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. All Year Funding 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:
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 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:
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.
Dental Loans FAQ’s
How much can I borrow with a dental loan?
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.
What are the general dental practice loan terms?
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.
Can I still get a dental practice loan if I’ve declared bankruptcy?
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 All Year Funding, 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.
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