Dental Practice Expansion & Buildout Loans
Adding two operatories, finishing a second floor, or building out a satellite location is a project-loan underwrite: existing practice cash flow supports the new debt while the expansion ramps up. Specialty dental lenders package leasehold improvements, equipment, and working capital into a single closing — faster and cheaper than running three separate loans.
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How this product is shaped.
- Combined project + equipment + WC. Single closing covers buildout draws, equipment delivery, and a working-capital reserve through ramp.
- Interest-only during buildout. Typical structure: interest-only on funded draws during construction (3–6 months), full amortization once the operatory opens.
- 10-year term standard. Project loans amortize over 10 years against the existing practice's cash flow + projected expansion contribution.
Existing-practice DSCR drives the cap
Lenders cap expansion debt against the existing practice's trailing-twelve-month DSCR, not the expansion's pro-forma. A practice with $200K of free cash flow after current debt service can typically support an additional $80–$120K/yr of new debt — translating to about $700K–$1M of new 10-year project debt, depending on rates. Push higher than that and the expansion needs to be largely self-financing or carry a partner buy-in.
Frequently asked.
- Can I finance leasehold improvements only?
- Yes — pure leasehold improvement loans exist. But bundling LHI with the equipment that goes into the new operatory simplifies servicing and often improves pricing.
- What if I'm building out a second location?
- Second-location buildouts use the existing practice's cash flow + the new location's projected contribution. Treat it like a small de-novo wrapped inside an established practice — usually a faster, cheaper underwrite than a true de-novo.
See your match.
Soft-pull first. One hard pull only with the lender you choose.