Let’s face it; running a dental practice is expensive. The startup costs alone are some of the highest in any industry, and the massive student debt that many fledgling dentists have looms over them like a grim reaper. Even for the more established professionals, hard times hit when you least expect it, and you might suddenly find yourself struggling to pay the bills.
You might also need financing for good things; perhaps you’re planning to expand your practice, or upgrade your dental equipment. Maybe you’re about to relocate to a new area with more potential for growth. Financing can greatly accelerate these plans and help you become more successful.
With these in mind, it’s not at all surprising that more dentists are taking out loans these days. You won’t have a lack of choices, as many financial institutions specialize in lending to dentists, but you definitely want to find the best deal possible. How can you accomplish this?
Reviewing Your Finances and Goals
The amount of money you will borrow, along with the terms and duration of the loan, depends on what you actually need help with. Take into account your current and future expenses, cash flow, collectibles, and other financial concerns. Have a clear plan for what you will do with the money, and come up with a budget.
Many lenders will help you with this process. Some, like edentalmarket.com, review your practice financing and put together an ideal loan package based on your requirements. This is ideal if you tend to leave financial matters to your practice manager, or if you are too busy attending to patients to do it yourself.
Factors that affect Rates and Loan Approval
As you probably expect, your credit rating plays a large part in getting a good loan. Very few lenders will take a risk on someone with a score below 600, so make sure that you pay close attention to this.
Insurance is another important factor. Most lenders, unless you are borrowing a relatively small amount, will require you to have life and disability insurance. This is because your practice depends entirely on you; if you’re not in the clinic, you aren’t making money. Having your insurance in place before seeking a loan is generally a wise decision.
Shopping around and Making an Impression
Getting quotes from multiple lenders will allow you to find the best possible terms, but this can be a time consuming process unless you do it through an online service. Once you meet a lender, it’s important to make a good impression. Here are several tips:
• Expect hard questions like how you will pay back the money if things get tough, and have your answers ready beforehand.
• Keep the lender’s attention and interest by responding quickly, decisively, and with confidence.
• Don’t just be another dentist; sell them on the merits and advantages of your practice, along with your own plans for it.
Getting a loan is always daunting, but this guide will hopefully get your practice the financing it needs to reach the next level.