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Best Dental Practice Loan Options for Dentists

Posted On: February 9, 2023 author Paul Kendall

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 or go with a dental equipment leasing company?

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 a loan with your local bank. If you are like most dental business owners, chances are you don’t have perfect personal credit or you don’t yet have enough years of experience. Don't worry you still have financing options with equipment finance companies. More equipment finance companies are giving out cash to business owners with their equipment lease now too. 

At this point, other dental practice finance options become viable.

Small Business Association (SBA) 7 Loans

You’ll still work with the bank to acquire an SBA 7 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 7 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. This is a good option when a dentist is looking to buy an existing dental practice.

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 equipment lender will typically lend up to $2,000,000. Most equipment lenders like to keep there exposures down below in the $250,000 - $500,000 range for first time customers, unless you prove you're worthy. So it's sometimes wise to use a couple equipment lenders to get all the dental equipment you need to scale your dental practice. 

For a start up dental equipment loan. Equipment lenders typically like to see small dental business owners to have their 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 6-8% with an approval/denial process that will take a day or two depending on the requested loan amount. 

In the equipment finance industry it's easy for a dentist to get all the equipment financing they need for their new or existing dental practice. As long as you've established a good personal payment history with at least 5 good trade lines for five years and have some comp values for the amount you're seeking you'll have no problem obtaining all the money you need from an equipment finance company. 

Dental equipment lenders have special finance programs for dentists. Such as no payments for the first 90 days or $29 for the first 6 months followed by terms up to 84 months. If you take a longer lease term, be sure to negotiate a good early pre payment option or option to upgrade equipment with just the remaining principal amount owed half way through the equipment finance agreement.

Business owners use dental equipment leasing for purchasing equipment and use local bank loans for paying for things that appreciate such as hiring good dental assistants, marketing, etc. 

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.

More Resources

Start Up Business Financing

Equipment Financing

Ready to Apply for a Dental Practice Loan? Click the link below!

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