Explained: The Different Types of Commercial Finance Available to Dentists

Understanding your options before you buy or invest in a practice

Whether you’re buying your first dental practice, expanding your business, or looking to invest in new equipment, chances are you’ll need some form of commercial finance to make it happen.

But not all finance is created equal. Choosing the right type of borrowing can affect everything from your monthly cashflow to your tax efficiency and long-term growth.

At FTA Finance, we specialise in securing tailored funding for dentists. Here’s a breakdown of the key types of commercial finance available to dental professionals, and when to consider each.

1. Acquisition Finance (Practice Goodwill Purchase Loans)

Used to fund the purchase of an existing dental practice.

✅ Ideal for:

• First-time buyers
• Associates looking to become owners
• Principals buying a second site

Key features:

• Up to 100% finance potentially available
• Terms up to 20 years for Goodwill
• Capital Holiday (interest only) potentially available

This is the most common form of dental lending and where working with a sector-specific broker gives you a real advantage.

2. Asset Finance

Used to fund the purchase of equipment, digital systems, or fit-out work while spreading the cost.

✅ Ideal for:

• New chairs, scanners, or digital X-rays
• Practice refurbishments
• IT infrastructure and software systems

Key features:

• Flexible terms from 1–7 years
• May include tax advantages (via leasing or hire purchase)
• Keeps cashflow intact for other investments

A smart way to modernise without eating into your reserves.

3. Working Capital Loans

Short-term finance to boost cashflow and help with day-to-day operations or unexpected costs.

✅ Ideal for:

• Managing payroll during quiet periods
• Covering tax bills or supplier payments
• Supporting marketing or business growth

Key features:

• Shorter terms (typically 6–36 months)
• Quick approval and access to funds
• Often unsecured

Good for smoothing bumps in the road or seizing quick opportunities.

4. Refinance Loans

Used to restructure or consolidate existing debt into a more manageable or cost-effective package.

✅ Ideal for:

• Reducing monthly repayments
• Freeing up equity for reinvestment
• Tidying up historic or expensive loans

Key features:

• Can combine multiple loans into one
• Potentially lower interest rates
• Improves clarity and control over your finances

Often overlooked, but incredibly useful, especially as rates shift or your situation changes.

5. Commercial Mortgages

Used to purchase the freehold of your practice premises, rather than leasing.

✅ Ideal for:

• Long-term security of tenure
• Building a property asset alongside your business
• Avoiding rent increases or landlord issues

Key features:

• Up to 100% loan-to-value
• Terms up to 25 years

A big step but a valuable one if you plan to stay long-term.

Choosing the right mix

Most practice purchases involve a blend of these funding types. For example, you might need:

• Acquisition finance for the goodwill
• Asset finance for new equipment
• Working capital for initial running costs

Why work with FTA Finance?

As an independent broker specialising in the dental sector, we:

✅ Access the full market,  not just one lender
✅ Understand what lenders look for in dental borrowers
✅ Build tailored, flexible finance packages around your goals
✅ Make the process faster, clearer, and less stressful

Thinking about buying, investing, or restructuring?

Speak to us today and let’s find the right funding mix for your practice and your future.