Dental Practice Seller Financing: Terms and What to Expect in 2026
Most dental practice sales in 2026 are bank-funded. Practice lenders will finance 100% of a healthy practice's purchase price, which is why full seller financing is rare. Where seller financing actually shows up is as a partial note: the seller carries 10% to 30% of the price, and the bank funds the rest.
Here's what typical terms look like right now.
The standard seller note
On a $900K practice, a 20% seller note is $180K. Common structure: 5 to 7 year term, 6% to 9% interest, monthly payments. At 7% over 6 years, that $180K note costs the buyer about $3,070 a month.
Almost every bank will require the seller note to be subordinated to their loan. Many go further and require full standby: no payments on the seller note for the first 12 to 24 months. If you're the seller, model your proceeds assuming you see nothing from the note in year one.
Why sellers carry paper at all
Three reasons come up in most deals. It bridges a valuation gap when the buyer's bank won't lend to the seller's number. It gets a deal done with a buyer who is strong clinically but thin on cash. And it signals confidence: a seller who keeps 20% of the price at risk believes the patients will stay.
What buyers should negotiate
Offset rights matter more than the interest rate. Tie the note to the seller's reps: if active patient counts were overstated or undisclosed liabilities surface, you can offset losses against remaining note payments instead of suing. Also confirm the transition terms in writing, including how long the seller works back and what happens to the note if they compete.
What sellers should require
Get a personal guarantee from the buyer, not just the practice entity. Require life and disability insurance on the buyer with you as beneficiary up to the note balance. Define default triggers clearly: usually 2 missed payments, with a cure period.
Seller financing terms get set during diligence, not at closing. Run the numbers in our acquisition due diligence checklist before you agree to a note size. If your exit is a DSO rather than an individual buyer, the equivalent structure is usually an earnout: see when to sell to a DSO and how DSO earnouts are structured.
