For many dentists, the leap from associate to practice owner is like moving from the passenger seat to the driver’s seat, except now you’re also in charge of the fuel, the insurance, and the occasional flat tyre. Ownership brings higher earning potential, equity growth, and the ability to run things your way, but it also introduces a new challenge: money management on a bigger stage and managing both yourself and others.
Banks might love dentists, but they also love paperwork and due diligence. A smart lending strategy not only makes your first purchase possible, but if done correctly it can set you up for decades of financial growth.
This guide breaks your journey into three stages:
- Buying your first practice
- Expanding and building wealth
- Managing debt in any interstate environment
First Practice Purchase: Winning Over the Bank
Your first practice purchase is your “I’m officially a business owner” moment. It’s exciting, liberating, and occasionally terrifying. Up until now, your biggest financial concern might have been your car loan and a few dental conferences. Now, you’re talking six or sevenfigure loans, lease agreements, and cash flow projections.
Banks are happy to lend to dentists because dentistry is considered a lowrisk profession and from my experience one of the safest business bets in Australia. People will always need fillings and checkups. That being said firsttime buyers still need to tick all the right boxes.
A wellstructured first loan is about more than just getting the keys; it’s about setting up flexibility for growth and making sure you don’t overcommit, especially in the first 12 months. Here’s what lenders really look for and how to avoid rookie mistakes.
Deposit Size
- Goodwillonly purchase (patient book, no property):
Many banks will lend up to 100% of the purchase price for dentists. They may, however, ask for a little “comfort” in the form of a personal guarantee or security over your home.
- Practice property:
Expect to tip in a 10–20% deposit for the property portion. Owning the building often opens future equity opportunities, but it does mean a bigger initial outlay.
Goodwill Valuation
- When purchase a practice the bank values the practice based on a few key things:
- Patient list and the matched revenue
- Practice reputation, location and suburb income. All factors contributing to determine the premium you will pay.
- Chair/Equipment Quality: Depending on the asset quality this could also sway your thinking towards a certain offer level.
- They like to see at least 24 months of steady revenue. Basically, loyal patients who keep coming back for checkups and aren’t just passing through for a single whitening special.
Personal Guarantees
- Even dentists with the whitest of smiles usually sign a personal guarantee, especially for 90–100% lending.
- Definitely chat to both your accountant and broker how this affects you personally and the rest of your portfolio.
Checklist: Timeline to First Practice Ownership(On a high level)
| Stage | Key Steps |
| Prior to Practice Purchase Consideration | Build savings, reduce personal debt, collect 2+ years of tax returns. |
| 6–12 Months Before | Engage an accountant and broker to check your borrowing power, all tax affairs are up to date, so everything going forward is smoother. |
| 3–6 Months Before | Identify practice opportunities, ask accountant to review offer price subject to an in-depth valuation and do research on the lease terms so that there are no cost surprises that might arise later. |
| At Purchase | Subject to borrowing capacity, you proceed to arrange finance approval, sign contracts, plan cash flow for 12 months. |
| PostSettlement | Monitor performance and check your loan structure is taxsmart. |
| Insider Tip: A Broker who “speaks dentist” can make life a lot easier. Not all bankers understand associate income, SFA structuring or cash flow specifics, or how to structure loans without turning your personal finances into a root canal. |
Dentist, Investor, Landlord: Using Lending to Build Wealth
Once your first practice is humming along, a funny thing happens: the bank that grilled you for your first loan now calls you a “valued client.” Regular income and healthy profit margins make dentists highly bankable and effectively where the wealthbuilding phase begins.
At this stage, the conversation shifts from “Can I afford this practice?” to “How do I make my money work harder?” You start to think about:
- Owning your practice premises
- Opening a second location
- Using your strong cash flow to build a property or investment portfolio
This stage is where the biggest wealth leaps happen, but also where overleveraging can creep in if your lending strategy isn’t structured properly. Smart dentists separate personal and professional finances, use leverage strategically, and think longterm about both lifestyle and retirement.
- Expand Your Practice Holdings
- Open a second location when patient demand and cash flow allow, an even considering on buying the premises
- Consider an SMSF property purchase: rent from your practice flows into your super, but watch the compliance rules (and always get advice first. Hint hint).
- Growing the Portfolio
- Many dentists at peak earning years, spread their risk use surplus cash or practice equity to buy other asset such as property or shares. That’s where accountants are imperative to ensure where possible everything is tax deductible.
- Beware overleveraging, nothing kills sleep faster than juggling home, business, and investment loans all at once.
| Insider Tip: Avoid the “all-in-one loan trap”, where your home, business, and investment loans are bundled together like a dodgy whitening deal. It can limit refinancing options and put your personal assets in the firing line. |
Interest Rates: Keep Calm and Drill On
Even for experienced owners, interest rates can sting. Higher repayments squeeze cash flow, delay expansion, and can even nudge practice valuations down.
Smart debt management keeps practices resilient:
- Review and refinance regularly to secure better rates or split/fix loans.
- Maintain a 3–6 month cash buffer to weather lean months.
- Prioritise revenuedriving investments, not just the fanciest new waitingroom art.
Think of debt like oral hygiene: check it often, treat issues early, and don’t wait for pain.
Key Impacts for Dentists
- Cash flow pressure: Variablerate loans on practices, homes, or equipment can start to hurt.
- Patient behaviour: Tight wallets can mean delayed checkups or fewer cosmetic treatments.
- Refinancing opportunities: Oddly, higher rates can also be a chance to restructure, fix part of your loan, or consolidate expensive debt.
Smart Strategies in a HighRate World
- Review and refinance: Don’t just accept the first offer, shop around and consider fixed or split loans.
- Maintain a cash buffer: 3–6 months of operating expenses helps you sleep at night.
- Separate your debts: Keep personal, business, and investment loans distinct for flexibility and tax efficiency.
- Expand wisely: Focus on equipment or renovations that genuinely boost profit—not just the fanciest new dental chair because it “feels ergonomic.”
The Takeaway: Align Lending With Your Career Stage
Dentistry offers high earning potential, but without a smart lending strategy, debt can quickly become more plaque than polish.
- Earlycareer dentists: Focus on structuring finance for your first practice—flexibility and tax efficiency are your friends.
- Midcareer dentists: Use lending to accelerate wealth through practice growth and property investment.
- All dentists: Actively manage debt and plan for rate movements to protect cash flow and future opportunities.
Owning and growing a dental practice isn’t just about drilling teeth, it’s about building a life of independence, security, and opportunity. With the right lending strategy, every loan becomes a stepping stone: from your first practice purchase to expanding your empire, from paying down debt to creating longterm wealth. Treat your finances with the same care you give your patients, and your career can shine brighter than the healthiest smile in your chair.
Author
Keegan Du Preez
Accountant
Ecovis Clark Jacobs
Disclaimer
This article is for general information purposes only and is not financial advice. Readers should seek advice from a qualified professional to ensure any strategy is appropriate to their circumstances. All data is current at the time of publication, but subject to change.