How To Arrange Finance to Start a Dental Practice Set Up?

Setting up a dental practice is a costly proposition. In this post, we will discuss the basic rules that you must be careful of while raising and then investing money to establish your new dental practice.


Every venture in this world needs financial investment. Same is true for dentists also.  Establishing a new dental practice or expanding an existing dental practice also requires investment. However, then it gets tricky. Arranging finance is not easy, and any wrong choice can put you in a financial spot.

What After BDS

Two types of dentists will need to raise the money for a dental practice

Young or New Dentists (Who are planning to start a dental practice):

  • Every young dentist who passes out from the dental school/college has the dream to establish his/her private dental practice.
  • All of them have the aspiration to establish the best and most comfortable dental clinic where patients will just feel like home.
  • It will be a dental practice which they hope they will be proud of.
  • However, these are the hopes of a young mind.
  • In a dental college, we have the liberty to dream because it does not cost money.
  • However, the moment, a young dentist steps out into the commercial world of professional dentistry, the reality comes as a big surprise.
  • Things do not seem as smooth as the young dentist had imagined.

Experienced Dentist with few years of experience (Who are planning to expand their existing practice):

  • The goal here is developing a current dental practice.
  • Upgrade it to new & modern equipment.
  • Expanding your practice to multiple locations.
  • Hiring more dentists and dental professionals to work for your dental brand.
  • Other business investments for your dental practice.

From here the real problems of Dental Practice Management Starts.

Barring a few who have a high financial backing or doctor/dentist background, for many first time dentists, it becomes a huge task.

At such a time the first point of worry for the young dentist is how to arrange the initial financial investment to start a private dental practice.

Please note that establishing a dental practice is like peeling an onion that has multiple layers. There are many layers of problems to solve when a young dentist is planning to start a dental practice.

Gathering the finance for starting your dental practice, is just the beginning of the journey. There are many other things to solve before a dentist can hope to start a successful private dental practice.

You will have the following questions in mind before starting a clinic

The issues with a new practice are as follows.

  • What is a right & good dental clinic?
  • What is the minimum investment required to set this up?
  • Can I get a bank loan to finance my requirements?
  • What will be the timeframe required?
  • What kind of a place will be suitable to open the clinic?
  • How to go about the interior?
  • Where can I source all equipment & tools from?
  • Where can I get excellent staffs for my practice?
  • How do I get patients coming in?
  • When do I start maintaining accounts & record books?

We have previously discussed all the above points in another article, that tells you how to create a best dental practice with minimum investment. You can read the article here. (It will open in a new tab)

However, within the scope of this article, we will focus our discussion to how you can arrange that initial financial investment to start or expand your dental practice.

“How To Arrange the Initial Finance for the Dental Practice”

Dental Practice Management

It is the most stressful aspect of setting up a dental practice.

Whether you plan to have a small to moderate or a posh dental practice, the role of initial financial investment is very crucial. That can set the tone for your future progress. In this article, we will discuss in detail and completely address every doubt that you may have on the issue of raising and investing money for your dental practice.

Keep reading all the slides.

Go to the next slide to start decoding the secrets and commonsense of investing money to set up a dental practice

(Article continues on the next slide)

We are discussing the perfect and most sensible way to raise money to set up your dental practice. In the previous slide, we discussed the importance of raising adequate finance to set up your dental practice. However, the question remains, is there any particular rule to follow?

Yes,  there is a formula!

Formula – How to Plan on Raising Finance for Your Dental Practice 

Dental Practice Management

Before you get into arranging the money, keep these points or formula in mind:

Start Low to Moderate: In our experience and staying in tune with the ever-changing financial scenario, it is always better to start small to moderate with plans for expansion in the future depending on the growth your practice is showing.

Starting low keeps you flexible: Do not commit to a big spending from the onset. Raise and incrementally spend the investments. It is just common sense. As the saying goes concerning money – Do not put all your cash into one venture, all at the same time.

Starting Low Gives you time to make correct choices: Starting a dental practice involves many expenses. When you have just raised a substantial money from the market then in the excitement of setting up your practice there are always chances for you to go berserk in your spendings. Be careful and starting low will keep you in check. It gives you the time to analyze the expenditures.

Starting low gives you a Saftey Net: You must have heard stories where people have gone all out in their spendings, and to their dismay, the venture did not succeed. A young dentist gets swayed by the romantic stories where the protagonist puts all the money in the line and narrowly wins the jackpot. Such stories do happen but 1 in 100,000. So, it is better not to take chances to be the 1 in that 100,000 when you have raised much money from the market. (and you are liable for returning that amount)

With these points in mind, lets us start decoding the issue of arranging the initial investment for your dental practice.

