A Colorado dentist was purchasing her first practice — an established general dentistry office with a patient base of approximately 1,400 active patients and strong production numbers. The purchase price included a significant goodwill component, which was appropriate given the practice's referral network and patient retention.
Her first two months were spent with a bank that handled her personal accounts and a small business she had previously owned. The loan officers were willing but not fluent in healthcare acquisition underwriting. They asked for documents that weren't relevant to dental practice lending, didn't know how to read the practice's production and collection reports, and kept returning with questions that suggested they were underwriting the deal the way they would underwrite a retail acquisition.
After eight weeks of back-and-forth with no clear path to approval, she reached out to her dental school's alumni network, which led to a specialist referral.
The healthcare specialist lender had a dedicated dental lending team. Their first call focused on the right questions: trailing 12-month production by provider, active patient count by insurance payer, the seller's planned transition involvement, and the lease structure of the office space. These were not questions the generalist bank had asked.
The specialist reviewed the practice management software reports — Dentrix in this case — and was able to independently verify the collection figures the seller had represented. They had a relationships with dental practice appraisers and were able to move the valuation forward quickly. They also knew how to structure a seller note correctly — the seller agreed to carry 10% on standby, reducing the buyer's cash requirement at closing.
The seller financed a $95,000 subordinated note on full 24-month standby. The SBA 7(a) loan covered the remaining $855,000. The buyer's cash at closing was $95,000 — the minimum 10% equity injection. Total debt service on the acquisition loan came in above the 1.25x DSCR threshold comfortably when analyzed against the practice's actual collection history.
From the first engagement with the specialist lender to closing: 60 days. Including the two months spent with the generalist bank, the total timeline was approximately 4.5 months — but the 2 months with the wrong lender produced nothing except credit inquiries and frustration.
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