Can I Borrow 100% Of The Money Needed To Buy A Dental Practice? (Part 2) with Kevin Saunders [CPD Available]

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What if the deposit that’s been holding you back from buying a dental practice wasn’t actually required? We unpack how first-time buyers can now secure 100% finance not just on property, but on goodwill too, thanks to a major shift in bank credit policy that lifts the goodwill cap to £750,000 per dentist. That change opens the door for solo and joint buyers to fund real-world practice prices, while still meeting the hard test that matters most: serviceability.

We walk through how lenders assess cash flow, why extending goodwill terms from 15 to 20 years can make the numbers work, and how pricing bands change with loan-to-value. Expect straight talk on margins over base, what a small deposit does or doesn’t do to your rate, and how development budgets fit in. If you plan to invest in equipment or upgrades, we outline the trade-offs between short-term development loans and including improvement capital upfront over a longer term to protect cash flow.

For current owners eyeing a second site, we explain how to release equity from existing goodwill or freehold to build a workable deposit and still leverage 100% funding on the new acquisition. We also explore the market backdrop: banks competing for healthcare clients, long-outdated caps finally moving, and what this policy “arms race” means for buyers ready to act. Throughout, we emphasise case-by-case modelling, realistic owner drawings, and the refinance play once performance lifts and leverage falls.

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Disclaimer: All content on this channel is for education purposes only and does not constitute an investment recommendation or individual financial advice. For that, you should speak to a regulated, independent professional. The value of investments and the income from them can go down as well as up, so you may get back less than you invest. The views expressed on this channel may no longer be current. The information provided is not a personal recommendation for any particular investment. Tax treatment depends on individual circumstances and all tax rules may change in the future. If you are unsure about the suitability of an investment, you should speak to a regulated, independent professional. Investment figures quoted refer to simulated past performance and that past performance is not a reliable indicator of future results/performance.

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Episode Transcript

Dr James (00:00):
My reason is that someone is a cabinet's owners to
talk about 100% common for themfacts that most of us are
trained to think we have to putsome level of deposit on money,
but actually more than 100% ofthe money is possible with
caveat.
We're going to be re-exploringthat today and also talking
about some of the things thathave changed in October 2025.

(00:20):
Looking forestest episode isever.
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(00:42):
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learning cycle.
We did a podcast not so longago on this, and it raised a few
eyebrows.
Had a few people message me tosay, is this possible?

(01:05):
Is this real?
And it is.
You can borrow 100% of themoney that you need to purchase
a dental practice.
But like most things in life,there's some small print, shall
we say, isn't there, Kevin?
It's not like anybody can justwaltz in and do this, but it can
be done.

Kevin (01:23):
Yeah, so within the guidelines of the bank's policy.
But important to say we've gotlive cases, um, well, live
cases, we've got cases that havecompleted over the last couple
of years where 100% has beenobtained at both goodwill and
property for first-time buyers.
So um, yeah, it's it's beenthere for some time.
Um, but we just have to workwithin the guidelines.

(01:44):
And maybe it's worth me justgoing over very briefly what we
spoke about last time.

Dr James (01:49):
I think so.
And just to clarify, byproperty, we mean freehold for
the practice, right?

Kevin (01:54):
Yeah, freehold or long leases.

Dr James (01:56):
Or long leases.
Good point, good point.
Yes, let's reiterate what wedid last.
Let's reiterate what we talkedabout last time just to set the
scene.

Kevin (02:03):
Fine.
Okay, so first of all, ifyou're an existing practice
owner, you can definitely get100% finance for the second
practice.
And you do this by raisingfinance against your any equity
in your goodwill on your firstpractice, or equity in the
property if you have some.
Um and you use that for thedeposit, and then you raise
money against the secondpractice as well.

(02:24):
So that's always been on thecards, and it's something we do
very regularly for existingpractice owners.
Um, so then really turning tofirst-time buyers, um, what we
were saying last time was yes,it's possible, up to a certain
cap.
Um, and again, we're going totalk about not the property,

(02:45):
there's always fundingavailable, 100% funding
available for a property that'sthat has value.
We're really talking about thegoodwill and where there's maybe
a lease of 15 years availablethere.
Um and on those kind ofscenarios, the banks were
capping at about £300,000 perdentist.

Dr James (03:05):
However, first time buyer, just to reiterate.

Kevin (03:09):
That's that's that's first-time buyers.
Yeah.
Yeah.
So for example, if I had a hada client looking at buying a
practice for £300,000 and aproperty for half a million, you
could get £800,000, 100% uh£800,000, uh, and they would
usually split it over 25 yearsfor the property and 15 years
for the goodwill on thepractice.

