How much to buy a dental practice has two answers, and the asking price is neither of them. The first is the cash the buyer must have on the day: their share of the price plus working capital plus closing costs. The second is the payment every month on the notes that funded the rest. A buyer who knows only the price knows neither, and a lender will ask for both in the first meeting. The acquisition cost calculator on this site returns both from the buyer's own figures; this page explains what goes in.
The cash on the day
On the worked example a $450,000 price is funded 80% by an SBA 7(a) note and 10% by a seller note, leaving $45,000 of the buyer's cash on the price. Working capital of $40,000 carries payroll, rent and supplies until collections clear, and closing costs of $25,000 cover the lender, the attorney, the valuation and licences. The cash at the keys is $110,000.
The payment every month
The SBA note of $360,000 at 10.5% over 10 years costs $4,857.66 a month, and the seller note of $45,000 at 6% over 5 years costs $869.98. Together $5,727.64 a month and $68,731.68 a year leave the practice before the buyer is paid. The program allows a maximum loan of $5 million, so the size of the practice changes the figures but not the arithmetic.
Whether the practice can pay it
Earnings after the buyer's own pay must cover the notes. $180,000 of seller's discretionary earnings less $90,000 of pay is $90,000, 131% of the year's debt service, leaving $21,268.32. Enter your own practice's earnings and pay and the sheet shows whether the purchase funds itself or funds the seller.
Questions people ask about how much to buy a dental practice
Why is working capital part of the cost?
Because collections lag production and payroll does not. The first weeks are paid from the buyer's pocket, and a stack that ignores that is short on day one.
Can I lower the cash at the keys?
Raise the seller note or the bank's share. Each lowers the cash today and raises the payment every month; the sheet shows the trade instantly.
Does Keysvo keep the sheet?
Pro keeps every stack you cost beside its target, so the offer you make is the one you worked, for $14 a month.