| Detail | Amount |
|---|---|
| Down payment | $0 |
| Monthly payment during interest-only period | None |
| Annual debt service (12 full payments) | $0 |
| First-year debt service | $0 |
| Total of all payments | $0 |
| Debt service coverage ratio | Enter cash flow |
| Year | Payments | Interest | Principal | Ending balance |
|---|---|---|---|---|
| Enter a loan amount, rate, and term. | ||||
Estimates only. Fixed rate assumed. This is not financial, tax, or legal advice.
The purchase price gets the attention in a practice deal, but the monthly payment is what you live with for the next decade. This calculator turns a price, down payment, rate, and term into the numbers that matter after closing: the monthly payment, what the loan costs you in interest, how fast the balance falls, and how much of the practice's collections go to the lender each year.
How to use the practice loan calculator
Enter the purchase price and your down payment percentage. If the lender is also financing working capital, equipment, or closing costs in the same note, add that amount in Other amounts financed. Then enter the rate and term from the lender's term sheet, any interest-only months, and the practice's annual collections. The results and the year-by-year table update as you type.
If you have a figure for the practice's cash flow before loan payments, enter it to see a debt service coverage ratio. Leave it blank if you do not; the rest of the calculator works without it.
What each input means
- Purchase price: the agreed price for the practice. Our guide to how dental practices are valued explains where that number comes from.
- Down payment: your cash in the deal. Some dental lenders finance close to the full price for qualified buyers; others, and some loan programs, require an equity injection. Ask each lender.
- Interest rate: the 7.5% default is an example, not a current market rate. Many practice loans, including many SBA 7(a) loans, carry variable rates tied to the prime rate, so your payment can change after closing. This calculator assumes the rate stays fixed.
- Term: the total length of the loan. Acquisition loans without real estate commonly run around 10 years, and SBA 7(a) loans for a business purchase without real estate are generally limited to 10 years. Some dental lenders offer other structures. Loans that include real estate can run much longer.
- Interest-only months: some lenders let you pay only interest for the first months after closing while you settle in. This calculator counts those months inside the term, so the remaining months have to repay the full balance and the regular payment comes out higher.
- Annual collections: the money the practice actually took in, not production.
The math in plain words
Loan amount is the purchase price minus your down payment, plus any other amounts financed. The monthly rate is the annual rate divided by 12. During any interest-only months, the payment is simply the balance times the monthly rate. After that, the calculator uses the standard fixed-payment amortization formula: the one level payment that, applied every month for the remaining months, pays the balance to zero. Each payment covers that month's interest first, and the rest reduces the balance, which is why early years are mostly interest and later years are mostly principal.
Annual debt service is 12 regular payments. Debt service as a percentage of collections is that annual figure divided by collections. The coverage ratio divides your cash flow figure by annual debt service: 1.00x means the cash flow exactly covers the payments with nothing left over.
Why debt service as a share of collections matters. Loan payments come out of the same collections that pay staff, rent, supplies, lab, and you. Comparing the payment with collections shows how much room is left for everything else. Read it next to the practice's overhead, using our guide to dental practice overhead benchmarks, rather than against a single rule of thumb. Lenders will run their own coverage test with their own definitions, so ask how they calculate it.
Worked example (hypothetical)
Using the default numbers, which are made up for illustration: a practice with $1,000,000 in annual collections sells for $900,000. The buyer puts 10% down ($90,000) and borrows $810,000 at 7.5% for 10 years with no interest-only period.
| Hypothetical example | No interest-only | 6 interest-only months |
|---|---|---|
| Payment during interest-only months | None | $5,062.50 |
| Regular monthly payment | $9,614.84 | $9,955.85 |
| Annual debt service (12 regular payments) | $115,378 | $119,470 |
| Debt service as % of collections | 11.5% | 11.9% |
| Total interest over 10 years | $343,781 | $355,342 |
The interest-only period cuts the payment roughly in half for the first six months, which can help during a transition, but it costs about $11,600 more in interest in this example and raises every payment after it. If the buyer entered $250,000 of cash flow before loan payments, the coverage ratio on the no-interest-only version would be about 2.17x.
Do not model the loan on the seller's best year. Collections often dip after a sale while patients get to know the new dentist. Run the calculator again with collections 10% or 15% lower and make sure the payment still works. Our practice acquisition guide covers due diligence on the numbers.
What this calculator does not include
- Variable rates. If your rate floats, payments will move with the index. Try a higher rate to see the effect.
- Fees. Loan origination fees, SBA guaranty fees where they apply, appraisal, legal, and closing costs are not included unless you add them to Other amounts financed.
- Other debt. Seller notes, equipment loans, real estate loans, lines of credit, and your student loans all compete for the same cash. See dental student loan repayment in 2026.
- Prepayment terms and balloon payments. Some loans charge for early payoff or come due before they fully amortize. Read the note.
- Taxes. How the purchase price is allocated affects your deductions. That is a question for your CPA.
For current limits and program basics, see the SBA's own 7(a) loan page, which lists a maximum 7(a) loan amount of $5 million.
Where to go from here
Use the calculator to compare term sheets side by side: same price, different rates, terms, and interest-only periods. If you are still deciding how to get into ownership, read startup vs. acquisition and financing a practice startup. Once you own the practice, financial management for practice owners covers how to keep debt service in proportion as the business changes.
All results are estimates only and are not financial, tax, or legal advice. Confirm loan terms with your lender, and review any purchase with a dental-specific attorney and CPA.
Estimates only. This calculator is not financial, tax, or legal advice. Confirm numbers with your CPA, lender, or advisor before making decisions.