A Redwood City, CA buyer can finance a dental practice or consulting firm purchase in three pieces: the buyer’s own cash, a seller note for part of the price, and a term loan from a funding partner for the rest. The purchase covers the business itself, not the building. Which partner offers, and on what terms, comes out of the review after Whiteside Finance hands the file on.
A practice or firm purchase combines the buyer’s cash, a seller note and a term loan; working capital covers payroll until collections start, and partner buyouts follow the same pattern. Examples use invented figures.
Down payment, seller financing and the lender share
Three sources pay the price at closing. The buyer brings cash. The seller can carry part of the price as a note, paid back over a few years, which keeps the seller invested in a smooth handover. A funding partner can cover the rest with a term loan, the lender share.
| Piece | Share of the price | Amount | Monthly payment |
|---|---|---|---|
| Buyer’s cash | 10% | $145,000 | none |
| Seller note: 6% a year, paid over 60 months | 15% | $217,500 | $4,204.88 |
| Term loan for the rest: 10.25% a year, 120 months | 75% | $1,087,500 | $14,522.37 |
In this example the two payments total $18,727.25 a month for the first five years, then drop to $14,522.37 once the seller note is paid. In this example, over its 60 months the note carries $34,792.80 of interest; the term loan’s 120 installments carry $655,184.40.
Due diligence for a practice or professional firm
What a funding partner can ask for in a purchase overlaps with what the buyer’s own diligence should turn up. For a dental practice:
- Three years of production and collections, by provider
- Active patients and the recall schedule
- The equipment list, with the age of each chair and imaging unit
- Whether the landlord agrees to move the suite lease to the buyer
For a consulting firm:
- Revenue by client, and how much of it rests on a few accounts
- Whether each client agreement can be assigned to the buyer
- Who keeps the relationships after closing: staying partners, senior staff, a transition period
- Work in progress and receivables at closing, and who owns them
A firm with no staff sells little beyond its owner’s relationships, so the transition period carries weight. The 2024 nonemployer statistics count 5,608 Management, Scientific, and Technical Consulting Services businesses with no paid employees in San Mateo County, CA (NES, NAICS 5416).
Working capital after closing in Redwood City, CA
Receivables earned before closing belong to the seller unless the purchase agreement says otherwise, so a buyer can meet payroll before the first collections of its own arrive.
Illustration only, invented figures: with $31,000 of payroll every two weeks and collections that start 40 days after closing, 2 or 3 paydays come first, depending on the calendar: $62,000 to $93,000 for the buyer to carry.
That amount can sit on a working capital loan or a credit line next to the term loan, and a partner can review both in one request. A seller who also owns the suite or the building would sell that separately, as property this site leaves aside.
Partner buyouts inside an existing firm
A buyout changes who owns the firm without changing the firm. One partner buys another’s share, for instance when a founder retires, and the price comes from a valuation method the buy-sell agreement names.
Illustration only, invented figures: a consulting firm valued at $900,000 has a departing partner with a 40% share, priced at $360,000. In this example the staying partner puts in $36,000 and finances $324,000 over 84 months at 10% a year, an installment of $5,378.78; the 84 installments carry $127,817.52 of interest.
The loan can sit with the firm or with the partner who is buying, depending on the agreement and on what the funding partner offers. To start, call (650) 336-2048 or use the request form; other articles sit on the blog.
By Whiteside Finance · Updated