There are three ways for you to arrange the money for your dental practice:

1 # Ask your parents or very close relatives

The safest way to organize money considering that your parents have adequate finance left with them to support you without much strain. In this mode, you get the required finance within the family without the worry of paying it back (along with interest) within a specified period. It relaxes you considerably, and you work towards a successful dental practice in a better frame of mind.

Dental Practice Management

Problems: Though this is the safest way to get the finance for your dental clinic, it has some loopholes.

    • It makes the young dentist complacent as he/she has no psychological, financial burden. It sometimes results in the young dentist not being motivated to work hard enough.
  • There have been cases, where parents have given away all of their retirement funds or sold a land to generate money to help their child start a dental practice. Though they do it out of their love, we request you to think 1000 times before doing so. Such financial decisions have the power to put your family in an economic logjam. What if the practice does not click or takes much time to gather pace? Then your family will have no financial cushion left.

So, if you are planning to take a money loan from your family, then it is imperative that you sit down with your family members and have a very open discussion about all the financial possibilities.

Also, never force your family to lend you money somehow even if they have to sell something valuable. This approach in most if the instances might not work out well for you.

Go to the next slide to start decoding the secrets and commonsense of investing money to set up a dental practice

(Article continues on the next slide)

See Next Slide to know 

The Second Method to Arrange the Finance

In this article, we are discussing the various ways for a dentist to raise that initial financial fund to start a dental practice.

2 # Ask your friends or raise money from private lenders

It is another way to raise money on a mutual understanding or a private legal contract between two individuals. It entirely depends on the level of agreement between the individual parties. However, before you enter into an understanding with any individual or private lender do proper paper works.

“Never enter into a verbal contract.”

When, signing or agreeing to a contract for borrowing the money, read the terms of the agreement carefully. It is for your safety so that you do not enter into any hidden clauses within the contract. 

I am not saying that do not trust people or friends. However, there is a difference between trust and blind trust. There have been many incidences where due to casual approach and overlooking the legal documents while taking a loan, individuals have landed into financial troubles. 

So, now you have been warned.

3 # Taking Bank Loans to Raise the Money for Your Dental Practice

Other than borrowing money from family, friends of private lenders, this is one of the most commonly used methods to raise funds for establishing your dental practice. A loan taken from the bank is regulated by the banking laws of your country.

It is one of the most organized sectors for every individual to raise money in a perfectly legal manner. However, there are many points that a dentist must consider before deciding to borrow money from the bank.

These points apply to all dentists irrespective of whichever country you belong. Follow these points very carefully when you take a bank loan.

Dental Practice Management

Bank Loans: If you are planning to take a bank loan to start your dental practice, then you have a difficult choice to make. You have to consider the banks that provide you a credit at a lower interest. However, the interest rate is not the only factor to consider.

What are the points to consider when taking a bank loan?

Interest Rate: The most important point to check first. Your goal should be to get a loan from the best bank you can manage at a lower rate. So locking in a competitive fixed rate for the next seven to 15 years is your best option.

Loan Term: While taking a loan you should consider the most extended loan term available (around 10 to 15 years). Breaking the credit for longer years will lower the payments. If your dental practice keeps pace and shows growth, then you have the option to prepay the entire loan in short segments.

Guarantor: A first-time applicant for bank loan requires a guarantor with an excellent reputation or some security before approving the loan application.

Emi Options: Usually the bank checks your credit balance or the credit reputation of your guarantor before providing you a loan. If you are applying a credit for the first time, then the bank will offer you the lower loan amount and subsequently increase it after making sure that the finance is being used efficiently.

Pre-Payment Option: Pre-payment options vary from lender to lender. Loan pre-payment terms are less important in the early years as you open and build your practice. However, pre-paying your loan may become an option after your practice is no longer considered a start-up and is looked upon by lenders as an established practice. However, this will again vary from bank to bank.

The points mentioned above are more or less standard for every dentist irrespective of the country. It is the beauty of money. It always follows the same rules (with slight modifications) everywhere. So, check all the bank regulations at your locations and then apply for a bank loan.

Go to the next slide to start decoding the secrets and commonsense of investing money to set up a dental practice

(Article continues on the next slide)

How bank decides whether to provide loan to a dentist or not

…See The Next Slide…

In this article, we are discussing the various ways for a dentist to raise that initial financial fund to start a dental practice. In the last slide, we also examined the points to take care before taking a bank loan.

