Selling your dental practice to an associate or another dentist

Dentists who buy a practice rely heavily on bank financing, an ADA career article notes, so the buyer's lender shapes your deal almost as much as the buyer does. If an outside dentist buys your whole practice with an SBA 7(a) loan, SBA's current rules (SOP 50 10 8.1) cap debt for the business purchase at the lender's independent valuation, rule out an earn-out and let you stay only as a consultant, for up to 24 months.

Last updated October 14, 2026

This guide is general information about selling a dental practice to another dentist, not legal, tax or financing advice. The SBA rules are from SOP 50 10 8.1, effective October 1, 2026, and state rules differ, so confirm how they apply to your sale with your attorney, your CPA and the buyer's lender.

Which dentists buy practices now?

Your associate or an outside dentist, who may be buying a first practice after years as an associate or in a DSO. A dental CPA quoted by ADA News in December 2024 described three ways to sell: to an outside dentist, to an associate or to a DSO. BizBuySell notes that new owners of dental practices are “often limited to qualified dentists.” We found no published data on how dental practice sales split between those buyers. This guide covers the first two; selling a dental practice to a DSO covers the third.

Fewer dentists own, and they own later

Among dentists in private practice, 72.5% owned their practice in 2023, down from 84.7% in 2005, according to the ADA Health Policy Institute. HPI reported in June 2025 that ownership is coming later: 21% of dentists who graduated from 2016 to 2020 owned a practice 3 to 7 years out, against 63% to 70% of classes from 2010 or earlier at a comparable stage.

HPI counts partners and shareholders as owners. It says its data suggest ownership is still the career “end game” for most dentists, and cautions that it cannot yet tell whether recent graduates will catch up.

Most new dentists start as associates

In ADEA's survey of 2025 dental school seniors, 77% of those planning to join private practices expected to start as associates, and 32% of those entering private practice right away planned to join a DSO. Those are plans at graduation, not careers. In 2024, 15% of dentists less than 10 years out of dental school practiced solo and 27% were affiliated with a DSO, per the ADA Health Policy Institute. If you employ an associate, they may be a natural buyer: they already know your patients, your hygiene team and your fee schedule.

Many start with heavy student debt

In the same ADEA survey, published in January 2026, 82% of responding seniors graduated with education debt, and those with debt averaged $297,800. That is debt at graduation, not when a dentist buys, but it sits in the same household budget as the practice loan.

The ADA's 2013 valuation guide describes the test a typical buyer applies: the practice's revenue has to cover its expenses, a reasonable salary for the buyer and the principal and interest on the purchase debt. If your price fails that test for a particular dentist, expect the buyer or the lender to push back on it.

How does another dentist pay for your practice?

Mostly with a loan. ADA guidance written for buyers says “most banks will not lend more than 85% of the prior year's collections”.

What dental lenders advertise

Lender pages, accessed October 2026. Marketing copy, subject to credit approval; “up to” means not every buyer qualifies.
Lender	Advertised terms
Bank of America	Up to 100%, by loan type; 5 to 15 years; 6 to 12 months interest-only
Provide (Fifth Third Bank)	Up to 100% for acquisitions; working capital; 6 months interest-only

The ADA's 85% is measured against a year of collections, not the purchase price. What matters most to you is the kind of loan. A conventional dental practice loan follows the bank's own terms; an SBA 7(a) loan follows SBA's rules, which limit how you can be paid and whether you can keep practicing. Ask a dentist buyer which kind in the first serious conversation, and ask for the lender's name.

What do SBA 7(a) rules mean for you as the seller?

They decide how much of your price can be borrowed, how you can be paid and whether you can stay. SOP 50 10 8.1 took effect on October 1, 2026, per SBA Information Notice 5000-880695 (August 14, 2026). It applies to 7(a) applications that receive an SBA loan number on or after that date; applications submitted through September 30, 2026 stay under SOP 50 10 8. If your buyer's file was already in process, ask the lender which version governs it; the June 1, 2025 version of SOP 50 10 8 capped a seller's consulting period at 12 months, not 24.

