Dental Practice Business Loans
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The dental industry is a complex and competitive industry that many times will require financing to navigate the different issues faced by dentists. It’s important to understand the types, terms, and uses of the different business financing options available in the marketplace so you can make informed decisions and get the best terms for what you are using the money for.
Reasons for Getting a Business Loan for Your Dental Practice. How Dental Practice Business Loans Can Help You.
Whether you are starting out on your own as a dentist and are search of financing to acquire a dentist practice or an established dentist practice who is looking to expand your business or perhaps a practice looking for better equipment, understanding the different business loan products that are available in the marketplace is very important when making a good decision to acquire financing for your dental practice.
How to Choose the Right Dental Practice Loans
When beginning the process of potentially financing your dental practice the first question you 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 business loan product you will choose and drive what is 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
10 Best Dental Practice Loans – What Are My Options?
SBA Loans for Dental Practices
SBA loans are business loans backed by the Small Business Administration and provide guarantees to the issuers of these loans in case of default. SBA loans are a great product for larger amounts of capital that require long term financing. Unfortunately, the qualifications are stringent and do require significant paperwork and time for decisions but they are well worth it in that they offer attractive interest rates and time durations to payback.
Product Overview
Rates: Interest rates 6.5% up to prime plus 1% to 2.75%.
Terms: 2 to 25 years
Fees: 1% to 4% origination fees
Payments: Monthly
Credit Standards: Must have good to excellent credit and deep credit history
Benefits and Best Uses of SBA Loans for Dental Practices
SBA loans offer attractive business loan terms for dental practices which allow for larger amounts to fund big projects and business expansion. They lack flexibility as they are not business lines of credit where you can draw money as you go. You receive a lump sum upfront and no ability to draw money with a fixed term and fixed payment.
Traditional Bank Loans for Dental Practices
Whether it is to start a new practice or acquire an existing practice or get additional working capital there are some banks that will help you finance the practice. Bank business loan rates are competitive and are typically 4.5% up to Prime plus 1% to 2%. These products do require significant paperwork and are not easy to qualify for. They have a very low approval rate. Less than 20% of all bank business loan applicants receive approval from a bank and fund.
Product Overview
Rates: Interest rates 4.5% up to prime plus 1% to 2.75%.
Terms: 1 to 5 years
Fees: 1% to 3% origination fees
Payments: Monthly
Credit Standards: Must have excellent credit and deep credit history
Benefits and Best Uses of Traditional Bank Loans for Dental Practices
Traditional bank financing has great rates, good terms, and low fees. The use of the money can be used for a variety of different purposes such as acquiring an existing or new dental practice, business expansion, or working capital.
Business Lines of Credit for Dental Practices
Business lines of credit are the most flexible business funding products. Business lines of credit operate a lot like a credit card in that it is an open revolving line of credit that allows for draws at any time up to a specific credit limit.
Product Overview
Rates: Interest rates starting at 4.5% and up depending on many factors
Terms: Revolving with renewals quarterly, 6 months or 12 months
Fees: 1% to 3% origination fees
Payments: Monthly
Credit Standards: Must have excellent credit and deep credit history
Special features: You can draw as little or as much money up to a credit limit at any time
Benefits and Best Uses of Business Lines of Credit for Dental Practices
Business lines of credit have great rates, good terms, and low fees, but one word can explain why business owners choose this product, Flexibility. The ability to draw money at any time and use it when you need it is a must for any business owner’s financial toolbox. It is not uncommon for businesses to have this business product along with other products like term loans and credit cards. The use of the money can be used for a variety of different purposes but most common is general working capital and cash flow needs.
Long Term Business Loans for Dental Practices
Over the last decade, long-term business loan offers have become more prevalent. Long-term is defined as terms over two years in duration, Rates vary greatly and can start at 6.99% and go up to as 28% based on credit and financial condition of the business. Expect to provide a lot of documentation to qualify and get approved as the rates and terms are attractive. Application approval rates on these programs are in the range of 15% to 20%s, so only really healthy and profitable businesses get approved. Credit standards are more stringent than short term business loans.
Product Overview
Rates: Interest rates starting at 6.99%
Terms: 2 to 5 years
Fees: 1% to 3% origination fees
Payments: Monthly, bi-monthly
Credit Standards: Must have excellent credit and deep credit history
Benefits and Best Uses of Long Term Business Loans for Dental Practices
Long term business financing has great rates, good terms, and low fees. The use of the money can be used for a variety of different purposes such as acquiring an existing or new dental practice, business expansion, or working capital.
Short Term Business Loans for Dental Practices
Short term business loans are loans that have a fixed lump sum offered upfront, with a fixed payback amount over a fixed term of time typically 6 to 18 months. When you cannot qualify for more traditional business loan products, short term business financing can be a great alternative. In defining short term business loans means terms typically from 6 months up to 18 months to repay. Rates are based on factor costs and not principal & interest and cost more than traditional business loans. The good news is these products require very little paperwork and credit requirements are much more forgiving than traditional business loans.
Product Overview
Rates: Factor rates starting at 1.10 up to 1.45
Terms: Typically 6 to 18 months
Fees: 1% to 5% origination fees
Payments: Weekly, bi-weekly, monthly, and in some cases daily Monday-Friday
Credit Standards: All credit accepted from poor to excellent
Special Features: Fast process. Approval of funding can be same day to 24 hours
Benefits and best uses of Short Term Business Loans for Dental Practices
Short term business financing has higher rates, shorter terms, and fees but can come into the rescue for dentist practice that is in need of the money now and can’t get approved for more traditional business loan products. The use of the money can be used for a variety of different purposes but most commonly used for working capital and cash flow problems.
