a stronger tenant. You will also not be committed to a lease while worrying about financing which gives you time to shop and negotiate the best pricing for your loan.

Talk to IT and dental equipment specialists to determine estimated costs. You will want to have a solid idea of what your costs will be to equip 3 operatories from the start for a single practitioner office. Most lenders look to have at least 3 equipped operatories for dental start-up loans. While having the most modern technology is ideal, look for what you absolutely need at the start: base line model chairs, basic imaging, cabinets can be custom built with the features you need through your general contractor for a fraction of the price, etc.

Find realistic, current construction costs in your area. Everyone on DentalTown likes to brag about how they got their dental office built for $125/square foot. This is often from years ago in an area that did not have high demand for construction. It might not have included cabinetry or the type of flooring you want. You are better off to try to get an idea from a few builders in your area either by phone or an inquiry form. Those that get back to you and can give you some solid information are the type of builders you should consider when you are ready to do your build out.

Consider additional costs: marketing, signage, practice management, website design, hiring costs, consultants, insurance required by the lender, landlord and bank, and other professionals like a CPA and an attorney for lease review. A few of these costs may be spread out over several months including after you are open. Some banks will have a separate category for these items to be included. Other banks have you pay this out of your working capital. You may find that these soft costs will be out of pocket expenses depending on your equipment and construction costs.


Create realistic cash flow projections for the first three years. Consider utilities, staffing, dues, insurance, continuing education, number of days that you are working. Many banks have a cash flow worksheet that you can use.

Do a demographic study to show an area’s potential for a practice. A solid demographic study will help you find the competition in the area for your type of practice, calculate the viability of an area for a new dental practice, provide the dental spending in the area, show the percentage of the population that goes to the dentist, and provide detailed information about the population living around the area in addition to the general demographic data. You will need demographic information and competition information for most lenders. For the most up-to-date information visit: https://thedenaligroup.net/dental-demographics/

Consult with your CPA and attorney to determine the best kind of entity to establish for your location. Create an entity with the Secretary of State and obtain an employer identification number for the Internal Revenue Service https://www.irs.gov/businesses/small-businesses-self-employed/how-to-apply-for-an-ein. You can add an assumed name or doing business as name to your entity later if you so choose. Your CPA or attorney could also do this for you if you would rather pay to have it completed.

Create a business plan. This should include your entity information, your background, the type of office you will be opening, professionals on your team, market research and demographics, operations including how you will staff the office, general job duties and how you will run the office, cashflows for the first three years, and marketing plan.

Determine how much you want to borrow based on your research: construction costs, equipment, professionals to hire (attorney for lease review, practice management assistance, web page designer), marketing, and working capital. If you have negotiated a tenant improvement allowance, keep in mind the timing of when you receive it. You may have to cover some costs and reimburse yourself later from your tenant improvement allowance.

Order a copy of your credit report so you have no surprises before applying. Verify that the information is accurate. If there are any late payments, try to dispute them.

Make sure any student loans are income adjusted if possible. (You can always pay more but limiting your monthly debt helps your score and your borrowing power.)


Remember to include all assets – cars, life insurance policies with cash value, retirement and 401K funds, expensive art, expensive technology lumped together, etc.

Include management experience that you have including associate positions. You likely lead or manage a team that works with you even if you don’t run the office.

Make sure to include your business plan and cash flow projections for the first three years.

Apply with at least three financial institutions within a few days of each other so you have fewer credit hits. Having a few offers from lenders may allow you to negotiate some of the terms. It will definitely help you pick the best loan for you.


Review offers and do an apples-to-apples comparison.

Look at repayment terms. Is there flexibility on the first few years of repayment? When does repayment start? Do you have enough time to get built out and open? Is the payment stretched out enough to give you lower manageable payments?

What is the cost? Consider the interest rate while the loan is being drawn and when it is being paid back. Are there additional fees?

What is the amount? Is it what you need to open or relocate?

When do you receive the working capital?

Are there any restrictions on how the money can be used? Examples that are common: minimums or limits for construction or equipment, maximum number of reimbursements from the loan to you, maximum dollar amount that can be reimbursed directly to you.
Research the different institutions to see how easy they are to work with: will they adjust categories or the amount if needed? Will they extend your draw period if issues occur?


Once you have reviewed the offers, it will be time to make the final decision. Consider which loan handles your biggest concern. If the terms aren’t quite where you would like them, ask for the terms you need – longer term with the same rate to lower the payment, lower interest rate to get the payment lower, waive a fee if you bank there, etc. While rate and cost are the big drivers, we often find that the amount of the approval is the biggest driver. While a half a percent can sound like a lot, not having enough money will be more devastating in the end.