Selling or buying a dental practice: what does the equipment appraisal answer?
In a dental practice sale, the equipment appraisal answers what the tangible assets are worth on a stated date: the operatories, the pano and CBCT, the intraoral scanners, the CAD/CAM mill, the lasers and the sterilization room, valued unit by unit. It does not value the patient base, the hygiene schedule, the payer mix or the location. Those make up goodwill, which a practice valuation prices from earnings. A buyer's lender reads both, and the equipment value is the part the collateral file rests on.
Lukes & Lukes appraises dental practice equipment nationwide. Every report is USPAP-compliant and prepared by a NEBB-certified Machinery & Equipment Appraiser (CMEA).
By Jared Lukes · CEO & lead appraiser
Selling, buying or financing a practice? Request an appraisal →
How is a dental practice's value different from its equipment's value?
A practice valuation looks at the business: collections, overhead, owner compensation, hygiene production, new-patient flow and the lease. Practice brokers and business appraisers price it from earnings. The equipment appraisal looks at each owned asset and asks what it would bring in its market under the premise the assignment calls for.
| Question | Practice valuation | Equipment appraisal |
|---|---|---|
| What it values | The practice as a going concern, goodwill included | Each owned unit: chairs, delivery units, imaging, scanners, mills, lasers, sterilization, utility room |
| How | Earnings, cash flow and comparable practice sales | Sales comparison and cost approaches, by category and technology generation |
| Standard | Business valuation standards (USPAP Standards 9 and 10, or the AICPA valuation standard for CPAs) | USPAP Standards 7 and 8, personal property |
| Who relies on it | Buyer, seller, lender, partners | Lender's collateral file, purchase price allocation, insurance, partners |
| Premise | Fair market value of the practice or an ownership interest | Fair market value for the sale; orderly liquidation value for the loan |
In a profitable practice, goodwill is the larger share of the price. In a practice with thin earnings, the price falls toward the value of the equipment, and the equipment appraisal becomes the measure of the deal. Our earlier article covers how each category of dental equipment is valued; this one covers what the appraisal does inside a sale.
What does the lender or the SBA file need from the equipment appraisal?
Most practice acquisitions are financed, many through an SBA 7(a) loan. The lender reads two separate documents.
- A business valuation for the change of ownership. SBA SOP 50 10 requires an independent business valuation on a change of ownership when the amount financed, less the appraised value of the real property and equipment, passes a threshold set in the SOP, or when buyer and seller have a close relationship. Confirm the current threshold with the lender.
- An equipment appraisal for collateral. Under the SOP's collateral rules, used equipment counts at up to 50 percent of net book value, or up to 80 percent of orderly liquidation value when an orderly liquidation appraisal supports it, net of prior liens.
- A report the file can tie to. Every operatory itemized, serial numbers on each unit, an on-site inspection, the premise named and defined, and an effective date close to closing.
A fixed-asset line inside the practice valuation is not an independent equipment appraisal. Our SBA financing appraisals are written to the lender's collateral rules, and the 7(a) article covers what the file needs in detail.
What happens to leased or financed equipment when the practice sells?
Scanners, CBCT units, mills and lasers are often bought through manufacturer or distributor finance programs. Who owns each unit decides how the appraisal treats it.
| Arrangement | Who owns the unit | How the appraisal treats it | What happens at closing |
|---|---|---|---|
| Owned outright | The practice | Valued | Conveys with the practice |
| Equipment loan or $1 buyout lease | The practice, subject to a lien | Valued; the lien is reported, not deducted from the unit's value | Paid off from proceeds, or assumed with the lender's consent |
| True lease or rental | The lessor | Listed separately and excluded from value | Assigned to the buyer with the lessor's consent, or bought out |
| Software license or subscription | The vendor; the practice holds a right to use | Valued only where it transfers | Transferred under the vendor's policy, sometimes for a fee |
A UCC search shows who holds a claim on practice assets. Intraoral scanner care plans, cloud accounts and CAD/CAM licenses sit with the vendor, and some require a paid transfer before a new owner can run the unit. The appraisal states which units it valued and which it excluded.
How do the age and support status of the imaging change its value?
