Dental Office Feasibility Study in Colorado

Bigger dental loans that rarely unwind

Colorado dental lending departs from both the state's wider SBA book and dental offices nationally on size and on follow-through. First, size: the median of 287 approvals from FY2017 to FY2026 is $882,000, 1.74x the national dental median, with half of all Colorado practice loans between $351,350 and $1.9 million and $362.1 million approved in all. Second, follow-through: just 6.0% of Colorado dental approvals in FY2017 through FY2024 ended in cancellation, and the ceiling, which adds loans never disbursed, is also 6.0%. That cancellation floor sits under both the national dental rate and Colorado's all-class rate by more than our margin, while the median sits well above the national figure.

Loans this size usually mean practice acquisitions, often with the building, or a new office with a full equipment package. One lender shapes the market: Live Oak Banking Company is current holder of 96 Colorado dental loans under 7(a), worth $192.6 million, far more than any other holder. Wells Fargo Bank National Association holds 31 worth $28.1 million, The Huntington National Bank 15 worth $20.4 million, BMO Bank National Association 13 and U.S. Bank, National Association 7. SBA 7(a) carried 256 approvals against 31 under SBA 504, and B:Side Capital holds 23 of the 504 loans for $20.7 million. Franchised practices are 1.4% of loans. Colorado ranks 6 of 54 for dental lending, the location quotient is 1.29x, and dentistry is 7 of 39 among Colorado classes.

Losses, timing and volume

Charge-offs are scarce. Colorado's 148 practice loans funded in FY2017 to FY2021 carry a write-off floor of 1.4% to date, and 0.68% failed inside their first five years, both floors on a group that is still repaying. For a lender, the Colorado dental record combines large exposure per loan with a thin loss history; for a borrower, it means a well-prepared acquisition file usually closes. Volume peaked at 45 approvals worth $74.0 million in FY2021, fell to 19 in FY2023, and recovered to 32 in FY2025 before 20 in FY2026.

What a Colorado dental study must test

Approvals by county: Arapahoe County holds 38 approvals, Jefferson 35, El Paso 32, Denver 31, Boulder 29, Larimer 26 and Weld 23. A study has to count dentists and chairs per resident in the practice's draw area, and test patient retention through a change of ownership, because an acquisition at this size is priced on collections that may not all stay. Goodwill, equipment and real estate each need their own support in the cost case. Model coverage on collections after the selling dentist's departure, with associate compensation and the buyer's own draw included. The appraisal must split the practice's going concern value from the building, since a lender advancing against goodwill needs evidence it will hold. No coding limitation applies to Colorado dental offices, and no other class shares their code.