You’re looking to open a dental practice but don’t know how to finance everything in it before you can open your doors for business? Or are you just trying to take your dental practice to the next stage of business and want to make sure all financials are covered before beginning?
Don’t worry, I’ve got you covered. I’ll help you figure out the best dental practice loan options available for you, whether you’re just starting out or you’ve been in business for years.
The best thing to keep in mind as you search for dental practice financing is realizing that there is no “perfect” financier or offer that fits every scenario. Only ideal offerings for your unique business situation.
Should I Get a Bank Loan as a Dentist?
If you qualify for dental practice loans from a bank, that is going to be hands down your best offer. Outside financing companies are ideal for businesses that don’t have perfect credit. If, however, your business credentials allow you to qualify for a bank loan - chances are you should take it.
What Are My Options If I Don’t Qualify for a Dental Bank Loan?
If you don’t qualify for a bank loan, don’t fret. Most dentists and their practices don’t. You would need near-perfect business credentials to qualify for that. If you are like most businesses, chances are you don’t have perfect credit or you don’t yet have enough years of experience.
At this point, other dental practice finance options become viable.
Small Business Association (SBA) Loans
You’ll still work with the bank to acquire an SBA loan, but it’s not always easy. Generally you will need at least 2 years in your practice and a credit score exceeding 600 before you can apply for an SBA loan. Although it can take a while and may not succeed to get an SBA loan, it’s still worth the time to apply. For a 10 year loan, you could be looking at rates of 6-7% with an approval/denial process that will take only a week.
Business & Merchant Cash Advances
While it’s not a popular, nor always recommended option, cash advances are just another alternative. They have their place of use when the situation calls for it. Cash advances work by providing you exactly the amount of funding you need while the lender “captures” a certain percentage of your daily transactions (or requires daily payments) to pay off the loan and interest.
Dental Equipment Financing Options
Start up dental practices can access equipment financing and dental equipment leasing through equipment lenders that specialize in the dental industry. Each lender will typically lend up to $500,000. Most like to keep there exposures down below $250,000. Typically like to see you have your dental license for longer than two years and making above $100,000 per year. For a 5 year dental equipment loan, you could be looking at rates of 7-8% with an approval/denial process that will take a couple of days.
More Dental Financing Options
There’s no one “tried and true” option that fits every scenario. Your situation is unique, so make sure you are taking the time to analyze different financing options that is unique and personalized for your dental practice.
It’s difficult to provide you with an accurate estimate of how much dental practice loan rates will be, simply because there are so many options and they vary drastically. Your best bet is to contact banks and financiers and inquire about their rates based on your business history, credit score, and other required information.
Ready to Apply for a Dental Practice Loan? Click the link below!