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So I was reading the "Lets buy a Dental Practice" thread by Hammer and it was pretty interesting but I still have a few questions about the whole process.
Is it feasible for a new grad 1 year out of Dental School to buy a million dollar practice and would a bank loan over 700k for that purchase? I feel like this is something everyone would do if that was the case. Could a new grad produce at a high enough level to keep pace for a million dollar year? And would you need a down payment while purchasing a practice or can you walk into the bank with $0 and they would be willing to lend?

As for purchasing the the entire practice tax deductible? Hammer was showing examples in which he paid his practice loan pre-tax. An example would be a million dollar practice bringing in 350k for the dentist, but the dentist has to pay around 100k(with interest) in the dental practice loan. Can he pay all of that including interest before taxes or is it only the interest that is tax deductible. Because you can potentially save 50k+ in your pocket if the entire payment is pre-tax.


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Jun 9, 2015
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I studied finance in undergrad and have aggressively researched this topic, however I'm not an accountant and you shouldn't take this as the absolute truth or whatever legalese I'm supposed to say..

Generally interest on a business loan can be included as a business expense and excluded from tax, but the principle portion of your payments are not tax deductible. Don't confuse this with student loans! Interest on those over a certain income threshold are not tax deductible.

You're going to need a certain % of the purchase price in liquid assets (Wells Fargo quoted 5%) and you need a loan to income ratio that makes sense for the bank, good credit and a history of production that supports your purchase of the practice. So, big student loans / pricey cars etc are going to hamper your ability to borrow $ for a practice.

Moral of the story, it's complicated and you're going to want to talk to an accountant and the banks.
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