Buying a Dental Practice: A Finance Guide for Buyers

Why dental practice purchases are structured differently

Buying a dental practice is one of the most common professional acquisitions in the UK, and lenders are familiar with it. Specialist professions lenders, high-street banks and challenger banks all have established approaches to dental practice loans. That familiarity helps, but it also means lenders have clear views on what makes a good or a weak purchase, and they will apply them.

The key feature of a dental acquisition is that most of the price is usually paid for goodwill: the value of the patient list, the income it generates and the reputation of the practice. There is also equipment, which may need replacing, and the premises, which may be bought or leased. Each element is assessed differently. A well-structured funding package matches each cost to the most suitable form of finance rather than putting everything into one loan.

This guide focuses on the finance. You will also need a specialist dental solicitor and an accountant with dental experience, and your funding timeline should run alongside theirs.

NHS, private and mixed practices: why the income mix matters

Dental practices in England broadly fall into three types: those with mainly NHS income, those that are fully private (often with a monthly plan scheme), and mixed practices with both. Lenders care about the mix because it determines where the income comes from and what could change it.

In England, NHS primary care dental services are commissioned by integrated care boards, and activity under the contract is measured in units of dental activity (UDAs). NHS England has introduced a series of quality and payment reforms to the dental contract, with changes taking effect during 2026. UDAs remain the main activity measure, but the reforms introduce new requirements, including for urgent care, which a buyer and their adviser will want to understand when assessing an NHS or mixed practice.

• NHS-heavy practices: income is contract-backed and predictable, which lenders like, but depends on the contract continuing, on meeting contracted activity, and on the commissioner’s approach to the change of ownership.
• Private practices: income depends on patients choosing to stay after the sale. Lenders look at patient numbers, plan membership, retention history and how much of the income is tied to the outgoing principal personally.
• Mixed practices: lenders assess each stream on its own terms and look at whether the mix is stable or shifting.

Wales, Scotland and Northern Ireland have their own NHS dental arrangements, so if the practice is outside England your solicitor and accountant will need to confirm the position that applies.

Regulatory approvals: CQC, GDC and the NHS contract

In England, a dental practice provides regulated activities and must be registered with the Care Quality Commission. The CQC’s guidance on buying, selling or transferring a registered business explains that regulated activities must continue during a sale, that the buyer needs to be registered before providing them, and that the outgoing and incoming providers should apply around the same time so the CQC can assess the applications together. The CQC can also issue a position statement during the process.

If you are buying through a company, the General Dental Council’s guidance on corporate dentistry and dental bodies corporate explains the requirements that apply under the Dentists Act, including those on the make-up of the board. The GDC is not a licensing body for practices, but its rules still affect how you structure the purchase, so take legal advice early.

Where the practice holds an NHS contract, the contract does not simply pass with the sale. How it is dealt with, and what the commissioner needs to see, is a legal question your solicitor will lead. From a finance point of view, lenders will usually want to see that the route for the contract is understood and progressing before they release funds for an NHS or mixed practice. See our guide to every cost in a professional practice purchase for approvals across other professions.

Goodwill, equipment and the condition of the surgeries

Goodwill is normally the largest single cost and is usually funded with a term loan, which is where the lender’s assessment is most detailed. Lenders will look at the valuation, how it was arrived at, and whether the income that supports it is likely to continue under new ownership. A valuation from a specialist dental valuer is often expected. Our page on goodwill finance covers how lenders approach it.

Equipment is a separate question. Dental chairs, imaging, decontamination equipment and practice software all have finite lives. If the surgeries need updating shortly after completion, that cost should be in the plan from the start. Equipment can often be funded through equipment finance, hire purchase or leasing, which keeps the acquisition loan focused on goodwill and spreads the cost of assets over their working life. Our guide to equipment finance, hire purchase and leasing explains the options.

A full surgery refit or an additional surgery is closer to a refurbishment project. Lenders are generally comfortable funding improvement work, but prefer to see it planned and costed rather than discovered after completion.

Premises: freehold or leasehold

If the practice owns its premises, you may be offered the freehold as part of the deal or separately. Buying the freehold usually involves commercial mortgage-style lending secured on the property, with its own valuation and legal work. Some buyers prefer to lease the premises from the seller initially and buy later. See practice premises finance for how that side works.

