Dr. Patel is ready to buy dental practice ownership in May 2026. The collections look clean, the seller is cooperative, and the lender is comfortable with the purchase price. Then the real diligence starts: unused patient credits, prepaid treatment, open orthodontic contracts, outstanding lab balances, and treatment plans that may never convert. This is where deals are won or lost, because the number on the dental practice valuation report is only useful if the liabilities behind the revenue are understood.
If you are reviewing a dental practice for sale, talk with the Schilling Team before you sign an LOI so the offer structure protects your cash, your lender approval, and your first year of ownership.
Why Patient Credits Matter When You Buy Dental Practice Assets
Patient credits are not just an accounting cleanup item. They can become a dollar-for-dollar obligation after closing if the buyer agrees to honor them without a purchase price adjustment.
Here is what most dentists do not realize: a practice can show strong collections while carrying meaningful prepaid dentistry on the balance sheet. If a patient paid for a crown, implant phase, aligner case, or membership benefit before closing, the buyer may inherit the chair time, clinical delivery, staffing cost, and supply cost without receiving the original cash.
That does not automatically kill a deal. It does mean the credits need to be identified, aged, verified, and either excluded, credited at closing, or handled through a clear escrow.
Treatment Plans Can Inflate Buyer Confidence
A seller may show a thick pipeline of diagnosed dentistry. On paper, that can support the story of growth. In real life, treatment plans are not guaranteed revenue.
Separate Real Opportunity From Soft Revenue
A serious buyer should ask:
- How old are the open treatment plans?
- Were they presented by the selling doctor or an associate who is leaving?
- Are they tied to patients with active insurance, financing approval, or scheduled appointments?
- Are large cases dependent on specialist referrals or equipment the buyer will not keep?
If this is structured incorrectly, it can cost you hundreds of thousands. Paying for projected production that does not convert creates debt service pressure right when a new owner is trying to retain staff, patients, and momentum.
If you are comparing dental office financing options and acquisition targets, Burnett Facer of the Schilling Team, who specializes in dental real estate, can help you pressure-test the numbers before you commit.
How These Liabilities Should Affect Price and Terms
Patient credits and unfinished treatment can be handled several ways. The right answer depends on chart quality, patient retention risk, lender requirements, and how much seller support remains after closing.
A smart structure may include:
- A closing statement adjustment for verified patient credits
- A holdback for disputed or incomplete prepaid work
- A written schedule of open cases and expected clinical obligations
- Seller assistance during the transition period
- Clear language around refunds, remakes, warranties, and abandoned treatment
The goal is not to punish the seller. The goal is to keep the buyer from paying full value for revenue that already came in while also absorbing the cost of delivery.
Hidden Risks Buyers Miss
The biggest mistake is treating the purchase as a simple collections multiple. Dental real estate, lease terms, staff retention, equipment condition, A/R quality, and patient credits all affect whether the acquisition can actually support the loan.
Another mistake is letting dental office financing drive the strategy instead of the other way around. A lender may approve a deal based on historical cash flow, but if the buyer inherits a heavy load of prepaid treatment, the first six months can feel much tighter than the underwriting suggested.
Before you buy dental practice goodwill, real estate, or both, ask the Schilling Team to review the transaction structure so you know which obligations should reduce price, require escrow, or change the closing terms.
The Strategic Recommendation
In May 2026, good dental acquisitions are still getting financed, but buyers need cleaner diligence and tighter structure. A strong deal is not just the practice with the best asking price. It is the practice where the cash flow, patient obligations, lease, financing, and transition terms all work together.
Reach out to the Schilling Team and connect with Burnett Facer at (949) 212-1346 for a confidential consultation and real numbers on your next move.