(03:29):
Wow.
So that was all good.
Um the big news, hot off thepress, is that um the um
property is still the same,still 100% of whatever the
property value is.
Um the goodwill now per dentisthas increased massively to
750,000.
So in theory, if you're lookingat a practice of 1.4 million

(03:53):
and there's two dentists, youcan get 100% of the goodwill
value plus the property value.

Dr James (03:58):
Just to reiterate, first-time buyer.

Kevin (04:01):
Yeah, first-time buyers, yeah.
I mean, as I say, it it it'snot an issue for existing
practice owners because they'vegot some equity already they can
use.
It's it's really first-timebuyers that this is important
for.
And why I think that's soimportant is that um, I mean,
there is a an average umpurchase price for dental
practice on the market, and itdepends who you talk to, is what

(04:22):
they say it is 1.1, 1.2 forgoodwill.
Uh goodwill only, that is.
I mean, I just look at whatcomes across my desk, and it
tends to be between the sort of600 to 1.2 million pounds for
goodwill.
Uh, and the reason that's sowide is you might have a dental
practice in the southwest that'sexactly the same as one in
London, but they're priced verydifferently.
Um, but so really it opens upthat um that average practice

(04:46):
purchase price if you've got twodentists buying, you
potentially they can get 100% ofall of that.
Um, obviously one dentist ontheir own can get up to 750, but
that still puts a lot ofpractices within their reach.

Dr James (04:59):
Wow, crazy.
That is that is fascinating.
So, really, what we're talkingabout today is most of relevance
to those first-time buyersbecause with the set with people
who already have practice andwhat have you, I mean, it's not
this is not uh anything new,really.
Or they could always they couldalways do this.
It was just whether or not theywere aware of it.

(05:20):
And to me, that makes moresense.
They already have an asset thatthey can borrow against.

Kevin (05:25):
Yes, I suppose where it does come into play with um
people buying the secondpractice is if they haven't
quite got enough equity in theirexisting practice and they need
700,000 for goodwill for asecond practice.
So that then it does um applyto them as well.
Um, but generally people buy apractice two or three years down

(05:46):
the line, they've they've grownthe uh the fees on their
existing practice, and sotherefore the goodwill value's
gone up as well.
So um so yeah, it also appliesto um existing practice owners.

Dr James (05:58):
But uh tell me this, why don't we not talk about
this?

Kevin (06:02):
Uh I think because up to now it's been reined in by the
fact that it was £300,000 perdentist.
So you've got you know, there'snot too many practices out
there that are just valued at£300,000 for a um one off
individual purchaser.
The rate's a bit higher aswell.
Uh should say that perhaps ifyou on the market you can get a

(06:22):
rate in the low twos overbase.
This is more like the lowfour's overbase.
But to my mind, if the bank'sbuying the asset for you 100%,
that's actually worth paying,you know, that extra interest
rate.
And actually you can you canrevisit that a few years later
when you've grown the goodwillvalue and it's no longer 100%
and refinance the loan even backto your existing bank.

Dr James (06:44):
Tell me this
deposit, would that take yourrate from 4% over base down to
2% over base?
Or do you have to put down alittle bit more of a deposit in
order to achieve that rate?

Kevin (07:01):
That's a really good question.
And the answer is it's a bitmore complicated than that
because the bank's pricedifferently.
So for some banks, if you're at90% loans of value, it might be
a little bit more expensive, itmight be top twos, and if you
drop down to 80%, it might bebottom twos.
Another bank might notdifferentiate, and they might
just say 90 to 95% is 2.3 overbase, and um you know 100% is

(07:27):
4.6.
So everything's plugged into apricing calculator, um, and that
church out the the price.
So we have we haven't got exactrates, but I think that's the
ballpark kind of figures.

Dr James (07:38):
Ah, I see.
So it's more nuanced than that.
It's on a bank-by-bank basis.

Kevin (07:44):
It is, yes.
One thing I do want to talkabout, because there is a caveat
to all of this, and that isserviceability of the loan.
Um, and you know, we are seeinggoodwill values jump up at the
moment, so it's getting harderand harder to get some of these
uh these propositions across thedesk with the bank because
you've got to prove that theloan's serviceable and that the

(08:04):
applicant can draw a salary aswell.
So um what we are seeing alittle bit of is movement
towards 20-year money from 15years on goodwill.
Uh property generally isstretched over 25.
Um, so that's I mean, it's beena thing with what at least one
of the banks for some time, andI can see other banks slowly
creeping towards that.

