How to sell a dental practice: price, process and buyer funding

Selling a dental practice is usually a once-in-a-career event, and most principals start thinking about it five or more years before they want to stop treating patients. This guide is for owners in that position: what buyers pay for, how the NHS contract and CQC registration affect the route, how your buyer's funding shapes the price and terms, and what to prepare. Smart Funding Solutions is a broker, not a lender. We arrange funding for practice buyers, and for sellers restructuring before or after a sale, from around £10,000 to £500,000+, with larger facilities available in suitable cases. Buying-side and day-to-day borrowing is covered on our dental practice loans hub.

01Who buys dental practices

The buyer you choose affects the price, how much is paid on completion and what is expected of you afterwards.

• Associates and local principals. Often the natural buyer for a practice with a strong local name. They usually need acquisition finance, so the price has to work for their lender as well as for them. In return, you are rarely asked to stay on for long.
• Corporate groups and consolidators. They may pay more in headline terms but often defer part of the price, tie it to your continued clinical work for a set period and apply restrictive covenants. Read the earn-out mechanics as carefully as the headline figure.
• Your own team. A long-serving associate, or several, can buy in stages. Our page on dental partner buyouts covers how the funding works when one owner exits and another stays.

02What drives the price

Most dental sales are priced on goodwill, with the equipment included and any freehold valued separately. Goodwill values are commonly derived from the practice's sustainable profit, and a specialist dental valuer adjusts that profit to reflect what a new owner will actually earn. Four adjustments move the number most:

• Your own clinical output. If you personally generate a large share of gross fees, the valuer and the buyer's lender will cost replacing you with an associate on market terms. The more income sits with other clinicians, the less this bites.
• NHS contract delivery. A contract consistently delivered to target supports value. Repeated under-delivery can lead to money being recovered, and buyers will price that risk or ask for a retention.
• Private and plan income. Monthly plan members spread across several clinicians are worth more than high-value treatment that depends on your personal referrals.
• Premises and capacity. A long lease with landlord consent to assign, or a freehold, and a spare surgery that could be equipped, make the practice easier to finance and more attractive.

03Share sale or asset sale

How the practice is owned decides the legal route, and each route has its own regulatory steps.

Selling a practice company

If a limited company holds the NHS contract and the CQC registration, selling the shares usually leaves both in place with the company. The buyer inherits the company's history, so expect detailed warranties and indemnities, and a buyer's lender that wants clean accounts and a clear statement of the debt being repaid at completion. CQC still needs to be told about changes such as a new registered manager or nominated individual.

Selling the business and assets

Where you trade as a sole trader or partnership, the buyer takes over the goodwill and equipment, but an NHS contract held personally does not transfer with them automatically. The commissioner has to agree a variation, and the exact route depends on who holds the contract. The NHS England policy book for primary dental services sets out how commissioners in England handle contract changes; arrangements differ in Scotland, Wales and Northern Ireland. The buyer must also be registered with CQC as a new provider before treating patients, which is explained in the CQC guidance to sell or transfer your business to another provider. Staff move to the buyer under TUPE.

The tax side

Share sales and asset sales are taxed differently, and the choice between them is as much a tax decision as a legal one. Individuals selling a qualifying business or shares may be able to claim Business Asset Disposal Relief, which reduces Capital Gains Tax on qualifying gains up to a lifetime limit, subject to ownership conditions. Deferred consideration also affects when tax falls due. Take accountancy advice before you agree heads of terms, not after.

Most dental sales are priced on goodwill, with the equipment included and any freehold valued separately.

04What lenders check when funding your buyer

Unless your buyer is paying cash, a lender stands behind the deal, and its conditions become your conditions. Knowing them early prevents a sale collapsing late.

• Adjusted profit. Profit after replacing your clinical time, which is what the buyer's repayments must come from.
• Independent valuation. Most lenders instruct their own dental valuer. If it comes in below the agreed price, the buyer needs a larger deposit or a price change.
• Contract and registration. Written confirmation of the NHS contract position and the buyer's CQC registration before funds are released.
• Lease terms. Enough unexpired term to outlast the loan, and landlord consent to assign or grant a new lease.
• Handover. A defined period in which you stay on, and whether plan members and key associates are committed.
• Deferred consideration. Any part of the price paid later will usually be required to rank behind the lender, so you are paid only if the buyer's loan is being serviced.

Ask a prospective buyer early for evidence of their deposit and an indication from a lender. A buyer who has not tested their funding is the most common reason a dental sale drifts. Our guide to dental practice acquisition finance sets out the process from the buyer's side.

05Preparing the practice for sale

The work done in the year or two before marketing tends to matter more than negotiation at the end.

• Deliver the NHS contract to target, and resolve any open recovery or year-end reconciliation queries.
• Move patients and plan members onto other clinicians where you can, so income is less tied to you.
• Put written agreements in place with every associate, hygienist and therapist.
• Renegotiate or extend a short lease, and confirm the landlord's position on assignment.
• Check that decontamination, radiation protection and CQC records would stand up to a buyer's due diligence.
• List every finance agreement on equipment and any charge over the business, with settlement figures, so the buyer's lender knows what is being cleared.
• Prepare management accounts that separate your drawings and personal costs from practice costs.

£137,500A transaction we arranged£137.5K to fund an accountancy practice acquisition.An established firm had an acquisition agreed. We structured the funding around the transaction and got it completed.

06Illustration: a principal selling to an associate

Illustration: the figures below are round and hypothetical. A principal agrees to sell a three-surgery leasehold practice to a long-standing associate for £450,000. The buyer's lender values goodwill slightly lower once the principal's clinical output is replaced, and will fund a proportion of that valuation. Rather than cut the price, the seller agrees to defer £50,000 over two years, ranked behind the lender, and to work two days a week for a year. The buyer puts in savings and funds the balance with a term loan, plus separate equipment finance for a replacement chair. The seller receives most of the price on completion, the buyer's repayments fit the adjusted profit, and the deferred sum gives both sides a reason to make the handover work.

07Documents buyers and lenders will ask for

08Risks for the seller

A higher price with more of it deferred is not always the better offer: deferred money depends on the buyer running the practice well and on the lender being paid first. Earn-outs tied to your own continued output can keep you working longer than planned. Personal guarantees you gave on the lease or equipment finance do not disappear on sale unless the landlord or finance company releases them, so make release a completion condition. Finally, keeping the freehold and letting it to the buyer can provide income, but you then depend on the buyer as tenant; our page on dental practice premises finance covers how buyers fund the building if you sell it instead.

09The sale step by step

1. Take valuation, tax and legal advice, and decide whether you want a clean exit or can stay on.
2. Prepare the practice and the data room, then approach or market to buyers.
3. Agree heads of terms covering price, deferral, handover, the premises and exclusivity.
4. The buyer arranges funding; the lender's valuation, CQC registration and NHS contract steps run in parallel with legal due diligence.
5. Complete, with existing finance settled from the proceeds and guarantees released.
6. Work through the handover and receive any deferred payments as agreed.

10Where we fit in

We work with buyers of dental practices, searching our panel of 300+ lenders for those with appetite for dental goodwill, and presenting the valuation, contract position and handover plan so the lender sees the deal as it is. A buyer with a funded route is a buyer who completes. We also help sellers who want to refinance premises they are keeping, or who are buying elsewhere as part of the same move; see our guides to refinancing a dental practice loan and vendor finance and deferred consideration. For deal structures across all sectors, see our acquisition finance page. Lenders make the decision. It is free to enquire; any broker fee is disclosed separately before you proceed.