The purpose of going to dental school is to provide quality care to patients. At the same time, a dental practice is also a business, which makes having a degree of financial literacy invaluable. If you are planning on launching or buying into a practice, or expanding an existing one, it is important to explore all of your financing options. By enlisting the services of an attorney who provides legal services to dentists, you can avoid the pitfalls that can impede the success of your practice. This article is a brief discussion on how to finance a dental practice.
Dental Practice Financing Options
A dental practice is essentially a small business that has specific needs. As such, one option is to obtain a loan from the Small Business Administration (SBA), provided that you meet the credit criteria.
Small business loans through the SBA can accommodate a number needs — including ground up construction — that conventional lenders typically don’t provide. Instead, such lenders may be a source for commercial real estate loans or A/B loan programs. Further, equipment financing may entail entering into an agreement with an equipment lessor.
In any event, it’s a good idea to discuss the long-term implications of your venture with an experienced attorney. Together, you can consider a number of questions about you business plan. What much money do you need to launch or buy into a practice? What are your financing needs and how will use the funds? When do you need the funds, and how do you intend to repay the loan? Are your projections based on valid market data?
Applying for a Business Loan
When you are applying for a business loan, it is crucial to know your needs and not take on more than debt that is necessary or feasible. Similarly, you do want want to apply for another loan if you did not initially obtain sufficient financing. Moreover, lenders need to ensure that you have a plan for using the funds.
It is also necessary to inform the lender of the specific time you will need the funds, and to have a firm repayment plan that will not become a financial burden.Additionally, you must be able to provide prospective lenders with comprehensive documents, including a detailed business plan and income projections that are based on historical data.
In other words, before you even speak to a lender, it is important to be prepared. You need to ensure that you will still be able to repay the loans if unexpected circumstances arise. Finally, other information that lenders typically need to evaluate when making credit decisions include the amount of cash on hand and your credit standing. By providing lenders with these details at the time you apply, a lending decision can be made expediently.
The Takeaway
In the end, finding the right lender who can rapidly analyze your situation and identify the type of loan that works best can be complicated. This is why it is crucial to have proper legal representation when it comes to financing your dental practice. Contact us today.