100% Dental Practice Financing vs. an SBA Loan

Compare the proposed loans, not their labels

“100% financing” describes a funding share. SBA identifies a loan program. They are not opposite ends of one scale. Before making a choice, obtain the actual amount, eligible uses, fees, rate basis, payment schedule and conditions for each proposal. A headline cannot supply those terms.

Bank of America's dental lending page, reviewed September 16, 2026, advertises up to 100% financing depending on the financing sought. It says terms, rates, amounts and repayment features depend on credit and loan factors. Its published description is conditional; it is not a quote for this purchase.

The Huntington dental lending page also lists possible full financing, fixed rates, and deferred or interest-only options. Lending requires an application and approval. Those features show why a comparison needs the complete payment schedule rather than the initial payment alone.

Use the 100% acquisition financing guide to reconcile which costs a proposal covers. This comparison takes the next step: once the funding terms are defined, what do they mean over the same period of ownership?

Establish whether both routes are available

The SBA overview describes a lender guarantee program that can support ownership changes. Eligibility includes inability to obtain the desired credit on reasonable terms from nongovernment sources, creditworthiness and repayment ability. A buyer cannot assume an SBA option remains available merely because it looks attractive beside a conventional quote.

Ask the lender to resolve that threshold before treating two worksheets as two available choices. A comparison can help frame questions even when one path is later ruled out. It should not conceal the reason for that rejection or imply that a broker can waive a program condition.

Date the policy review. The SBA version index, reviewed September 16, 2026, lists SOP 50 10 version 8 effective June 1, 2025 and version 8.1 effective October 1, 2026. The index alone does not establish the rules for a specific application. Have the lender identify the governing version and notices.

For a separate, dated program example, read the SBA acquisition guide. Recheck its policy assumptions before using them for a later loan. The arithmetic below does not calculate a statutory injection or an SBA guarantee fee.

Put both proposals on a common basis

Use the same purchase scope and operating-fund need. Keep the building outside both proposals unless both include it. Confirm whether fees are paid in cash or added to principal. Then choose a comparison date that fits the decision, such as a planned ownership review or possible refinance.

This sheet is a comparison tool, not an approval. The underwriting guide addresses whether the borrower and practice support the debt. A lower cost loan still fails the purchase decision if its conditions cannot be met or its payments do not fit.

Worked example: the smaller payment is not the lower cost

All numbers in this case are invented teaching assumptions. Neither column is a bank quote, an SBA policy calculation or a claim that both routes would be available to one borrower. Suppose the same practice project needs $900,000 before financing fees. Both hypothetical loans amortize fully through 120 equal monthly payments.

Proposal A funds the whole project. Proposal B represents a possible SBA-labeled term sheet for comparison purposes, with a supplied cash contribution and fee allowance. Those supplied amounts do not establish program compliance. Fees are paid separately in cash and are not financed. There is no seller note, balloon, other debt, tax benefit or investment return in this case.

Proposal B has the smaller monthly payment because it finances less principal, despite its higher assumed rate. It also uses $105,000 more initial buyer cash. Comparing the payment alone hides both that cash difference and the higher financing cost over the stated period.

The table uses unrounded calculations before display rounding. With monthly rate r, principal P and n payments, the payment is P × r ÷ [1 − (1 + r) to the power −n]. The remaining balance reflects payments already made, not a new estimate of the practice's value.

Separate principal repayment from financing expense

At the review date, the buyer still owns the same assumed project. Initial contribution and principal repayments have reduced what is owed. They are cash uses, but treating all of them as interest would misstate the comparison. Conversely, counting only payments ignores the remaining debt.

Use two views. The liquidity view totals the cash required at each date and checks the lowest remaining balance. The financing-cost view separates interest and fees from principal. Neither view replaces the other: money tied up in a contribution cannot also cover payroll or household needs.

For a useful cross-check in this simplified case, add initial buyer cash, the first 36 payments and the remaining balance. Subtract the common $900,000 project cost. The result equals interest plus fees for each column. That identity prevents a smaller ending balance from being treated as a free benefit while ignoring the contribution that helped create it.

This is a nominal comparison, without discounting or tax effects. It is not a full investment return. Use a dental CPA for the actual tax treatment and a consistent discounting method if timing is material. Do not insert an assumed return on retained cash to make a preferred proposal win.

Test a payment reset before choosing a variable rate

SBA explains that a variable-rate loan's payment may change when its rate changes. The program overview distinguishes that behavior from a fixed-rate payment. Obtain the actual index, margin, reset dates, caps and recalculation method from the lender.

For an independent sensitivity, reset Proposal B after 24 payments. Its calculated balance is about $702,922.77. Assume the annual rate then becomes 11.5%, and the balance amortizes through the remaining 96 months. The new monthly payment is about $11,232.27. This is a hypothetical reset, not an interest-rate forecast or a contractual description of an actual SBA loan.

That payment is higher than Proposal A's fixed base payment. The example shows why the first payment cannot settle a long-term comparison. Test a supported lower-cash case at the same time, without assuming revenue will automatically rise when debt service does.

The loan payment calculator can help examine a fixed amortizing segment. Confirm that its inputs match the segment being tested. It does not read a lender contract or decide whether a reset, fee or guarantee is valid.

Include the conditions that the spreadsheet cannot price

Ask who guarantees each loan, what collateral is pledged, and which events trigger a default. Have counsel review restrictions on distributions, additional borrowing, ownership changes and a future sale. Do not assign a dollar value to a restriction until its actual scope is clear.

Record expiry dates and dependencies. A proposal may depend on a lease, acceptable valuation or final records. A promised closing date is not a substitute for written conditions. If one proposal requires a transaction change, model that revised transaction consistently rather than attaching it to the old project budget.

For a refinance or sale scenario, request a dated payoff estimate and identify each possible release or prepayment charge. The balance in this example is scheduled principal only. It is not a lender payoff letter and contains no assumption that a real loan can be retired without additional cost.

Summary: make the comparison a decision record

Prepare a short recommendation that separates eligibility, liquidity, financing cost, payment risk and contract conditions. State which proposal is still indicative, what would change the conclusion, and who must resolve each open point. Keep the supporting schedules beside that record.

Use the working-capital guide for dated operating needs and the financing-options guide for the broader funding discussion. A loan comparison should help you ask better questions before committing to a practice. It should never turn an unapproved example into a financing promise.