How to Finance a Dental Practice Purchase in Canada (2027)

By Jatin Dua · Broker of Record, RE/MAX Quantum Realty · Updated 2 November 2026 · 10 min read — What Canadian banks lend to buy a dental practice, the cash you still need, what lenders ask for, and how the lease limits the loan.

This guide is for dentists and associates in the GTA who want to buy a practice and need to know how the money works. You will see what Canada’s big banks say they lend, how much of your own cash you still need, what lenders ask for, what the payments look like, and how the lease and deal structure change the loan.

How do you finance the purchase of a dental practice in Canada?

Most buyers use a practice acquisition loan from a bank with a dedicated dental or healthcare team. These loans are different from a mortgage. The bank is lending mostly against the practice’s cash flow and goodwill, not against a building. Dental lending is a specialty at the big banks, and their published ceilings are high.

A typical package has three parts: a term loan for the purchase price, an operating line of credit for day-to-day cash flow, and sometimes a separate loan for equipment, renovations or the building. Some buyers add a government-backed loan or ask the seller to finance part of the price. I am a commercial broker, not a lender or accountant, so treat this as a map of the options to take to your bank and your advisers.

How much will a bank lend to buy a dental practice?

Here is what three big-bank pages say as of November 2026. These are published ceilings and features, not offers. Every bank says approval depends on its credit criteria.

Source: TD, Scotiabank and CIBC dentist and healthcare financing pages, checked November 2026. Subject to each bank’s credit approval.

The 12-year amortization on TD’s page is the figure I would anchor on for a goodwill-heavy purchase. A practice loan is usually repaid much faster than a building loan, which is why the monthly payment surprises people.

How much cash do you need to buy a dental practice?

“Up to 100% financing” does not mean zero cash. A 2026 guide on a BMO Nesbitt Burns advisor blog suggested buyers have cash savings of roughly 10% to 20% of the purchase price to cover any down payment, working capital and surprises. You also need money for legal and accounting fees, any landlord deposit on the lease assignment, and a cushion for the first months while insurance claims and patient payments catch up.

The operating line helps with that cushion. CIBC says operating line limits usually equal about 1.75 times monthly revenue, and interest is charged only on what you draw. CIBC also warns that leaning heavily on the line can look like a cash flow problem to the bank.

What do lenders ask for before approving a dental practice loan?

Expect a full file, both on you and on the practice. Based on the bank pages and the BMO Nesbitt Burns guide, lenders typically look for:

• Your licence and history. Scotiabank’s program, for example, is for dentists with a DDS or DMD licensed in a Canadian province or territory.
• Personal credit. CIBC notes that using more than 75% of revolving credit, such as a line of credit, will hurt your credit score.
• The practice’s financial statements and tax returns, the signed letter of intent or offer, and the lease.
• A business plan. For a start-up, CIBC asks for three to five years of financial projections.
• Security. CIBC lists a general security agreement over inventory, equipment and receivables, an assignment of life insurance, personal guarantees from all owners, proof that personal taxes are paid, and fire insurance with the bank as first loss payee.

The BMO Nesbitt Burns guide says dental lenders typically approve a clean file in two to four weeks, that personal guarantees are standard, and that spousal guarantees are sometimes required.

Before you talk to a lender, it helps to know whether the asking price is in a sensible range. Try the estimator below.

What will the monthly payments be on a dental practice loan?

The payment depends on the rate, the amortization and any deferral. As of November 2026, prime at the big banks is 4.70%, after the Bank of Canada raised its policy rate to 2.50% on 28 October. The table below is my own arithmetic for a $1,000,000 loan with monthly payments. The rates are examples only, not a quote from any lender.

Source: my calculation using a standard loan formula. Prime rate from the big banks’ 29 October 2026 change. Your rate, fees and term will differ.

For comparison, the BMO Nesbitt Burns guide put combined debt service on $1 million of acquisition debt at roughly $5,000 to $7,000 a month. My numbers at a 12-year amortization come out higher, which shows how much the amortization and any principal deferral matter. Ask each lender for a written payment schedule, and check it against the practice’s real cash flow after your own pay.

Variable rates move with prime. The Bank of Canada said further increases could be needed, and its next decision is on 9 December 2026. Ask your lender whether you can fix part of the loan.

Why does the lease decide how long your loan can be?

This is the link most buyers miss. CIBC’s dental finance page says a practice loan typically will not run longer than the remaining term of the lease. A 2025 Oral Health article by a dental lawyer said buyers typically need 10 to 12 years free of demolition or relocation clauses to get bank financing. If the practice you want has three years left and no renewal, your bank may shorten the loan or refuse it, which raises the payment sharply.

Get the lease early, check the remaining term and renewal options, and ask whether the landlord will grant a new lease or extension on assignment. My guide to commercial lease clauses in Ontario explains the key terms, and the lease review condition gives your lawyer time to check them before the deal is firm.

Can you use a government-backed CSBFP loan for a dental practice?

Yes, but it is small next to most GTA practice prices. Innovation, Science and Economic Development Canada says the Canada Small Business Financing Program allows up to $1.15 million per borrower in total. Term loans can be up to $1,000,000, of which no more than $500,000 can go to leasehold improvements and equipment, and within that, no more than $150,000 to intangible assets and working capital. Lines of credit can be up to $150,000.

The program charges a 2% registration fee, which can be financed, and caps interest at prime plus 3% on floating term loans and prime plus 5% on lines of credit. Businesses must have gross annual revenue of $10 million or less. Because goodwill is an intangible asset, the $150,000 sub-limit is the one that bites in a practice purchase. My guide to what you actually buy in an Ontario dental practice covers this cap in more detail.

Should the seller finance part of the price?

Sometimes. A seller who carries part of the price, through a vendor note or a vendor take-back, lowers what you borrow from the bank and keeps the seller invested in a smooth handover. Your bank will want to know about any seller financing and may require it to rank behind its own loan, so raise it early. My post on vendor take-back mortgages in Ontario explains how they work for property; the same ideas of security, interest and default apply to a business note. Your lawyer should draft any seller financing.

Does an asset or share purchase change the financing?

It can. In an asset purchase, the bank takes security over the assets you buy, as CIBC’s list of usual security shows. In a share purchase, you buy the seller’s corporation, including its history and liabilities, and the bank will want comfort on those. The structure also changes your tax position on goodwill and equipment. Settle the structure with your accountant and lawyer before you finalize the loan, and confirm the tax effect with your accountant. My post on asset sale vs share sale explains the basic trade-off using restaurants.

What to do next

1. Pull your credit report and pay down revolving balances before you apply.
2. Gather two to three years of the target practice’s statements, the lease and the offer terms.
3. Ask two or three dental lenders for written terms, including amortization, deferral and security.
4. Have your accountant test the payment against the practice’s cash flow after your own pay.
5. Book a call with me to review the lease and the premises side of the deal before you commit.

Frequently asked questions

Sources

• TD: Banking for healthcare professionals
• Scotiabank: Business banking advice and solutions for practising dentists
• CIBC: Dental finance
• BMO Nesbitt Burns (Surcon Mahoney Wealth Management): The complete guide to buying a dental practice in Canada (2026)
• ISED: Canada Small Business Financing Program, helping small businesses get loans
• Oral Health Group: How landlords take advantage of dentists (2025)

Related reading

• How to Sell a Dental Practice in Ontario: A Step-by-Step Guide (2027)
• How Much Is a Dental Practice Worth in Ontario? (2027)
• Dental Practice for Sale in Toronto and the GTA: How to Find One (Including Off-Market)
• Start a Dental Practice or Buy One? Ontario Costs Compared (2027)