Dental Office Feasibility Study

Questions buyers ask

Who prepares a feasibility study for a dental practice loan?

A party with nothing riding on the practice, whose findings a credit officer can take at face value. Loan Analytics prepares dental office studies whether the money comes through a USDA Business and Industry guarantee, SBA 7(a) or 504, or a conventional loan from the bank, and every one goes out under the signature of Daniel Smith, MAI. Each study begins from the dental record on this page, 7,105 7(a) loans and 1,440 504 loans approved over FY2017 to FY2026, then narrows to the state, metro and lender where the request will be read, so the lender can see where this practice falls among the dental loans its peers have already made.

Does a bank have to see a feasibility study before it finances a dental practice?

Not automatically. The fee research this site posted for 2026 explains that SBA treats a study as discretionary and may ask for one on certain facts, among them market saturation by industry type and location, an unusual concept, highly specialized property, or a project out of scale with its community; banks commission studies on their own initiative too, start-ups being the usual case. For dentists, saturation is the live question in the busiest markets: Los Angeles-Long Beach-Anaheim alone has 654 dental loans on this page. A start-up, a relocation into a crowded trade area or a building purchase sized well above the state median are the requests most likely to bring the question.

How much does a dental office feasibility study cost?

Dental offices have no tier of their own in the 2026 fee survey we published, so the fee is set once the study is scoped. The survey's published tiers frame it. One SBA site with a standard asset: $5,000 to $12,500. Complex SBA projects, meaning several sites, an unusual concept or construction in phases: $10,000 to $25,000. Written to 7 CFR Part 5001 for a USDA lender, a dental study would fall in a tier that begins at $7,500 and climbs beyond $18,750. Buying an operating practice with its collection history usually takes less work than a start-up with none, and a project that joins a practice purchase to a building or a full build-out takes more.

Can the study's fee go into the dental loan itself?

In most cases, yes. Per this site's 2026 fee survey, 504 counts eligible soft costs inside the project total that the debenture finances, and 7(a) proceeds may pay third-party report fees, so the study usually appears as a line in the project budget rather than as a separate check. The same survey points out that SBA does not fix or limit the fee, and that the lender commissions the study for independence while the borrower bears the cost, much as with the appraisal. For a dental purchase near the $494,000 7(a) median, the fee is one of several third-party costs inside the same loan.

How long does a dental feasibility study take?

That depends on the scope, which is why we set the timeline with the scope rather than quote one in advance. Our 2026 fee survey names the things that stretch a study: additional sites; new construction, with a budget to review and a ramp counted from completion; franchise concepts; a USDA overlay; and sparse rural markets where the competition has to be checked on foot. For a dentist the largest variable is usually whether the practice already exists. An acquisition with collection records and a patient list is read largely from documents, while a start-up or a relocation needs the trade area, the competing practices and the ramp built from fieldwork. Order the study early enough that the appraisal and the commitment do not wait on it.

What will the lender test when I am buying a dental practice?

Whether the practice's collections, not its production, carry the new debt once the buyer pays a dentist's market wage, and whether those collections survive the seller's exit. The study works from the practice's own records: the active patient base, recall and hygiene volume, production by provider, the payer mix and the share of revenue tied to the selling dentist. It sets the price against what those collections support, and it keeps goodwill apart from equipment and any real estate, since a lender recovers little from goodwill. With 1,836 7(a) dental loans at $150,000 or less and 856 between $2 million and $5 million, dental 7(a) loans span a wide range, and the depth of the test scales with the loan.

What does a feasibility study for a dental start-up have to prove?

That there are patients for one more office at that address. The study draws the trade area the office can serve, counts the population and the dentists already practicing in it, and weighs the payer mix, because fee-for-service, PPO and Medicaid patients pay very differently. It builds the ramp month by month to the point where collections cover the payment and a market wage for the dentist, and it checks the build-out budget, from chairs and cabinetry to imaging, sterilization and the air and suction lines behind the walls. In a metro with a deep record, Dallas-Fort Worth-Arlington with 280 dental loans or Phoenix-Mesa-Chandler with 151, the competing practices are many, and the study must name them rather than estimate them.

Should my dental office loan be 7(a) or 504?

Dentists have split 7,105 7(a) loans against 1,440 under 504 over FY2017 to FY2026. As this page's own analysis explains, the choice often turns on whether the deal includes the building, since 7(a) can finance a practice purchase with its equipment and patients while a 504 dental project usually means buying or building the office. The programs sit at different sizes, 7(a) from a $150,000 lower quartile to a $1.1 million upper quartile and 504 from $362,000 to $985,000, and they fail in different ways: 504 approvals were cancelled at a floor of 16.6% against 12.0% for 7(a), while 504 shows a 0.00% charge-off floor against 1.7%. Whichever program the lender picks, the study is written to its terms.

Which lenders make the most SBA dental loans?

On this page's FY2017 to FY2026 record, Live Oak Banking Company leads with 1,157 dental loans and $2.01 billion. Behind it come The Huntington National Bank (502 loans, $402.3 million) and Wells Fargo Bank National Association (464, $365.4 million); then, with 256 loans and $302.8 million, United Midwest Savings Bank National Association; then Bank of America, National Association (246, $151.0 million) and U.S. Bank, National Association (223, $153.5 million). Of the lenders named as development companies, the largest dental books belong to The Mortgage Capital Development Corporation (74) and CDC Small Business Finance Corp. (72). No lender with fewer than 5 dental loans is listed, and a withheld charge-off floor is never given a number.

