Funding for dental practices

How the money moves

Revenue arrives three ways: patient payments at the visit (card), insurance reimbursement weeks later, and third-party patient financing that pays the practice within days for a dealer fee. Costs: staff paid biweekly, lab fees monthly, supplies, and large periodic equipment purchases. Hiring an associate creates a months-long gap between salary and credentialed, collected production.

Two worked scenarios

Scenario A: a new operatory with a chair, delivery unit, and digital sensor

A hypothetical $85,000 package on a practice or equipment loan over 7 years at a hypothetical 9% costs about $1,370 a month, secured by the equipment. An advance for that amount (hypothetical 1.28 factor, 3% fee, 40 weeks) would cost $26,350 and debit $2,720 weekly.

Scenario B: a payer changes its claims system and reimbursement slips 45 days

$70,000 of claims are delayed. A line secured by receivables, arranged before the disruption, bridges it for a few hundred dollars in interest. Medical-receivables financing is a specialized alternative; an advance is the expensive last resort.

Hypothetical numbers, labeled as illustrations; not quotes.

What fits what

Questions specific to this business

• Does the practice lender include working capital and build-out with the equipment in one facility?
• What is my average days-in-AR by payer, and which payers are slowest?
• Does patient financing pay within days, and what is the dealer fee by plan?
• Will a UCC lien from an advance conflict with an existing practice loan’s covenants?

Common questions