Are you interested in getting your dental practice up and running, but you don’t have the funds on hand to make it happen? Consider taking out a loan to finance the startup costs of your practice. Dental loans come in different types, so this article will help you learn about the most common loan types available to dentists. You’ll also discover some important things to look out for when applying for dental loans so that you can be confident that you’re choosing the right loan type for your situation.
Business Loans Dentists Should Consider
Small Business Administration Loans. An SBA loan isn’t easy to obtain, and borrowers have to deal with a lot of paperwork. However, due to the low risk associated with dentistry, SBA loans have a higher approval rate for dental practices. In addition, the 7(a) program of the Small Business Administration offers many benefits to dental professionals, including low-interest rates, long repayment horizons, and greater flexibility.
Business Line of Credit. A business line of credit can provide you with additional capital on an as-needed basis and meet your short-term funding needs. There is no lump-sum disbursement for business owners, so they borrow only what they need, and the interest rates are only calculated on the amount they borrow.
Traditional Bank Loans. Dentists have a high success rate, making lending to them a simple job. For this reason, banks tend to offer more favorable interest rates when financing a dental practice.
Non-Bank Lenders. Dentists can get business loans quickly from non-bank lenders. They are generally faster in their approval processes, have lower credit standards, and require less paperwork in comparison to the sources mentioned above.
What Can You Use a Dentist Loan For?
Loans for New Practice. An applicant who has just completed dental school can find it quite challenging to apply for a dental practice loan. Besides purchasing expensive equipment, the borrowers also need to plan for office leasing, insurance, certification compliance, staffing, continuing education, and repaying the dental school loans. In addition, dentists who are starting new practices may receive loans to cover: Project expenses, Working capital, and Construction expenses.
Expansion Loans. A dentist may want to upgrade their facilities and technology or consolidate debts incurred over the years. Loans granted to dentists with existing practices can include the following:
- Office improvements
- Practice growth
- Purchase of new dental devices and equipment
Acquisition Loans. You can purchase dental practices that are fully operational, including the real estate, clients, and equipment. Alternatively, one partner may purchase a partner’s shares under a transition agreement. Loans given to dentists buying dental practices may cover:
- Working capital
- acquisition costs
- Transition costs
Dental Equipment Loan. Maintenance and purchase of dental equipment is extremely expensive. Therefore, buying new dental equipment requires some equipment financing. Leasing or financing dental equipment may ensure greater cost savings and continuity by offering maintenance contracts and better rates.
Debt Consolidation. Dentists with several years of experience are usually eligible for debt consolidation loans. The idea of debt consolidation is beneficial if you expect faster cash flow, simplified accounting, or enhanced tax benefits.
Talk to Us
Dentists and dental practice owners can access capital from POM (Peace Of Mind) Capital & Funding Services to help them thrive in these uncertain times. If you would like to discuss dentist loan options with an experienced broker, call POM Capital & Funding Services at (631) 354-9290 or write to us at [email protected] to schedule a free consultation with our team.
POM Capital & Funding Services is a leading provider of alternative funding solutions for businesses of all types and sizes, offering commercial finance solutions and products to businesses in the Centerport, New York area and throughout the state of New York.