This article explains how dentists in Loveland, Colorado finance buying an existing practice. It covers Larimer County, CO dentist counts (209 offices in 2023), the steps from letter of intent to closing, a purchase worked with invented numbers, seller notes and transitions, equipment financing after the purchase and early working capital.
The Short Answer: Collections Pay the Loan
A practice acquisition loan is sized against what the practice collects, after the buyer's own pay and expenses. A partner reads the seller's collections history, the active patient count and the buyer's production record, then sets the loan beside the buyer's cash and any seller note. A term loan carries the purchase; equipment financing carries upgrades; working capital carries the first payrolls.
Keeping the three apart stops the acquisition loan from swelling with costs that have their own shorter lives.
Dental Practice Acquisition Loans and Larimer County, CO Dentist Counts
County Business Patterns counted 209 offices of dentists with paid employees in Larimer County, CO in 2023, with 1,464 employees and $82.7 million in payroll; 37.8% had fewer than five employees (Census County Business Patterns 2023). Nonemployer Statistics counted 57 dental offices without paid employees for 2024 (Census Nonemployer Statistics 2024).
The dental office page covers operatories, imaging and de novo offices.
Letter of Intent to Closing: The Steps of a Practice Purchase
- Valuation of the practice by an appraiser or practice-sales advisor who specializes in dental sales.
- A letter of intent setting price, terms and the transition period.
- Due diligence: collections, patient counts, payer contracts, equipment and lease.
- Financing: the funding request with the seller's records and the buyer's.
- The purchase agreement, lease assignment and transition plan.
- Closing, with licenses and payer credentials moved to the buyer.
A Practice Purchase Worked With Invented Numbers
Illustration only, invented figures: a practice collecting $1,150,000 a year sells for $840,000. The buyer brings $84,000, the seller carries a $120,000 note, and the remaining $636,000 is a term loan (our arithmetic). Over 120 months at an invented 8.25% annual rate, the loan payment is about $7,801 a month; the note at an invented 6% over 60 months adds about $2,320 (our arithmetic).
| Source | Invented figure |
|---|---|
| Buyer's cash | $84,000 |
| Seller note | $120,000 |
| Term loan (our arithmetic) | $636,000 |
| Purchase price | $840,000 |
| Monthly loan + note payments (our arithmetic) | $10,121 |
A partner sets that combined payment against the practice's collections after the buyer's compensation, staff and overhead.
Payer Contracts and Credentialing After Closing
A dental practice's insurance contracts are made with the provider, and they do not always move to a buyer automatically. The buyer may need to be credentialed with each plan before claims under the buyer's name are paid, and that process can take weeks. A partner will ask how the buyer plans to bill during that period, whether under the seller's credentials for a transition or by holding claims until credentialing is done.
Building that delay into the first-months cash plan prevents a gap between the payroll the practice must meet and the claims it can collect. Patient payments at the chair continue through the change, so the self-pay share of collections matters more than usual in those weeks.
Seller Transitions and Notes
A seller who stays for a transition, introducing the buyer to patients and staff, makes it more likely patients stay. A seller note shows confidence too, since the seller is paid only if the practice keeps performing. A partner may require that the note sit behind its loan, so read the order of payment in both documents.
Dental Practice Equipment Financing After the Purchase
Equipment that comes with the practice may be near the end of its life. Illustration only, invented figures: replacing chairs and adding digital imaging for $96,000 soon after closing, over 72 months at an invented 8.5% annual rate, costs about $1,707 a month (our arithmetic). Financing it separately keeps the acquisition loan smaller and ties each payment to its own equipment.
Working Capital for the First Months of Ownership
When a seller keeps the receivables, the buyer starts with none and pays the first payrolls before its own collections arrive. Illustration only, invented figures: $75,000 of working capital or a line bridges those weeks; the real amount depends on payroll and collection timing. A partner will want the buyer's projection of collections in the first quarter.
Papers a Dental Practice Buyer Assembles
- The seller's collections, production and tax returns for recent years.
- Active patient counts and payer mix.
- The letter of intent and the draft purchase agreement.
- The buyer's production history and personal financial statement.
- The office lease, plus the landlord's written approval to transfer it to you.
- An equipment list with ages.
Call (970) 238-5212 or send the request form when the letter of intent is drafted.
By Rowanrun Business Loans · Updated