SBA 7(a) rules when an outside dentist buys

SBA SOP 50 10 8.1 (Appendix 15 and Section A), effective October 1, 2026, for an Initial Acquisition, SBA's default category. SBA 7(a) loans only; conventional dental loans set their own terms.
Rule	SOP 50 10 8.1
Buyer equity	At least 10% of total project cost; cannot be waived
Your note as equity	Full standby for the life of the loan; up to half the required equity
Debt for the business	Capped at the lender's independent valuation; real estate excluded
Earn-out	Not allowed; no price tied to later collections
Your role after closing	Consultant only, up to 24 months in total
Repayment	Business portion over 10 years at most; no balloon
Debt service coverage	At least 1.25:1
Owners and guarantors	U.S. citizens or nationals living in the U.S.

The price has to appraise

On an SBA deal, the lender orders its own independent business valuation and may not use one prepared for you or for the buyer. Above a business purchase price of $350,000 the appraiser must hold one of five credentials (ASA, CBA, ABV, CVA or BCA); at or below it, the lender may value the practice itself unless buyer and seller are closely related. Debt for the business purchase, including any seller note not on full standby, is capped at that valuation, and any price above it must be covered by equity, which can include a seller note on full standby.

The valuation and the business purchase price leave out owner-occupied real estate, which is appraised separately. If the buyer also buys your office building in the same loan, only the real estate portion may run past 10 years, up to 25. When the business purchase price is $3 million or more, not counting owner-occupied real estate, an outside buyer's lender also needs a Quality of Earnings report with a cash proof. This is where a friendly price can come apart: you and an associate you trust can agree on a number the lender's appraiser will not support.

Your seller note may not pay you for years

A seller note counts toward the buyer's required equity only if it is subordinated to the lender and on full standby, with no principal or interest paid for the life of the 7(a) loan, and notes like this can supply no more than half of the required equity. Because the business portion of the loan can amortize over up to 10 years, a note on full standby could mean a long wait for your first payment. A note that pays you currently is allowed, but it is not equity, and it counts toward the debt cap set by the valuation.

Ask your CPA about tax before you agree to carry a note for a dentist buyer. Under IRS Publication 537 (2025), a seller paid over time may be able to report gain as payments arrive under the installment method, but sales of inventory cannot be reported that way. Depreciation recapture, including section 179 deductions, is reported in full in the year of sale even when you are paid over time.

Our reading, not the IRS's: if you expensed chairs, imaging and other equipment, you could owe tax on that recapture for the year of the sale while your note sits on standby. Whether the supplies in your operatories count as inventory is a question for your CPA.

When the buyer already owns a practice

An outside dentist buying through an existing practice may qualify as a Business Expansion. Under SOP 50 10 8.1, the buyer's practice must have operated for at least two full fiscal years under its current ownership and must buy 100% of yours. It also needs no negative net worth at its last fiscal year-end, enough liquidity and the same four-digit NAICS industry group as your practice, which two dental offices share.

The lender may then reduce or eliminate the 10% equity, and minimum debt service coverage is 1.15:1 instead of 1.25:1. SBA's size standard for dental offices (NAICS 621210) is $9.0 million in average annual receipts (13 CFR 121.201, current as of October 2026), and the buyer and your practice combined must meet it.

Green card holders cannot use a 7(a) loan

Under SOP 50 10 8.1, every direct and indirect owner of the borrowing practice and every guarantor SBA requires must be a U.S. citizen or U.S. national living in the United States; lawful permanent residents are ineligible. If your associate holds a green card, ask early whether their lender offers a conventional dental practice loan; the SBA rule does not govern those.

Can you sell to your associate with an SBA loan?

Yes, and possibly on easier equity terms if your associate buys your ownership interest rather than your practice's assets. Under SOP 50 10 8.1, a single owner selling 100% of the ownership interest to someone employed by the practice for at least the 24 months before the application may qualify as an Existing Owner Buyout.

