What Is Debt Servicing in a Dental Practice?
Debt Servicing is the process of meeting a dental practice’s ongoing loan repayment obligations — including principal and interest payments on acquisition loans, equipment finance, overdrafts, and tax loans.
It shows how much of a practice’s monthly cash flow is committed to lenders rather than reinvestment or owner drawings.
Why Does Debt Servicing Matter for Dental Practice Owners?
Debt is common in dentistry, but poor servicing can erode profit and create long-term financial strain.
- High debt servicing = reduced owner take-home (PPAT™)
- Missed repayments = damaged credit and lender trust
- Over-leverage = risk in downturns or when revenue dips
Example:
- Total monthly repayments = £15,000
- Monthly operating cash flow = £50,000
- Debt servicing ratio = 30% → acceptable
If repayments rise to 50%, growth and drawings become unsustainable.
How Is Debt Servicing Measured?
Debt Servicing Ratio (%)=Total Monthly Debt RepaymentsMonthly Operating Cash Flow×100\text{Debt Servicing Ratio (\%)} = \frac{\text{Total Monthly Debt Repayments}}{\text{Monthly Operating Cash Flow}} \times 100Debt Servicing Ratio (%)=Monthly Operating Cash FlowTotal Monthly Debt Repayments×100
A healthy ratio is usually < 35% for dental practices.
What Are Examples of Debt Servicing in Dentistry?
| Loan Type | Repayment Example |
| Acquisition Loan | £8,000/month over 15 years |
| Equipment Lease | £1,500/month for 5 years |
| Working Capital Loan | £4,000/month for 12 months |
| Tax Loan | £2,500/month for 6 months |
How Does DentPulse Track Debt Servicing?
| Feature | Function |
| Loan Register | Tracks all loan repayments and balances in one place |
| CFFP™ (Cash Flow Future Pairing) | Matches future inflows to outflows, including debt servicing |
| Profit-to-Pocket™ Overlay | Shows impact of debt on safe owner drawings |
| OWS™ (Owner Wealth Score) | Weighs debt load against long-term financial resilience |
| Scenario Planner | Models effect of refinancing or early repayment |
DentPulse makes debt servicing transparent — protecting both short-term cash flow and long-term wealth.
DentPulse Tip™
“Debt doesn’t kill businesses.
Poor debt servicing does.”
Related Glossary Terms
- Practice Loans – long-term borrowing for acquisitions or growth
- Refinancing – restructuring loans for lower repayments or better terms
- Working Capital Loan – short-term liquidity support
- CFFP™ – future pairing of inflows and loan obligations
- Profit-to-Pocket™ – ensures safe drawings after debt servicing
Glossary Summary Table
| Term | Meaning |
| Debt Servicing | Meeting loan repayment obligations (principal + interest) |
| Purpose | Measures how debt affects cash flow, profit, and owner income |
| DentPulse Advantage | Centralised loan register + cash flow integration + owner wealth overlay |