Where are SBA dental office loans concentrated?

California leads with 1,652 loans and $1.53 billion. Texas comes next with 756 loans and $699.4 million, Florida with 620 loans and $565.7 million, New York with 390 loans and $221.7 million, and Ohio with 335 loans and $313.7 million. Colorado's 287 loans carry $362.1 million, more than New York or Ohio. Among metros, Los Angeles-Long Beach-Anaheim (654 loans), New York-Newark-Jersey City (430), Dallas-Fort Worth-Arlington (280), Miami-Fort Lauderdale-West Palm Beach (212) and Chicago-Naperville-Elgin (199) lead. At the bottom, Mississippi, Montana, Vermont, West Virginia, Wyoming, Hawaii and Delaware each record too few dental loans to support a median or either floor, and a study there relies more on fieldwork than on the state record.

How often are SBA dental loans charged off?

Rarely, on the record so far. For dentists' 7(a) loans first funded from FY2017 through FY2021, at least 1.7% have now ended in charge-off, 0.98% of the cohort inside five years of funding; for dentists' 504 loans of those same years the floor is 0.00%. These are floors on cohorts of 30 loans or more, not forecasts. The spread by state is wide: Tennessee shows 8.3%, Maryland 4.8%, Connecticut 4.5% and New York 4.3%, while Michigan, Illinois, Minnesota and a number of other states show 0.00%. Among metros, Dallas-Fort Worth-Arlington reports 3.8%. A lender in a state with a high floor will put more weight on the study's downside case.

How often do approved dental loans get cancelled before funding?

More often than they are charged off. At least 12.0% of 7(a) and 16.6% of 504 dental approvals from FY2017 to FY2024 were cancelled. By state the floor runs from 4.9% in Nevada and 5.9% in Arizona to 23.7% in Maine and 27.0% in New Hampshire. A cancellation costs the borrower the time and the third-party fees already spent. A study ordered early, and scoped to settle the price, the seller's transition, the lease or the build budget before the commitment, lets both sides see a problem while the deal can still be changed.

What size loan do dentists usually get through SBA?

The 7(a) median is $494,000, and its quartiles sit at $150,000 and $1.1 million; the 504 median is $600,000, with quartiles of $362,000 and $985,000. State medians range from $160,000 in Rhode Island and $263,900 in Kentucky to $882,000 in Colorado and $993,000 in South Dakota, and metro medians from $100,000 in San Juan-Bayamón-Caguas to $1.4 million in Boulder and in Fort Collins-Loveland. The size-band table shows no dental loan above $5 million in either program. The study benchmarks a request to the narrowest row that has one: the metro first, then the state.

Does the feasibility study replace the appraisal or the practice valuation?

No; each answers a different question. The fee survey (2026) on this site sets out the SBA triggers: a licensed or certified appraiser's report once a loan above $500,000 is backed by commercial property, and a business valuation by an independent party when ownership changes and the financing, net of the appraised property and equipment, tops $250,000. It quotes published prices of $2,500 to $7,500 for an ordinary appraisal and $1,800 to $7,000 for a valuation. In a dental purchase, what the financing covers beyond appraised property and equipment is the practice's goodwill, which is exactly what that test measures. The feasibility study asks whether the practice can carry the loan; it draws on the valuation's allocation but does not stand in for it.

Is a study required if the dental office is financed with a USDA guarantee?

Our 2026 fee survey reports that USDA makes the study mandatory on new-business loans over $1 million, that the study follows 7 CFR Part 5001, whose requirements run longer than SBA's discretionary list, and that published fees for this tier start at $7,500 and pass $18,750. Loan Analytics prepares dental studies to that standard as well as to SBA's. This page carries no USDA loan record for dentists; its tables are SBA 7(a) and 504 only, so a USDA dental study must draw its market evidence from the trade area and from fieldwork, using the SBA dental rows only as a benchmark for loan size and outcomes.

Is a dental building owned by an investor counted on this page?

No. Loans enter this class by the borrower's own industry code, so a loan appears here when the borrower is the dental practice itself. A landlord that buys or builds an office to lease to dentists borrows under a property lessor code and falls outside these tables. That matters for the study you need: a practice that owns its office through 504 is in this record, among the 1,440 504 loans from FY2017 to FY2026, while an investor's medical office is underwritten on its rent roll and leases, a different study from the one this page describes.

What should I send to get a dental feasibility study scoped?

The address or trade area; which kind of project it is, start-up, purchase, relocation or expansion; the number of operatories; whether the building is part of the deal; the program and lender if you have them; the amount you plan to borrow; and the lender's due date for the report. For a purchase, the practice's recent collections and patient counts help us size the work, and for a build, the contractor's budget does. We read the request against this page's rows, the state median and floors, the metro row, the lender's dental book and the size band, before we reply with scope, timeline and fee.

Does it matter which lender my dental loan goes to?

It shapes what the study must emphasize. Lenders' dental books differ in size: United Community Bank (SC) made 175 dental loans for $192.1 million, BayFirst National Bank 159 for $35.4 million. A lender with large tickets is more likely to see a request as a practice with its premises; a book of small tickets points to equipment or partial purchases. Newtek Bank, National Association (180 loans) and Northeast Bank (ME) (122) report no charge-off rate because too few of their dental loans fall in the measured cohort, which marks much of their dental lending as recent; they have less history of their own to lean on and more need of the study's evidence. We scope each study to the lender that will read it.