A CBCT or pano is often the most valuable single unit in the practice. Four things move its value.
- The detector and the tube. They carry the value of the unit, and a failed flat panel or tube is a major repair.
- The imaging PC and software. Microsoft ended Windows 10 support on October 14, 2025. A sensor, pano or CBCT tied to a workstation without a supported upgrade path carries the cost of a new PC and software in its value.
- Who services it today. Brands change hands. The appraisal confirms who supports the model and whether parts are available.
- Installed or removed. In a going-practice sale the unit stays in place, registered and working. Removed, its value is net of de-installation by a registered installer, the state x-ray transfer notice, freight and setup at the new site.
What sets how long the appraisal takes?
The number of locations and operatories, whether an asset list with serial numbers already exists, access to the operatories outside patient hours, and how fast the lease, loan and license documents arrive. Inspection can be scheduled around the patient day. Tell us the closing date at the start and we will say plainly whether it can be met.
What drives the cost of the appraisal?
Scope. The drivers are the number of locations and operatories, the amount of imaging and lab equipment, the completeness of the records, whether the report carries one premise or two (fair market value for the sale and orderly liquidation value for the lender), travel, and whether the report has to stand up in a dispute between partners or in court. We scope it from the asset list and the purpose before quoting.
Who orders it: seller, buyer, DSO or lender?
- A retiring or selling dentist orders it before listing, to know what the equipment supports in the price and to fix the schedule that will be attached to the purchase agreement.
- A buyer orders it, or the buyer's lender does, to support the loan and the allocation of the price.
- A DSO buying several practices needs a consistent schedule across every location for allocation and for its own lenders.
- Partners in a buy-in or buy-out need fair market value as of the date the agreement names.
Dental sits inside our healthcare and medical equipment specialty. For the purchase side of any acquisition, see equipment appraisals for mergers and acquisitions.
Common questions
Answers, up front.
I am buying a dental practice with an SBA loan. Does the lender need an equipment appraisal on top of the practice valuation?
Often, yes, and they are two separate documents. The practice valuation prices the business from its earnings; the equipment appraisal values each owned unit for the collateral file, at orderly liquidation value. SBA SOP 50 10 sets when a business valuation is required on a change of ownership, and the lender's credit policy sets when the equipment is appraised. A fixed-asset figure inside the practice valuation is not an independent equipment appraisal.
How much of my dental practice's sale price is the equipment?
There is no fixed share. A practice price is set from earnings, and in a profitable practice goodwill is the larger part of it. The equipment appraisal states the tangible part on the effective date, and the purchase agreement allocates against it. A practice with thin earnings sells closer to the value of its equipment.
Our CBCT and scanner are still being paid off. Can they go with the practice when I sell?
Yes. If the practice owns them subject to a loan, the lien is paid off from the sale proceeds or assumed by the buyer with the lender's consent. If they are on a true lease, the lessor owns them, and the lease is assigned to the buyer or bought out. The appraisal values the owned units and lists leased units separately; a UCC search shows who holds a claim.
Is my ten-year-old pano worth anything when I retire and close the practice?
Yes, if it runs, the sensor and tube are sound, and the software and imaging PC are still supported. Removed from the practice, its value is net of de-installation by a registered installer, the state x-ray transfer paperwork and freight. A unit whose PC runs an unsupported operating system carries the cost of the upgrade in its value.
A DSO is buying my practice. Do I need my own equipment appraisal?
The DSO prices the practice on earnings and runs its own diligence. A seller's own appraisal gives the seller an independent value for the equipment schedule and for the allocation in the purchase agreement, which buyer and seller both report to the IRS on Form 8594 in an asset sale.
Who pays for the equipment appraisal when a dental practice changes hands?
The party that engages the appraiser. When the buyer's lender requires the appraisal for the acquisition loan, the lender usually engages it and the buyer pays for it as a closing cost. A seller who wants a value before listing engages and pays for their own.
What sets how long a dental practice equipment appraisal takes?
The number of locations and operatories, whether an asset list with serial numbers exists, access to the operatories outside patient hours, and how fast the lease, loan and license documents arrive. Give us the closing date at the start and we will say plainly whether it can be met.