(08:25):
Because by doing that, it'llactually make the loan
serviceable and the wholeproposition works basically.

Dr James (08:34):
I see.
So this is very much just forthe purchase of the practice.
So if you wanted any additionalmoney to invest in the
practice, that would beadditional loans still.
Have I got that right?

Kevin (08:45):
Yes, that's correct.
Yeah.
Uh, and that depends on howhighly geared you are against
your practice goodwill if youwere to approach for development
uh money for the practice.
Sometimes it's termed over 10years, sometimes 15 years.
If you were looking at an 80%loans of value, you might be
able to get the developmentcosts on top at the outset

(09:08):
termed over the same period, thesame 15 to 20 years.
So again, it depends on theproposition, and that is the
reoccurring thing withcommercial finance, because it
is about the story that we putinto the banks, it's not a tick
box like residential mortgage.

Dr James (09:23):
You know, I'm glad I asked that because obviously if
your plan is to upgrade thepractice and invest in it, it's
just good to make that clear,right?
Because if you're borrowingagainst 100% of the goodwill,
then you have no more well,there's no goodwill to borrow
against with the more short-termfinance.

Kevin (09:40):
Yes, yeah.
I mean there's all there'salways short-term finance
available with the small banksfor developments and equipment
uh purchase, etc.
And that's generally termedover five to seven years.
Uh but if you can get the moneyfrom the head bank at the
beginning and spread it over 15to 20 years, obviously that
impacts cash flow far less.

Dr James (10:02):
Interesting.
Anyway, it sounds like there'ssome numbers crunching behind
this, really, to kind of figureout if it's possible.
And from what I understand,Kevin, you're happy to do that
for dentists.
UK dentists, if you are juststarting out on your investment
journey or you're alreadyinvesting and want to know if
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Kevin (11:12):
Definitely.
And that's why I said it's acase-by-case um scenario.
We have to look at every singlecase, crunch the numbers, and I
do that for dentists.
Sometimes they'll look at twoor three practices, and I'm
they're crunching the numbers inthe background, telling them
what works, and talking to thebanks on their behalf, and we'll
finally find one that is theright fit and they're happy with
the numbers on.

Dr James (11:32):
And just one more thing.
I'm just curious to know whyhave the banks all of a sudden
doubled the amount that you canborrow against the goodwill
under 100% finance?
What's the reasoning behindthat?

Kevin (11:44):
That's a really good question.
So uh one of the banks hasfired up and done that, um, and
that's kicked off the otherbanks as well.
So there is a little bit of apolicy war going on at the
moment, a credit policy war.
Um, the banks are all vying forthe business.
Um, so healthcare professionalsare really good clients to
have.
Uh, and probably it's there'sonly been a couple of banks that

(12:07):
have been lending large amountsof money for the last few
years, and another bank's nowstepped up and it's caused a bit
of a shape in the marketplace,and they're all revisiting the
policy.
But I think it was the rightthing to do.
Um, that £300,000 limit we'retalking about was the same when
I was in the bank, and that wasuh well when I started in the

(12:28):
healthcare team back in 2002,hasn't been changed since then.
Back then it made sense giventhe price of practices, whereas
now it's it's become a bitoutdated.
So I think that's what's reallypushed the um the bank to
increase its amount.

Dr James (12:42):
Interesting.
So this has been somethingthat, in your opinion, was due
to revisit, and it just sohappens that since we did the
last podcast and this podcast,that was that time, that one
time over the last 20 years.
How crazy is that?
We'll do another podcast inanother three months, it'll be
higher still.

Kevin (12:58):
Maybe others maybe that was the trigger.
Well, well, no, to be honest, II I knew it was going on uh
when we had the last podcast,but until a bank signs off on an
amendment to credit policy, andand I know myself from working
on credit policy in a bank, um,it it takes forever.
So we just never count ourchickens until we get the you
know the the news that it's beenchanged.

Dr James (13:20):
Awesome.
And Kevin, if anybody listeningtoday wants to find out more
about anything you said or haveyou crunched the numbers for
them, how are they best offgetting a hold of you?

Kevin (13:29):
Yeah, they can email me or call me uh or check out the
Saroma web page.

Dr James (13:34):
Sure.
And what's your best email andmobile number?

Kevin (13:38):
Okay, so um email will be [e-mail] and mobile
0780-144-0622.