If the practice is leasehold, the lease becomes an important part of the lender’s security and of the value of the goodwill. Lenders will look at the remaining term, rent review and break provisions, any restrictions on use and assignment, and whether the landlord’s consent is needed. A short lease can undermine an otherwise strong acquisition because the goodwill depends on being able to trade from those premises.

Due diligence and the documents lenders expect

Lenders do not carry out your due diligence for you, but they rely on it. The better organised your information, the faster a credit decision tends to be. Expect to provide:

• Recent accounts and current management information for the practice, split between NHS, private and plan income where relevant.
• Details of the NHS contract, including contracted activity and recent performance against it, where applicable.
• Patient numbers and, for private practices, plan membership and retention.
• A list of staff and associates and their contracts.
• The goodwill valuation and, if applicable, the property valuation and lease.
• Recent CQC inspection outcomes and any compliance issues.
• Your own CV, personal financial statement and a business plan or cash flow forecast for the first years after purchase.

For a share purchase, where you buy the company that owns the practice rather than its assets, due diligence is wider: the company’s tax affairs, historic liabilities, employment claims and any existing borrowing all come with it. Lenders will adjust their approach accordingly, and may take security over the company as well as asking for personal guarantees.

Your accountant can help turn this into forecasts that reflect your plans rather than the seller’s history. Our guide to preparing a practice finance application sets out what makes a strong submission.

Associates, staff and patient retention

In many practices a significant share of the dentistry is carried out by associates rather than the principal. Lenders will want to know who the associates are, how long they have been there, what their agreements say about notice and restrictive covenants, and whether they are expected to stay. If the outgoing principal is a major producer, lenders will look for a handover plan, often with the seller staying on for a period.

Nurses, hygienists, therapists and the practice manager also transfer to the buyer in most asset purchases, under employment protection rules your solicitor will explain. A stable team supports patient retention and therefore the goodwill. Where recruitment is needed after completion, recruitment finance can help spread the cost.

What lenders assess and deposit expectations

Across all of the above, a lender is asking two questions: can the practice service the debt comfortably from its profits after you have paid yourself, and what happens if things do not go to plan. They will look at the income mix, the sustainability of the goodwill, your clinical and business experience, the premises position and the overall level of borrowing.

Most lenders expect a buyer to contribute some of their own money to a dental acquisition. The amount varies considerably between lenders and cases. Buyers with strong experience, a practice with a good trading record and a clear plan may find lenders willing to fund a higher proportion of the cost, while a first-time buyer taking on a practice with income concentrated in the seller may be asked for more. Equity from property, savings or family support can all form part of the contribution, and lenders will want to understand where it comes from.

Working capital after completion is often overlooked. NHS income arrives on a monthly cycle and private income can dip during a handover, so it is sensible to plan for a buffer. See practice working capital.

Sequencing the purchase

Dental purchases have several strands running at once: legal work, CQC registration, the NHS contract where there is one, finance and, sometimes, the property. The practical sequence usually looks like this:

1. Agree heads of terms with the seller, including price, what is included and any deferred elements.
2. Have an early conversation about finance, so you know what lenders are likely to support before committing to large professional fees.
3. Instruct a specialist solicitor and accountant, and start due diligence.
4. Submit the finance application with the valuation and forecasts, and start the CQC application alongside the seller’s.
5. Obtain a credit decision and offer, then agree the conditions that must be met before drawdown.
6. Complete once the legal, regulatory and finance conditions are all in place.

The timescale is driven by the slowest strand, which is often regulatory rather than the finance. Starting the finance early does not commit you, and it reduces the risk that a strong deal is delayed at the end.

How we can help

We arrange finance for dental practice purchases across the whole of the market, with access to 300+ lenders including specialist professions lenders, high-street and challenger banks and asset finance houses. We structure the funding so goodwill, equipment, premises and working capital are each matched to suitable finance, present the case to lenders and manage the process through to completion. Finance is subject to status, lender criteria and approval.

Read about practice acquisition finance, see how it works, or visit our buying a practice hub.

Common questions

This guide is for general information only and should not be treated as legal, tax, accounting or financial advice. Funding availability and lender requirements depend on individual circumstances.