Dental Practice Management

Almost all of the major banks all over the world provide loans to dentists. They have their ways to assess each loan application.

A dentist applying for a bank loan is usually a first-time loan applicant (looking to start a new practice) or a dentist with few year of professional dental practice under his belt (looking for expansion of his/her existing dental practice). 

There are few points that every bank will consider before approving the loan request for a dentist. Please take a note of these points as they are very crucial. If these points are not in order, then your loan application can be rejected. So read these points very carefully.

  • If you are a first-time applicant for a loan, then you will require a guarantor who can fulfill the criteria laid down by the bank. Banks will decide whether to approve your loan or not after analyzing the reputation of the guarantor.
  • If you are a dentist/doctor with a few years of professional career under your belt, then the bank will assess your loan application based on your credit reputation.

What are the points the bank looks for before approving a loan?

(Please note that these points just covers the necessary options. The final approval or rejection of the loan application depends on all factors considered simultaneously. It also differs from one country to another.)

Need or Greed?

Bank makes an assessment what the real requirement of the loan is?

Need or Greed refers to the intention for which you are applying for the loan. Personal loans are made available for genuine needs like marriage, hospitalization, sound business venture or whether it is taking personal credit for education.

However, if you wish to obtain the amount and invest it in stocks or commodities to generate a higher return by speculating, then it is highly not recommended. So, as a qualified professional (dentist) your need is well justified which is to start your private dental practice.

Credit History: 

In this clause, the bank assesses the credit history or the financial reputation of the

  • Applicant applying for the loan or
  • The guarantor who is supporting you for the investment.

So, if you are new dentist applying for the loan, then the financial reputation of your guarantor matters. If you are a dentist with few years into the profession, with an established dental practice, then your commercial or financial reputation matters.

Financial Reputattion: 

  • Financial history – Bank balance available.
  • Nature of profession (to assess stability)
  • Professional qualifications.
  • Age
  • Previous loans status – Pending or cleared.
  • Any additional income source.
  • Individual personal & professional reputation.

So, now you are almost ready to take a bank loan.

However, before that read the 3 final steps of precaution.

Have a complete read of the 3 points that can have a significant impact after you take the bank loans.

Interest rates: Carefully check the interest rates. Also, calculate the EMI that you would need to pay after taking the loan.

Interest Rates & Mortgage: Carefully check the interest rate. Also, assess the Mortgage that you need to furnish. If there is no mortgage, then the interest rate will be usually high.

Penalty Charges: In case you are not able to pay your dues on time, a hefty penalty that is charged on your loan amount. You should find out about the exact details regarding the penalty that may get levied in case of any such circumstance arising in the future. You want to ensure the affordability factor of the loan right from the beginning.

Please note the above-mentioned points are just the basics of banking regulations. Every country has their own set of banking rules. Therefore, depending on where you are located, you should follow all the necessary points as required.


What is the best approach to set up a dental clinic?

In the points mentioned above, we had an overview of the ways you can apply to raise the money required to set up your dental practice.

Be very clear that setting a dental practice is not cheap. Irrespective of where you are working as a dentist setting a private practice is always a costly proposition. And the expenditure and investment continue even after you finish setting up the practice (for maintaining the infrastructure, purchasing materials and paying salary to your practice associates.

Read this article to know more about the types of costs involved in setting up a dental practice:


What are the various types of cost involved when you start with your dental clinic. This article will provide you the details on the financial expenditure – one-time expenditure &recurringg expenditure. Hi there, young dentist. How you doing ?

Hence, here comes the most practical solution to investing money in setting up your dental practice :

DO NOT GO ALL OUT on spending everything you can.

(Irrespective, whether you are raising money by a loan or you have tons of money as inheritance)

In the modern day times, it is always wise to go gradually while investing money. Make a strong plan and gradually completing it rather than going all out.

By going gradually, you get the much necessary chance to keep a close watch on the spendings and at the same time correct your ways in the case you want to change certain aspects halfway.

With this, we conclude the article in the hope that you now have a better grasp of arranging and managing money to start your dental practice.

As this post is all about arranging money, you may like to read another post on the 10 best financial and social ways to successfully start a new clinic.

10 Business and Financial Steps To Start A Dental Practice Start Up

As a dentist be assured that you have chosen a viable profession with a high rate of proven success stories from all over the world. On the whole, dentists are one of the most top tax paying group of professionals, across the globe.