In that category the 10% equity injection is measured against the purchase price, and the lender may reduce or eliminate it. It must first find that the buyer has enough liquidity and working capital, and the applicant's balance sheet must not have shown negative net worth at its last fiscal year-end. Minimum debt service coverage is still 1.25:1, and no Quality of Earnings report is required. Three details decide whether your associate fits:

It must be a sale of your ownership interest. SBA defines an Owner Buyout as one that does not involve buying another entity or assets, and it lists an asset purchase by another business under Initial Acquisition. If your associate forms a new entity to buy your practice's assets, it would likely be an Initial Acquisition, though the lender decides.
“Employed” means what the lender says it means. The SOP does not say whether an associate paid as an independent contractor counts, so have your associate ask the lender before you plan around this path.
Under 24 months changes the rules. If your associate has worked in the practice for less than 24 months, the sale is processed under the Initial Acquisition standards, including the 10% minimum equity that the lender cannot waive.

The SOP's rule that a seller cannot stay on as an employee names Initial Acquisitions and Business Expansions. It does not address an Existing Owner Buyout, so ask the lender how it treats your role after an associate buys you out.

Base the buy-in price on a professional valuation

The ADA's 2013 valuation guide says an option agreement can let an associate buy into the practice at a future date, and that it is prudent to base the price in such agreements on a professional valuation. It warns that writing a rule of thumb, such as a percentage of gross revenue, into a buy-sell agreement has led to a surviving partner paying a deceased partner's estate substantially more than fair market value.

If your associate is the likely buyer, have your attorney put the option, the valuation method and the timing in writing years before you plan to stop practicing.

How do partner buy-ins and partial sales work?

A partial sale lets an associate become a co-owner while you keep treating patients. A 7(a) loan can fund a partial sale in which at least one original owner stays, and the selling owner may remain as an owner or employee. It is one SBA structure among several, and it carries conditions:

If you keep less than 20%, you must personally guarantee the full loan amount for at least two years after final disbursement.
SBA generally requires every owner of 20% or more after the sale to guarantee the loan in full, and any new owner taking any stake, even 1%, must be a co-borrower.
In an Owner Buyout, people not employed by the practice for 24 months may acquire less than 50% and cannot become the largest shareholder.

A bank buy-in loan is the other route. Panacea Financial says its partner buy-in loan does not require a lien on the existing practice, its real estate or its equipment. Who may hold shares in a dental entity is a question of state law, and SBA asks lenders to document that a licensed business's ownership meets state requirements. Who can own a dental practice covers the state rules we checked.

Put a buy-sell agreement in place

Once you have a partner, the ADA's 2013 guide says a buy-sell agreement can provide for a purchase if an owner dies or becomes disabled. Have your attorney draft it at the buy-in, while you and your new partner want the same thing.

Can you keep practicing after you sell?

It depends on how the buyer pays. An ADA career article describes a common arrangement in which the buyer purchases 100% of the practice and you stay on as a paid associate, often two or three days a week, usually for one to three years by agreement.

If the buyer uses an SBA 7(a) loan for an Initial Acquisition or a Business Expansion, you may not remain as an employee, and the practice may hire you as a consultant for up to 24 months in total, including extensions. The SOP does not say whether a consultant may treat patients, so settle that with the buyer's lender before you agree on a price.

If you would rather not stay at all, a sale to another dentist can be the cleaner exit. ADA News reported in December 2024 that some DSOs want the selling dentist to stay three to five years, and the dental CPA it quoted says many dentists do not want to stay on after selling, so a DSO is sometimes not an alternative for them.

Non-competes

Expect a dentist buyer to ask you not to open a practice nearby. The FTC's nationwide non-compete rule was stopped by a federal court in August 2024 and removed from the Code of Federal Regulations in February 2026, and the FTC can still challenge unreasonable non-competes case by case. In our reading, that leaves non-competes in practice sales and associate contracts to state law.

California voids employment non-competes (Business and Professions Code 16600, as amended effective January 1, 2024), but section 16601 lets a seller of goodwill, or an owner selling all of their ownership interest, agree not to compete within the area where the business was carried on.

In Texas, Business and Commerce Code 15.501 covers non-competes relating to the practice of dentistry with Texas-licensed dentists, entered into or renewed on or after September 1, 2025. Such a non-compete is unenforceable unless it has a buyout of no more than the dentist's total annual salary and wages, expires no later than one year after the contract or employment ends, covers no more than five miles from where the dentist primarily practiced, and is clearly and conspicuously stated in writing.

Section 15.501 has no sale-of-practice exception, and whether it reaches a covenant you sign as the selling owner, rather than as an employee, is a question for Texas counsel. If you stay on as an associate, you may sign one covenant in the sale and another in your employment agreement; have counsel in your state review both.

