Dental Practice Loan
The most successful way to get a dental practice loan is against the assets of the practice or against the sales of the practice.
For this dental practice loan, the dentist can use equipment assets, so almost all Dental Practices pre-qualify for this loan against dental equipment. Equipment that can be used include Delivery stations, such as Pelton Crain Chairs, X-ray units, patient stools, autoclaves, hand pieces, vacuum pumps, dental curing lights, compressors, alloy grinders Autoclaves, stools, cabinetry, and more. After reviewing the asset list that can be used, the dentist will know which pieces of equipment can be used and understand the requirements and benefits of both the asset based program and the gross sales financing.
This loan using dental equipment chairs or x-rays can obtain significant funding amounts through the combination of both programs because they are using both their sales and their equipment assets. Many practices obtain over $200,00 through both of these funding programs and as much as $250,000 to $300,000. Since all dental practices have sales and equipment, all practices should be able to obtain funding through both of these 2 programs.
Does my particular Dental Practice qualify for a Dental Practice Loan? Basic general guidelines include:
– $7,500 to $250,000
– 3 Months Time in Business
-Approximately 500 + credit score
Complete the “Contact Us” Mini App on the menu above or button below. We have a team of industry specialists with significant experience completing a Dental Practice Loan.
This financing, based on hard equipment assets allows the practice to use working capital for any reason, including expansion, hiring, renovations, equipment, working capital, advertising, any reason.
No application fees or upfront fees.
More difficult transactions are done routinely.
– The financing process generally takes 5 to 10 business days. Funding normally occurs in 1-3 business days after the transaction is completed.
If a Dental Practice is profitable and has equipment assets, it is to the Practice’s benefit to use the equity in their equipment for other business needs, rather than to leave the equity in the equipment.
Isn’t depreciation a significant issue in this type of this type of Dental Practice Loan?
Small Business Loans Depot’s Dental Practice Loan program is different from other programs. Our program obtains up to 70% of the price at purchase of the dental equipment. A practice is also able to combine or add their Computer equipment including software, into the transaction. This includes Servers, Desktops, Laptops and software.
This Dental Practice Loan is set up partially as a lease, which allows for significant tax advantages, including being able to write off the full payment similar to the well known Home Mortgage write off.
For the program based on the gross sales of the business, the funding is based primarily on the most recent cash flow of the business. The dental practice provides a one page application and the most recent 3 months complete business checking accounts statements. Credit is only a minor factor for this program. Credit bureau scores of 500 and higher are acceptable under this program. In some cases, scores lower than 500 may be accepted.
Once the statement are received, the main numbers that are looked at for each month are the average daily balance, the total dollar amount in deposits per month, the number of deposits per month. The beginning and ending balances are reviewed however they are not main considerations in the review.
03/15/2015 – For immediate release. New Smiles Dental obtains $300,000 dental practice loan for expansion. Dr. Mike Brower announced, “New Smiles Dental will complete it’s 3rd location expansion in the Sacramento, CA area. With this location, we will have a city wide presence in the Sacramento area. This capital line will allow us to add additional staff and expand marketing efforts through 2015. We expect to become leader in Dental in the Sacramento area with future plans to expand into the Ft. Worth area. This line will allow us to achieve these goals.”
01/09/2015 – Oregon Dental receives a $200,000 dental practice loan against their delivery station and X-Ray units. President, Dr. Stephen Bayan states, “With this funding, Oregon Dental can open a second location in the Portland, OR market and become a leader in both general dentistry and pediatric dentistry. We will work with SmallBusinessLoansDepot in the future as we continue to expand.”
FAQ’s, Frequently asked questions:
Question: How long does the process take?
Answer: The entire dental practice loan takes approximately four to eight days from start to finish for the leaseback option. Funds are wired into the customers business account on the last day. The loan based on gross sales option takes approximately four to eight business days from as well. The customer should expect funds to be wired into their account within eight day for the gross sales option.
Question: Are there limitations on the type of assets that can be used in the transaction? Can practice furnishings be included in the transaction? Answer: In most cases, only hard dental equipment can be included, such as Patient chairs, full deliver stations, X-Ray equipment, Cavitrons, etc. However, items such as cabinetry, sinks, as well as computers and computer software may be included in the transaction. Items that cannot be included in any case are regular furniture such as chairs in the waiting room, art, and regular tables.
