Different Ways to Finance Your Dental Practice
It is a meticulous process to start and run a successful business. It is not only about the good or bad days that define that business, but everything in between. Everything decision you make impacts the outcome of the business significantly.
Like with all other businesses, how you go about a dental practice dictates the success thereof. Finances, in that case, play a big role in whether or not the practice runs smoothly.
What Is Dental Practice Financing?
It is a strategy for which a dental expert has a solid plan for financing the operating of their dental practice. Whether you plan on starting a new dental practice or simply improving the existing one finances play a big part in the whole process. It is about creating a functional and effective space where you can offer your patients the best value, guided by your vision of service.
The good thing about dentistry as an industry is that it is recession-proof. This means that lenders and investors consider the business as a low-risk investment, making your financial options easier.
Finding A Suitable Financing Solution for Your Dental Practice
Once you are on the search for a financing option for your practice, you may need assistance from professionals in AFTCO dental. The role of dental consultants, in this case, will be to help you determine the best course of action for your business. Sometimes it matters what your professional financial looks like. However, there is still a viable financing option for you and your practice. Some of those you should consider are:
- Traditional bank loans – if you are already running your dental practice, then there is a trusted banking institution you are working with to handle your finances. This is a good place to start. You can seek a quality loan from your bank as the first option. From traditional banks, you can expect a $30,000 to $5 million offer, with a repayment term of up to 10 years at an interest beginning from 7%. The acceptance of the application can take between 2-6 weeks. However, you still will need to discuss more with the lending bank to learn more about the loan.
- Small Business Administration (SBA) loans – it is a good financing option for small businesses. The funds from this source are best for dentists seeking to start a dental practice since they are versatile for use. With SBA loans, you can expect a $5,000 to $5 million offer, with a repayment term of between 5-25 years at an interest beginning from 6.7%. One thing to note is that the process of applying for SBA loans takes longer to process and is more arduous than other lenders.
- Equipment financing – whether you are improving your dental practice of building one from scratch, equipment is a big part of your success story. From x-ray machines and other dental tools to basic items like chairs and tables, you will need equipment for your facility. Usually, this can cost you hundreds and thousands, which is why you need financing. Equipment financing allows you to take on all the equipment you need, and be making periodical payments for them. The good thing is that none of your personal assets will be on the line. Instead, the equipment themselves are used as the collateral of the loan. The other thing is that you can also seek other financing options alongside this loan.
- Business lines of credit (LOC) – thus is one of those financing options you get for emergencies and unforeseen events. A line of credit allows you to draw money, repay, and draw again. The one thing to consider is that the limits are usually lower than for other loans, and the interests can be higher. The interests range between 7%-25%, and the repayment terms between 6 months to 5 years.
Which Financing Option Is the Best?
Each financing solution has some advantages to it, proving likable than its counterparts. However, you must go for an option that best suits your needs as an individual and a business owner. How urgently you need the funds for your practice, should also influence the type of financing solution you pick. For such things, it is usually best to consult an expert that can help you logically analyze your option and pick out the best.