How cash flow works in a dental practice
Dental revenue usually comes from several directions at once: insurance claims, the patient's share after benefits, in-house membership plans, and third-party patient financing. Each arrives on a different schedule. Hygiene recall provides a steady base; restorative and elective treatment is lumpier.
Treatment plans and timing
Larger cases are often accepted as a treatment plan and completed over several visits. Lab fees, materials and chair time are spent along the way, while payment may be split between insurance, a patient deposit and the balance at completion. Patients with annual benefit maximums sometimes stage treatment across plan years, which spreads collections further. A full schedule can still feel tight when several large cases are in progress.
Equipment: financing or working capital?
Dentistry is equipment-heavy. CBCT imaging, intraoral scanners, milling units and new operatories are expensive and are expected to last for years. That matters when choosing how to pay for them. Equipment financing and leases spread the cost over the useful life of the asset and use the equipment itself as collateral. A working capital advance is repaid over a much shorter period, so using it for a long-life asset compresses years of value into months of payments.
Working capital can make more sense for the costs around a purchase that equipment financing will not cover — installation, training, the marketing to launch a new service, or the staff hours needed while the team gets up to speed.
Associates and competition
Hiring an associate is one of the larger decisions an owner makes. Compensation starts immediately, while the associate's production builds as the schedule fills and, where relevant, as insurance participation is set up. Independent practices also compete with group practices and DSOs that may advertise heavily or offer extended hours, so owners often invest in marketing, technology or a refreshed office to keep pace.
For help sizing an investment like an associate hire or a new operatory, see how to plan a growth investment.
What PracticeFloat reviews
- Revenue history and bank-statement activity — the deposits reaching your business account and how steady they are.
- Time in operation.
- Existing advances and obligations already debiting the account.
- NSF and negative-balance history.
- Specialty and use of funds — what kind of dental practice you run and what the funds will be used for. If the request is related to equipment, it helps to explain why working capital rather than equipment financing suits the purchase.
- Owner guarantee — a personal guarantee from the owner is generally required.
The current published criteria are on the homepage under who qualifies; we keep them in one place so they stay accurate.
What you’ll need
You do not need everything to submit an inquiry. The practice review page lists what is typically requested:
- Recent business bank statements
- Existing funding contracts and payoff letters, if applicable
- Practice name and legal entity details
- Owner identification
How the process works
- Inquiry. No hard credit pull to submit an initial inquiry. An inquiry is not an application approval.
- Document review and underwriting. Later underwriting steps may include credit review, depending on the product and funder.
- Written offer. If one is available, it shows the amount, total repayment and payment schedule.
- Signing. Review the agreement, ideally with your accountant or attorney, and sign only if it works for you.
- Funding. Timing depends on verification and on the funding party.
PracticeFloat aims to respond within one business day of a complete inquiry — a target for a first reply, not a promise of a decision or funding. Terms, timing and the funding party depend on whether the transaction is funded by PracticeFloat or a partner funder. See how the process works.
Cost and repayment
Advances are commonly priced with a factor rate: the total repayment is the advance amount times the factor rate, fixed in the agreement. Repayment is made through scheduled daily or weekly ACH debits; the schedule and total repayment amount are disclosed in the agreement before signing.
Costs are typically higher than SBA or bank loans, and because the balance is repaid quickly, the annualized cost is higher than "factor cost divided by years" suggests. For example, an illustrative factor rate of 1.22 repaid over 6 months works out to roughly 82% on an annualized basis (illustrative, not PracticeFloat's pricing). This is educational, not a regulatory APR disclosure.
When comparing against an equipment loan or lease, compare the total repayment amount and the size of each payment, not just the headline rate.
Read how much practice funding costs, or model scenarios with the illustrative calculator (examples, not a quote).
When this may not be the right fit
- The purchase is long-life equipment or real estate. Equipment financing, or an SBA 504 loan, is usually a better match. SBA 504 loans are designed for real estate and long-life equipment, carry 10, 20 or 25-year maturities, are available through Certified Development Companies, and cannot be used for working capital or inventory (SBA: 504 loans).
- You are buying a practice or buying out a partner. Acquisitions are typically financed over many years, for example with an SBA 7(a) loan or a bank acquisition loan, rather than with a short-term advance. See the healthcare business loans guide.
- Cash is tight because collections are lagging. If patient balances and unbilled claims are building up, tightening financial policies and follow-up may release cash without any financing cost.
Frequently asked questions
Should I use a working capital advance to buy a CBCT or intraoral scanner?
Usually equipment financing, a lease or an SBA 504 loan is a better match for equipment with a long useful life, because the payments are spread over years. A working capital advance may be more useful for the costs around the purchase, such as installation, training and marketing a new service.
Can an advance help fund hiring an associate dentist?
It can be used for associate onboarding costs. Because an associate's production usually builds over time while compensation starts right away, plan for scheduled debits to begin before the new schedule is full.
Does membership-plan or patient-financing revenue count?
Underwriting generally looks at the deposits that reach your business bank account, which can include insurance payments, patient payments, membership fees and patient-financing payouts. How each revenue stream is weighed is determined during underwriting.
Is a working capital advance a good way to buy a practice?
Generally not. Practice acquisitions and partner buyouts are usually better suited to long-term financing such as an SBA 7(a) or bank acquisition loan. A short-term advance compresses repayment into a much shorter period.
How is repayment handled?
Repayment is made through scheduled daily or weekly ACH debits. The schedule and total repayment amount are disclosed in the agreement before signing.