How do payers, records and staff move to the buyer?

Each dental plan credentials the buyer separately, and the charts and your team need their own terms in the sale, so start before closing day.

Dental benefit plans. Ask each carrier how it handles a sale. Delta Dental of California and its affiliates use a Notice of Sale of Practice form. The form says Delta payments for services dated on or before the sale date are issued in your name, and that claims after it are payable to the buyer under the buyer's own participating agreement, or to the patient if the buyer has none. An assignment section covers a buyer who purchases your receivables.
Credentialing. Delta Dental of Tennessee says initial credentialing can take up to 30 days, claims are processed as non-participating until then, and approval is not back-dated. Have your buyer apply as early as each plan allows.
Delta Premier. One national practice transitions firm, Henry Schein Dental Practice Transitions, reports that any change in ownership, full or partial, has triggered Delta Dental to move a practice's providers from Premier to PPO at the lower fee schedule. Check how many of your patients are on Premier, and ask your own Delta company how it treats a sale.
Patient records. The ADA suggests that keeping the original charts and giving the buyer copies gives you the best malpractice protection. If the buyer takes the originals instead, it suggests a contract that requires the buyer to keep them for at least 10 years and gives you access. That is guidance, not law.
State record laws. Illinois law (225 ILCS 25/50, as amended effective January 1, 2024) requires dental records to be kept for 10 years and makes them the property of the office in which dentistry is practiced. Retention periods and who owns the charts vary by state, so confirm yours with counsel.
Associates and hygienists. Attorneys writing in the AAPD's Pediatric Dentistry Today (Q1 2026) advise sellers to keep key staff such as office managers and high-producing associates, possibly with bonuses, and to have a staff census ready with each person's hire date, position, pay, benefits and contract status. Hygiene staff matter here: in April 2026 the ADA Health Policy Institute reported that only 60% of dentists had enough hygienists on staff.

The dental practice due diligence checklist covers the regulatory filings that come with a change of ownership.

What should you prepare before you talk to a dentist buyer?

Start with what a valuation needs. The ADA's Valuation Document Checklist tells an owner to have these on hand before a valuation:

Five years of financial statements and tax returns.
Five years of new patient flow, collections and production.
Dentist and hygiene production, with monthly hours worked.
Your fee-for-service to managed care ratio.
Active and inactive patient counts.
Services offered and referred out, by treatment code (CDT).
Your recare percentage.
Equipment and fixtures, with age and condition.

A dentist buyer will also ask the questions ADA guidance for buyers tells them to ask: production and collections by doctor and by hygienist for five years and year to date, new patients per month, how your recall system works, whether your fee schedule is competitive and when you last updated it, which procedures you refer out, which insurance plans you accept, and to review some charts once they sign an NDA.

What a buyer may see in patient charts, and when, is a HIPAA and state-law question for your attorney; the due diligence checklist covers it.

If the buyer uses an SBA 7(a) loan, the lender needs your financial statements for the last three complete fiscal years, signed or certified by you within 120 days before submission, plus interim statements no older than 120 days. The lender then checks your numbers against IRS tax transcripts, including a selling sole proprietor's Schedule C, and reconciles any differences before the first disbursement. If your practice P&L and your filed returns tell different stories, have your CPA reconcile them before a buyer's lender does.

To see what your practice could sell for, request a free, confidential valuation. It is not an appraisal, a price to write into a buy-in or buy-sell agreement, or the valuation an SBA lender relies on. Requesting a valuation does not list your practice, and details about it are not shared with prospective buyers without your permission.

How long does a sale to another dentist take?

About a year, in the estimate of one dental CPA quoted by ADA News (December 2024). Dental practices sold on BizBuySell from 2021 to 2025 had a median of 215 days on the market. Days on market start at listing, so they leave out your preparation. Live Oak Bank's general page on business acquisition loans says such a loan takes 60 days on average to fund, depending on customer readiness and real estate involvement.

Start payer credentialing and the records agreement early. How to sell a dental practice lays out the full sequence, and how much a dental practice is worth covers sale prices and how buyers value a practice.

Sources

All sources accessed October 14, 2026.

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