Dental Practice Business Loan Options
The dental industry is a complex and competitive industry that will often require financing to navigate the different issues faced by dentists. It’s essential to understand the types, terms, and uses of the various business financing options available in the marketplace so a dental practice can make informed decisions and get the best terms for what you are using the money for.
Are you in the early stages of your dental practice and can't get a traditional bank loan? Are you an established dentist practice that is looking to expand your business? Perhaps you’re a dentist who is looking for better equipment. Regardless, understanding the different dentist loan products, dental lenders, online lenders as well as other lending institutions that are available in the marketplace is very important.
What is a Dental Practice Loan?
A dental practice loan has many purposes from acquiring a practice, purchasing equipment, fund an expansion to working capital in general. There are many dental practice loan options to choose from such as a business term loan, business line of credit, equipment loan, SBA loans and many other financing alternatives. Qualifications, rates, terms and features of specific loans vary significantly depending on the loan a practice is applying for.
How does Medical Practice Financing Work? Financing Your Dental Practice
When beginning the process of potentially financing your dental practice, the first question your average small business owner will need to ask yourself is, why? What is the purpose, and how will the financing benefit your business? The purpose and use may dictate what dental business loans you will choose and drive the best terms for the use. It’s not just about the rates. You need to balance interest rates with costs, terms, payment frequency, and product flexibility when making the best choice for practice solutions. Not to mention, what you qualify for. It’s recommended to always explore every financing option in the marketplace.
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Dental Practice Loans Options
SBA Loans for a Dental Practice
The Small Business Administration mission is to provide government-backed business loans to small businesses. SBA loans are popular because of there affordable interest rates and terms which are second to none. The application process can be challenging and qualifications are difficult, but with proper guidance through the process approval is achievable.
- SBA 7(a) working capital up to $5,000,000
- Rates starting at 9%
- Terms from 2 to 10 years on SBA 7(a)
- Signification application process
Small Business Loans for Dentists
Dental Business loans come in varying loan terms and come in many forms, shapes, and sizes as there is no standard dental loan. Small business term loans whereby a practice receives a lump sum at funding with fixed rates, terms and set payments Explore your options like many dentists do.
- Fixed terms
- Simple and straightforward application process
- Terms from 1 to 5 years
Dental Business Lines of Credit
A line of credit is a revolving credit facility with the ability to draw money on demand up to a credit limit. You only pay interest on the current outstanding balance. Lines of credit are very popular for dentists looking for working capital throughout different times of the year.
- Line of credit is know for it's flexibility
- Only utilize money you need when you need it via draw
- Daily simple interest starting at 1% per month
Long-Term Loans for Dental Practices
A Long term loan is great for larger dental practices looking to expand and grow and need large loan amounts that are spread out over years for affordable payments with a good interest rate and reduced fees. Long term loans have a more significant application with additional documentation required for approval.
- Affordable rates starting at 9%
- Fixed rates, terms and payments
- Repayment terms ranging from 3 to 10 years
Short-Term Loans for Dental Practices
A Short term loan is a term business loan that is repaid under fixed rate and payment, but repaid ins shorter time frames of less than 18 months. Short term business loans are a great option for immediate cash flow needs and needs a quick turnaround for approval to fund.
- Duration of repayment typically from 3 to 18 months
- Fixed rates
- Streamlined simple 1-page application
- Approval & funding in as little as one day
Merchant Cash Advance for Dentists
A merchant cash advance is a great option when traditional banks and loan approval is not an option due to credit history, time in business, financial statement issues, or other concerns. Repayment is made with a percentage of future credit card sales making repayment flexible. Fast credit approval.
- Revenue based dental practice funding option
- Repayment is flexible based on future sales
- No term limit on a merchant cash advance
Business Cash Advance for Dentists
A business Cash advance is available for credit-impaired or newer businesses that can't get approved by other traditional products like lines of credit. Repayment is flexible, as a set percentage of future sales is deducted to repay the funding. A quick lending process with fast credit approval. Great product for working capital needs.
- Revenue-based funding
- Convenience ACH payment based on percentage of monthly sales
- Most credit considered from excellent credit to bad credit
Dental Equipment Financing
Dental Equipment financing opportunities are available through an equipment loan or equipment lease. Equipment loans and leases use the equipment as collateral to offer better terms.
- Terms for equipment leases or loans range from 2 to 7 years
- Fixed affordable payments
- Most credit considered
Business Credit Cards for Dentists
Credit Cards are always a valuable tool in your toolbox of financial products for small business owners. Great for paying bills, working capital, quick purchases, and emergencies. Credit cards are available to anyone with good credit payment history.
- Revolving credit facility
- Plastic card is issued for purchases or paying expenses
- Instant approvals available
Benefits and Best Uses of a Dental Practice
Loan for My Existing Dental Practice
The use is pretty obvious. The best use of this type of financing is to acquire an existing or new dental practice. The benefits of this type of financing allow dentist to operate their own practice. Below are a few of the most common reasons dentists need a business loan for the dental office:
- Office space and office loans
- Debt consolidation of installment loans
- Refinance student loans and student loan debt
- Finance business plan
- Equipment purchases and equipment loans
- Real estate for office
- Working capital needs
- Cash flow
- Renovation work
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The Pro's and Con's of Dental Practice Loans
Anytime you are considering placing debt on your dental practice you need to consider the benefits vs. the downside to acquiring financing.
- The ability to expand the practice
- Avoids the need to deplete cash reserves of the business
- The ability to acquire equipment that would not be available with cash on hand
- Builds business credit
- Saddling the business with debt
- Potential for abuse and overleveraging the business with debt payments
- Adds additional monthly expense to the business
- Risk of delinquency or default that will negatively impact credit
Frequently Asked Questions
How to Apply and Qualify for
Dental Practice Financing
Check out How to Find the Best Small Business Loans to weigh all the benefits and evaluate the decision to get funding for your practice.
- Understand your qualifications- Always consider and review your credit, bank statements, financial statements and your business profile to determine your qualifications for your specific need.
- Search for a business loan originator- Consider a variety of lenders and funders who offer dental practice financing and determine there value whether it be banks, credit unions, business loan brokers or online business lenders.
- Interview and Apply- Interview with the chosen business loan originator and determine what products you potentially qualify for and then apply for pre-approval.
- Receive Offer(s)- Once you receive you offer(s) and review terms consider the pros and cons and what fits best for your need. Always shop, compare so you can save!
- Select Offer- Select an offer and provide the closing conditions required to fund.
- Receive Funding- Once underwriting clears your conditions, sign your agreement and receive your funds in as little as 1 day.
Dentists applying for a loan with AdvancePoint Capital can expect a simple application process.
Start with this online form by providing a name, email address, and phone number. Then fill out the short application page, wait a few hours for your approval to go through, and get your approval!