Merchant Cash Advance for Dental Practices
Merchant cash advances, also known as a purchase of future sales agreements, advance a fixed sum of money upfront to a business owner with a discounted purchase price to pay back that is a greater amount than the lump sum upfront provided to the merchant. The advance is repaid by taking a fixed percentage of future credit card sales batches until the payback amount is paid back in full, there is no term limit with advances as the fixed back percentage never changes. The time frame to pay back depends on the volumes of future credit card sales. It’s estimated that merchant cash advances are set up with expectations of being repaid in 6 to 18 months but again it may be longer or shorter depending on future credit card sales of the dental practice.
Product Overview
Rates: Factor Rates between 1.09% up to 1.45%
Terms: No term limits estimated payback periods are 6 to 18 months
Fees: Typically 1% to 5% origination fees
Payments: Fixed percentage Splits from future credit card batches
Credit Standards: All credit types considered from Poor to Excellent
Benefits and Best Uses of Merchant Cash Advance for Dental Practices
Although merchant cash advances cost more than traditional bank financing with higher rates and fees. The flexibility of repayment which is attached to the fixed percentage of future sales really helps businesses that fluctuate in sales or are seasonal businesses. The use of the money can be used for a variety of different purposes but a majority of money is used for working capital or cash flow needs
Business Cash Advance for Dental Practices
Business cash advances, also known as a Purchase of Future Sales Agreements, advance a fixed sum of money upfront to a business owner with a discounted purchase price to pay back that is a greater amount than the lump sum upfront provided to the merchant. The advance is repaid by taking a fixed percentage of future overall sales, which is different than a merchant cash advance which takes a percentage of future credit card sales.
Payments are collected by a fixed daily or weekly payment deducted from business bank account which is based on the fixed percentage of future sales. Every month, if the fixed payments take more than the set future percentage of sales than a refund back to the merchant can occur. This repayment continues until the payback amount is paid back in full, there is no term limit with advances as the fixed back percentage never changes. The time frame to pay back depends on the volumes of future overall sales. It’s estimated that business cash advances are set up with expectations of being repaid in 6 to 18 months but again it may be longer or shorter depending on future credit card sales of the dentist practice.
Product Overview
Rates: Factor rates between 1.09% up to 1.45%
Terms: No term limits estimated payback periods are 6 to 18 months
Fees: Typically 1% to 5% origination fees
Payments: Fixed ACH payments weekly or daily Monday-Friday
Credit Standards: All credit types considered from poor to excellent
Benefits and Best Uses of Business Cash Advance for Dental Practices
Business cash advances provide money to businesses in cases in which traditional financing is not an option. The costs are higher than traditional financing, but used properly can be a real lifesaver for the dentist practice. The use of the money can be used for a variety of different purposes but a majority of the reasons are cash flow or working capital to help the business.
Equipment Financing for Dental Practices
Equipment financing Loans and Leases are available for dentist practices look to purchase equipment and willing to use that equipment as collateral.
Product Overview
Rates: Interest rates or factor rates
Terms: 1 to 5 years
Fees: 1% to 3% origination fees
Payments: Monthly
Credit Standards: Must have good to excellent credit and deep credit history
Unique Features: Fast process, limited paperwork required
Benefits and Best Uses of Equipment Financing for Dental Practices
Equipment financing has great rates, good terms, and low fees. The process is fast and simple and funding can occur in as little as instantly.
Business Credit Cards for Working Capital
Like credit cards, Business credit cards function as a revolving credit line in which a card is issued that can be used for both purchases and payments. Most businesses use business cred cards in conjunction with other business loan products
Product Overview
Rates: Interest rates start at 0% up to 28.99%
Terms: Revolving, no term limits
Fees: 1% to 3% origination fees
Payments: Low flexible monthly payments
Credit Standards: Must have good to excellent credit and deep credit history
Benefits and Best Uses of Business Credit Cards for Working Capital
The flexibility and access of money that business credit cards offer are second to none. The ability to both purchase items and use it to pay for bills or invoices can also free up short term cash flow problems and is very convenient.
Dental Practice Acquisition Loans
Whether is to start a new practice or acquire an existing practice there are banks the will help you finance the purchase up to 100%. Dental Practice acquisition loan rates are competitive and are typically 4.5% up to prime plus 1% to 2%. These products do require significant paperwork and are not easy to qualify for.
Product Overview
Rates: Interest rates 4.5% up to prime plus 1% to 2.75%.
Terms: 5 to 15 years
Fees: 1% to 3% origination fees
Payments: Monthly
Down payments: 0% up to 25% down payment requirements
Credit Standards: Must have excellent credit and deep credit history
Benefits and Best Uses of Dental Practice Acquisition Loans for Dental Practices
The use is pretty obvious. Clearly, the best use of this type of business funding is to acquire an existing or new dental practice. The benefits of this type of financing allows the dentist to operate their own practice.
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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 business.
Applying for a loan with AdvancePoint Capital is as simple as a 1, 2, 3, 4 process. Start with this online form, then fill out the short application page, wait a few hours for your approval, and then get your money!
AdvancePoint Capital offers an easy business loan experience. Our customers love the fast, streamlined process and high approval rates that come from working with us. All credit scores are considered.