older male dentist in foreground with younger female dentsit and a patient in the background

Financing an Ownership Transition

As the owner of your dental practice, retirement doesn’t just mean leaving your day job; it also means you’re leaving a business you worked hard to build up. If you recall the early days of being a business owner, financing played a major role in helping you successfully grow your practice. The same can be true when you’re getting ready to sell.

Types of Financing for an Ownership Transition

Long term succession planning helps you determine how you’re going to transition ownership of your practice, whether it’s selling to a relative, business partner or another individual. The type of sale will determine what type of financing will be needed. Some common ownership transition financing options include:

  • Bank Financing – Depending on your scenario, banks can offer loans to the buyer or to the practice to fund an ownership transition. If the loan is made to your dental practice, it means the practice takes on the risk involved with the ownership change, rather than the dentist buying in or buying you out. 
  • Seller Financing – If the purchase is completed using seller financing, you – the owner of the practice – are providing a loan to the purchaser. In most cases, the buyer will make a down payment, and continue to make regular payments at an agreed-upon interest rate.
  • Combination – You and your buyer may agree on a combined approach, with partial seller financing and partial bank financing.

Involve Your Financial Partners Early

No matter which financing options you and your buyer agree on, make sure you have the right advisors involved early on to help. Any business succession involves a number of advisors to ensure the transition process runs smoothly, and a good banking partner can help you understand the pros and cons of each option for your situation, as well as any impacts to your dental practice.

When it comes time to finance your ownership transition, the Business Banking team at Bankers Trust can help. Contact us to learn more.



0218-03 | Dental Program | Bankers Trust