Dental Practice Loans
As a successful dentist, your patients expect a lot from you: state-of-the-art technology, updated equipment, safe pain relief options, modern facilities, and of course, your expertise. You need the funds to surpass these expectations and grow your dental practice, but capital isn’t always readily available.
Dental practice loans might be the answer. These industry-specific funding solutions can help you cover expenses and invest in your business when you’re short on funds. Not sure how to navigate the world of dental practice loans? We’ve got you covered. mCashAdvance™ has put together a quick guide to answer all your questions about dental practice loans. Keep reading to learn more!
Why Would Dentists Need Dental Loans?
Building and maintaining a successful dental practice comes with high costs. Between your waiting room furniture, dentist equipment, office and medical supplies, employee salaries, and cleaning crew, the cost of running your business can quickly add up. It’s difficult for most dentists to meet these expenses with patient payments alone. This is especially when you are first opening your dental practice. Even once you have a steady clientele, many dentists get stuck waiting in the notorious gap between patient co-payments and insurance company payments. Dental loans can help dentists meet the upfront costs of running or expanding their business until they can bring in the necessary revenue.
How Can You Use Dental Loans?
Dentists can use money from dental financing companies for almost any purpose to help them invest in their business:
- Expanding your dental practice
- Hiring additional staff
- Moving to a new location
- Renovating or upgrading your premises
- Purchasing medical or office equipment
- Paying employee salaries
- Refinancing debt
Types of Loans for Dental Workplaces
There are several dental practice financing options available to dentists. We’ve compiled a list of the most common types of loans for dental workplaces to help you find the right solution for your business.
Dental Practice Bank Loans
Many banks offer loans for dental workplaces at excellent rates with reasonable repayment terms. However, banks tend to have a long, rigorous application process with low approval rates, especially if you have defects in your business’s credit history. This is a great financing option for a successful dental practice that is looking to expand or renovate.
Private Dental Practice Financing
Many private lenders offer dental practice financing with less rigorous applications, higher approval rates, and much faster turnaround time. Private funders can often send the money to your business account in a matter of days, and most require less documentation than banks. However, non-bank loans for dental offices may come with steeper interest rates and less favorable repayment terms. This might be a good option if your business has a bad credit score or needs funds urgently.
Dental Practice Loan Refinance
If you’ve already taken out a loan for your dental workplace, you may want to refinance to get a better interest rate, consolidate multiple debts, or liquidate some cash for pressing expenses. Refinancing can be a good option in these cases, but it’s essential to calculate the costs first. A few things to bear in mind:
- Some loans may have an early repayment or settlement fee that wipes out any potential savings from refinancing.
- A lower interest rate usually means a longer loan period- make sure you won’t end up paying more interest over the life of the loan than you are paying now.
- Refinancing your dental practice loan means taking on more debt for longer. Consider alternative options, like MCA’s, which give you cash upfront without technically creating more debt.
SBA Loans For Dental Practices
These government-backed loans from the Small Business Association offer excellent loan rates and terms to help small businesses invest in their own growth. However, they require a lot of documentation and can be challenging to get approved for, especially if you are starting out or have a bad business credit score. SBA loans are perfect for dental practices that are performing well and looking to expand their operations.
Dental Equipment Financing
This specialized kind of loan assists dentists with getting the capital they need to purchase dental equipment for their office. Dental equipment financing can help cover:
- Dentistry chairs
- LED lights for examinations
- Dental hygiene tools
- X-ray machines
- Drills and implantation tools
- Specialty dental equipment, such as orthodontic or endodontic tools
Dental equipment financing has a predefined purpose, so it lacks flexibility in how you can use the money. In addition, dental financing companies often require dentists to put a down payment of up to 20% on the equipment. On the other hand, this type of financing generally has excellent rates. So if you know you want to purchase expensive equipment and have the cash for a down payment, dental equipment financing can be the right option for your business.
Dental Loans for Bad Credit
Keeping a dental practice running is no easy feat — especially in today’s super-competitive market. Your business may have run into cash flow issues in the past, and your credit score might reflect that history. Don’t worry. Many dental financing companies are happy to fund dental loans with bad credit. Each lender has its own criteria, but most will take other factors into account besides your credit score. These factors include things such as time in business and monthly revenue. This can boost your chances of approval for a dental loan even if you have a bad credit score.
Am I Eligible for Dental Practice Financing?
Every lender has its own set of qualifying criteria for funding a dental practice, but here are some basic guidelines:
- In business at least 2-6 months
- Minimum monthly revenue of $5,000-$8,000
- A minimum credit score of 600
- Maximum 3 days per month in the negative on your business account
- No current bankruptcies
These are the basic criteria for most lenders. Generally, applying for a loan with a higher credit score, higher monthly revenue, and longer time in business will further boost your chances of acceptance and securing better loan terms.
How Financing Can Help You Start Your Dental Practice
If you are opening a brand new dental clinic, you’ll need a lot of upfront capital to cover some significant expenses. Buying or renting premises, paying utility bills, outfitting treatment rooms with dental equipment, stocking medical and office supplies, purchasing waiting room furniture, and hiring employees can add up quickly before you’ve seen your first patient.
Dental practice start up loans are specially designed to assist dentists in opening a new dental practice. When you first start a dental clinic business, you won’t yet have monthly revenue or bank statements to show potential lenders. Your business credit score will also likely be low, as you won’t have any credit history.
This makes dental practice start up loans riskier for the lender, so they tend to have higher interest rates than traditional dental practice loans. Lenders usually require a detailed dental startup business plan to show that your business has the potential to succeed and is a good investment. Although these loans have higher interest rates, they can give you the capital you need to start your dental practice and get it running successfully.
Equipment Financing FAQs
The amount of funding you can get for your dental practice loans depends on your lender, your business profile, the purpose of the loan, and the amount of time you need to repay. Many lenders offer loans from $5,000 to $1,000,000, but others can fund up to $5,000,000 for qualifying dental clinics.
Most lenders offer loan terms between 2-18 months with interest rates ranging from 5%-45%. Dental practice loan terms and interest rates will vary depending on your lender, the type of loan, and the details of your business profile.
Yes, some lenders will still provide dental practice loans to dentists who have declared bankruptcy in the past. However, most require the bankruptcy to have taken place at least seven years before your loan application.
Dental Practice Loans: In Conclusion
At mCashAdvance™, we believe that financing should never stand in the way of pursuing your dreams. Whether you want to open a new dental practice or renovate your clinic to improve your patient experience, we hope our guide has given you the tools you need to confidently navigate the world of dental practice loans.
Don’t Allow a Lack of Funding
to Hold your Business Back
It’s Time To Move Your Business Forward!