Question: What is the amount we can qualify for? Answer: The amount your business has the opportunity to qualify for in this Dental Practice Loan depends primarily upon the time in business, the business credit, the credit of the owner(s), and the amount requested. Other factors may include the details of the collateral, the value of the collateral, the company’s cash flow, bank account statements and financial statements. All of these factors may not come into play for any given request. It will depend on a case by case basis which of these factors have an affect on the request?
Question: Will a signer, or guarantor be required, or can the request be approved just in the name of the company? Answer: In most cases a signer will be required. In some cases, the Corporation may qualify on it’s own. In such cases, it will be approved based on the business credit and often the financial statements. If the business credit, such as the Dun & Bradstreet is strong, lower amounts up to $50,000 may be approved. For larger amounts, simply having strong business credit will not be enough and financial statements will be required. If the ownership for the dental practice loan request is represented by more than one person, the other owners may be needed or required as signers. In general, over 50% ownership is required on the requests. If one signer is less than 50% ownership, the request will not be approved. If one signer has 51% ownership, this will be enough in most cases.
Question: How many number of months can this be for? Answer: These can be arranged for 12, 24, 36, 48 or 60 months.
Question: How does the transaction reflect on my credit report? The transaction does not show on the signer’s credit report. This is a major advantage for this dental practice loan because it will not reflect as an increase in debt of the signer. The owner of the business can obtain the capital, use it to improve the practice, repay, and even take out an identical transaction, all without it reflecting on the signer’s credit bureau. There are very few other financing options for which this is the case.
Question : What if we are approved and then realize we need more funding?
Answer: If your practice is funded $50,000 and then realizes it needs more, a second dental practice loan segment can be requested. Many dental practices realize that they needed more funding than the original request. In such instances, the practice can simply request another part for whatever they need. This happens in many cases and is common. Many of our existing customers have two loans on the books.
Question: What if there is an existing loan on some of the equipment, am I stuck?
Answer: No. In many cases, if the equipment is encumbered, a dental practice loan will still be available. If there is a small balance, the balance of the existing loan can be paid off. If there is an existing lien or UCC lien filed at the state, that lien is released when the dental practice loan is paid off. In many cases, there is a lien on only a part of the equipment. If there is equipment that is free and clear, we will use that remaining equipment. Many dental practices have done loans in the past on which a blanket lien, FF & E, furniture, fixtures and equipment. Those types of liens are common and do not represent a roadblock to our funding because they do not itemize the equipment at the state. If equipment is not itemized, it cannot be considered as part of the FF & E loan and can be used for this financing.
Question: Is there a minimum loan amount? Answer: The minimum is $10,000
Question: How does early payoff work? Answer: Due to the tax advantage, there is not a significant advantage for early payoff. Due to this transaction being set up as a lease, leases do not traditionally offer an advantage for early payoff. In most cases, the documents indicate that all payments are required to pay off the lease transaction. This allows the lender, at their discretion, to require all payments for leases that have had a difficult or slow repayment history. If the transaction is paid off early, the lender will often offer a discount which equals 5% to 10% off of the total payments. If the dental practice loan is paid off very early, for example, within the 1st 12 payments of a 60 month lease, the lender may give the borrower more of a discount at their discretion.
Question: Can I pay this dental practice loan off early and get a discount?
Answer: This will depend on when you pay it off and how your repayment history
has been until the time you paid it off. If the repayment record is clean then a discount
is normally offered. The discount normally is up to 10% to 15% off the total of the payment.
Question: Should we try to get the funding we need through one loan or do we need
to consider more than one loan?
Answer: Your business should consider more than one loan type if the business may
not qualify through one loan product. There are many businesses that are sound and
profitable, but still may not qualify for the amount they want through one loan type
or just one loan. There may be limitations with the loan product itself that may result in the business not qualifying for the loan amount they need. For example, if a business uses the loan based on equipment financing and they do not have a great deal of equipment, they should consider an additional loan product, even though they may be very credit worthy. For the loan based on the revenues of the business, the term is very short, only 12 months. The practice may not want to get a dental practice loan for the entire amount if the term is only 9 or 12 months. The business may feel that the monthly payment takes up too much for their cash flow that they need for other important business needs.
The following video provides further general information on the Dental Practice Loan, including features and benefits such as using the practice’s existing equipment, the $10,000 to $125,000 ranges, time frames to funding, ease of application, how the program can be combined with other funding programs if the dentist wants to get more funding.
Thank your for visiting our Dental Practice Loan resource page.
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