Dental Practice
Finance

1. Indication of approximate affordability or practice size - We analyse your assets & liabilities to provide you with a theoretical budget to use when shopping for practices.
2. Practice loan stress testing – We can assess practices for you, to not only check they are affordable or viable, but find out what buying this practice would mean for you personally. We’ll give you an idea of the deposit required, the potential drawings after loan repayments, and the level of clinical work you would need to carry out at the practice to maintain your earnings.
3. Tailored bank proposal - Once your offer is accepted, we’ll tailor a lending proposal for the banks to ensure you get the most competitive terms. In our experience approaching the lenders via a broker will offer you the best chance of securing the best possible interest rates available as we have daily insight on the terms being offered by different banks from different relationship managers. Further, banks know that if they are getting the deal from DE Finance, they always have competition!
4. Managing the transaction – We will work with the lender to make sure they have everything they need in order to provide the funds. We act as a lynchpin between yourselves, the bank and your solicitor to keep the transaction on track.

If you’d like an indication of how much a lender would be willing to lend to you, please feel free to fill out our quick finance assessment form here: As soon as it’s completed, we’ll get an email to notify us and aim to provide you with an affordability report the same day.

This is based on the serviceability of the business. The general rule of thumb is, that if you purchased a practice under £500k we would expect the deposit to be approximately 10%, over £500k - 20% and it can be up to 30% for a Private practice. However, this is not a hard and fast rule, and for the right practice and the right situation, a lender may offer 100% lending if there is enough security to support in the background. It is also worth bearing in mind that if the business is strong enough to sustain the debt of the freehold, we can normally secure this element of the loan at 100%. Here’s a guideline that in our experience, we’ve found to be consistent.  

NHS/Mixed:

• £500K – 10% Contribution
• £500K – 20% Contribution

Fully Private:

Any Value - 10-25% Contribution Your deposit could potentially be a blend of cash and security, providing you have property with enough lending value available for a second charge. In theory, with enough security, you could reduce your cash input to 0%, allowing you to borrow with 100% lending.

Not necessarily. In most cases, there will be an unsecured option available to you as a buyer when seeking bank funding. However, using a property as security can be an effective way to reduce your cash input on a contribution. Theoretically, an NHS practice worth £750K would require a 20% contribution of £150,000. Hypothetically, if the buyer has £75,000 in cash available (10%) but also has a property with lending value of £75,000 (10%), the two can be combined to form a 20% contribution overall and fit the banks’ lending criteria. Having a reduced cash contribution can be a great way to allow for future improvements in the practice, improve cash flow, or to even help preserve your funds for your next acquisition.

Though there are a few options, typically, lending for the goodwill of a dental practice is done over 10-15 years. In terms of funds for the dental practice freehold, this is usually lent over 25 years

No! Dental Elite operates DE Finance independently to the core practice sales division. DE Finance’s core focus is on negotiating dental practice finance for buyers seeking to acquire a dental surgery not only through Dental Elite but also through other agents or without any agent at all.

On any bank funded transaction, a buyer would be required to instruct an independent bank valuation on the practice. The cost for this can range from £750 to £3,000, ex VAT. Typically, your lender will present you with a few options from independent RICS valuers asked to quote for the business. If using any property as security, you will likely incur additional legal costs to have a second charge taken over the property; the cost of this depends on your solicitor but would likely be between £1,000 and £3,000. Further, some banks will insist on a third-party solicitor to represent their interest which will also come at a price! All of these fees need to be factored into deciding the best overall lending proposal – deciding purely based on interest rate could lead to a poor decision.

We’ve found that most lenders tend to divide their pricing into levels of borrowing: £0-£250k, £250k-£500k, £500K-£1M and then £1M+. Although pricing varies from lender to lender, typically, the more you borrow, the lower the margin tends to be with the £1M+ bracket offering the lowest margin. As you might imagine these fluctuate all the time across all the banks.

95% of the time NO! - This is as our fee is typically taken from the bank’s arrangement fee which you would have paid anyway if you had approached them without a broker. Our other add-on services; the affordability assessment, the stress testing, bank proposal and transaction management is at no extra cost to you.

Although there are a few key variables that might dictate the pace, (e.g. lease, CQC application), the average transaction lasts between 6 and 9 months.

The lenders on our panel are made up of the specialist healthcare divisions of the usual high street lenders, with some challenger banks involved as well. Our contacts have been working on healthcare lending, financing dental cases for many years, developing strong relationships with their underwriters. Making sure you have the right bank manager championing your application for funding is a crucial part of buying a dental practice. As the old adage goes: ‘it’s not what you know, it’s who you know’.