How to Buy an Orthodontic Practice in 2026

Orthodontic practice acquisitions look simple on the surface — one specialty, mostly cash-pay, predictable treatment timelines. Then you open the books and realize that half of what looks like "revenue" on the P&L is actually a liability you're about to inherit. More than any other dental specialty, orthodontics requires you to understand the difference between cash collected and revenue earned, because the seller has been paid for work you now have to finish.

I've structured orthodontic deals for buyers ranging from young associates stepping into their first practice to DSO-backed roll-ups like Smile Doctors and OrthoFX. The fundamentals of the diligence don't change — but the way you price the risk does. Let's walk through it.

The Work-in-Progress Problem

When an orthodontist starts a patient on braces or Invisalign, the patient typically pays a significant down payment and then monthly installments over 18-30 months. A lot of practices collect aggressively upfront — 30-50% of the total case fee at the initial bonding appointment. That cash hits the practice's bank account immediately.

But the practice still owes that patient every remaining adjustment visit, the debond, the retainer, and usually a year of retention checks. Those obligations don't appear on a cash-basis P&L, which is how 90% of ortho practices keep their books. If you buy the practice on a cash-basis trailing-twelve-month multiple, you are literally paying for revenue the seller already spent — and you're on the hook for the clinical work.

This is the single biggest mistake I see first-time orthodontic buyers make. They look at $1.8M in trailing collections, multiply by some percentage, and write an offer. What they should be doing is building a work-in-progress (WIP) schedule.

Building the WIP Schedule

Ask the seller for a patient-by-patient report of every active case, including: total contracted case fee, amount collected to date, months into treatment, and estimated months remaining. Most ortho practice management systems (Dolphin, Cloud 9, OrthoTrac, tops Software) can spit this out in a few clicks. If the seller can't produce it, that by itself is a red flag.

Once you have the report, calculate the unearned revenue liability: for every patient, figure out what percentage of treatment has been delivered and compare it to what percentage of the fee has been collected. The difference is what you owe.

Here's a real example. A practice I looked at last year had 620 active patients, $3.4M in total contracted value across those cases, and had collected $2.1M from those patients. Based on treatment progress, only $1.6M of that was actually "earned." The practice owed $500K worth of clinical work to patients who had already paid. That $500K came straight off our offer price, dollar for dollar.

Every LOI I write for an orthodontic practice has a provision requiring a WIP reconciliation at closing, with the purchase price adjusted based on the final WIP liability. Don't close without it.

What Orthodontic Practices Actually Sell For

Adjusted for WIP, orthodontic practices trade to individual buyers at 65-85% of annual collections or roughly 2.0-3.0x SDE. Multi-location groups with professional management and $750K+ in EBITDA are the prime targets for DSO buyers, who pay 6-9x EBITDA for bolt-ons and 10-13x for platforms.

The DSO buyers you'll actually compete with are Smile Doctors (backed by Thomas H. Lee Partners), OrthoFX, OrthoDent, and Smile Brands on the multi-specialty side. Smile Doctors alone has acquired north of 400 locations since 2015. If the practice you're eyeing has more than one location or multiple associates, you should assume the seller is already talking to at least one DSO. Useful context on how specialty dental multiples compare is in our dental practice valuation guide.

Financing and Deal Structure

SBA 7(a) is the dominant financing vehicle for orthodontic acquisitions under $5M. Live Oak Bank, Bank of America Practice Solutions, and Wells Fargo Practice Finance are the most active lenders. Expect to put 10% equity down, get a 10-year amortization, and see rates in the prime + 1.5-2.5% range. SBA lenders will typically fund 85-90% of the transaction value but will not finance the WIP liability — so plan for that gap in your equity check.

Above $5M, you're into conventional practice acquisition loans, which often require a personal guarantee and 15-20% equity. Seller notes are common in orthodontics — I'd push for 15-25% of the purchase price carried by the seller for 5 years at 6-7%, structured as standby debt behind the bank. That structure keeps the seller invested in the transition and lowers your equity requirement.

Clinical and Operational Diligence

Treatment philosophy alignment. Every orthodontist treats differently — extraction vs. non-extraction, bracket system, Invisalign volume, early intervention. If your treatment philosophy is meaningfully different from the seller's, you'll face patient attrition as you change protocols mid-stream. Worse, you may clinically disagree with how the WIP patients were set up. Review 10-15 active cases with the seller before you close so you understand what you're inheriting.

Referral patterns. Orthodontics still runs heavily on general dentist referrals. Pull a report of the top 25 referring GPs and what percentage each contributes. Personally visit the top five before close. The relationship is portable — but only if you put in the work immediately.

Invisalign tier status. Align Technology tiers (Bronze through Diamond Apex) drive lab fee discounts that can be worth $50K-$200K a year to a busy practice. Tier status generally transfers with the practice, but confirm with your Align rep before close — the rules change periodically.

Staff retention. Orthodontic assistants and treatment coordinators carry enormous institutional knowledge. The TC in particular is often the face of the practice to referring dentists and parents. Lose the TC, and you can lose 20-30% of new case starts. Talk to the TC before close, understand their comp, and plan a retention bonus if needed.

Lease terms and building. Orthodontic offices are expensive buildouts — $500K-$1M for a typical open-bay operatory. If the lease has less than 5 years remaining with no renewal option, your SBA loan gets harder and your exit options narrow. If the seller owns the building, you'll likely need to negotiate a separate lease (typically 5.5-7% cap rate on the real estate) or roll it into the transaction.

The Post-Bracket Payment Trap

Here's a nuance most buyers miss. Many ortho practices offer patients a discount for paying upfront in full — say, 5% off the $6,000 case fee if the parent writes one check at bonding. That's great for cash flow, but terrible for the buyer of a practice with a lot of those patients on the books. You get zero future cash flow from them, but you owe them 18-24 months of clinical visits.

When you build the WIP schedule, segment the patients by payment plan type: paid-in-full, monthly installment, and delinquent. The paid-in-full bucket is pure future-cost-no-future-revenue — those patients need to be fully priced into your WIP adjustment. The monthly installment bucket has offsetting future cash flow. Delinquent accounts need a separate reserve.

The Transition

Orthodontic transitions are the most sensitive in all of dentistry. Parents committed their child to a specific orthodontist for a multi-year relationship. When that orthodontist sells, some parents will leave — not because the new doctor is bad, but because they feel blindsided. Your transition plan has to address this directly.

The best transitions I've seen involve the seller staying on 2-4 days a week for 6-12 months, a joint letter to all active patients announcing the transition, and the seller personally introducing the buyer at the next scheduled appointment for every active family. Budget for this in the deal — the seller's post-close clinical services should be at fair market value (typically 30-35% of their collections), not free.

The Bottom Line

Orthodontic practice acquisitions reward buyers who do the math nobody wants to do. The WIP schedule, the payment plan segmentation, the referral source calls — none of it is glamorous, and a lot of sellers will push back on the diligence. Do it anyway. The difference between a disciplined buyer and an enthusiastic one in this specialty is usually $200K-$500K in overpayment. Before you sign an LOI, run the target through our instant valuation tool and build a realistic WIP adjustment into your offer from day one.