Borrowing has long been used to help many people achieve their goals sooner instead of later. But loans are not only available for personal use. There are loans for businesses that can also be used by professionals who want to further their career goals. If you’re a dentist looking to start your own practice, taking out a dental loan can give you the financial leg-up you need to get the ball rolling right away. Whether you’re a general dentist, orthodontist, prosthodontist, periodontist, or oral surgeon, you can benefit from this type of financing.
Once you have the capital you need to start your practice, it’s important that you do your research and create a checklist of the steps needed to reach your end goal. This is crucial if you want to establish your practice for the first time. Even if you have already gone through the process and are expanding your practice, it’s still good to plan ahead. To help you out, here’s everything you need to know about getting a dental business loan and starting your own practice.
Steps to Starting a New Dental Practice
Starting your own dental practice is very much an involved process, and you need to plan everything carefully to ensure it all ties in together. To keep organized, you must record everything that needs your attention so that it’s easier to keep track of. Ideally, you should create a checklist containing all the requirements and steps involved when opening a new practice. The file can also include important notes of any new ideas you may have along the way. That way, you won’t miss anything that could potentially jeopardize your project. Generally, opening a new practice can be broken down into the following steps.
Create A Detailed Business Plan
Opening a dental practice is like opening any other type of business. First, it requires a comprehensive and detailed business plan. This is a crucial document that contains your business’s blueprint. For instance, your business plan should outline the structure of your business, standard operating procedures, and important financial information, such as projected expenses and earnings. If you’re planning to finance your dental practice, it’s important that you start by creating a business plan because this is one of the first things that lenders ask for.
So before obtaining a business loan, you need a business loan that will convince lenders to approve your application. Once you have an outline of the general information, you can do additional research to help you develop the best business plan. At this stage, you should also decide whether you want a partner or want to work alone. If you decide to find a business partner, you can then work on the business plan together.
Get a Dental Business Loan
You can now approach your preferred lender to secure financing with a business plan in hand. When applying for a dental loan, there are several steps you have to take, which we will fully explore in a separate section. For now, it’s important to know that there are many financing options you can choose from, and it’s important to compare them first before deciding the best option for you.
Secure Permits and Licensing
This is one of the most important steps when opening a new dental practice. Having all the necessary permits and licenses ensures you’re legally compliant with the laws and regulations in your area. To apply for permits and licensing, you’ll need a business license from your state, a tax ID number, and your business organization papers, so make sure you have all the documents prepared beforehand.
Invest In Your Business Assets
Once you secure financing, you now have the working capital to cover all the expenses that come with opening a practice. Your first port of call should be purchasing dental equipment and acquiring the commercial property you need to open your practice. Besides dental equipment, you will also need office equipment, such as computers, desks, and office supplies. Avoid the temptation to buy cheap equipment and supplies but focus on quality products that offer value for money in the long term. So take the time to shop around and only deal with reputable suppliers that have your best interests at heart. When purchasing your equipment, you may need the help of moving services to help you transport the equipment to the required location.
Spruce Up The Design And Layout Of Your Dental Office
When deciding the location of your dental office, it’s vital to conduct heavy research. The ideal place should be conveniently located, not have too much competition, and there should be a market for your services. Once you have obtained a lease to the commercial property of your choice, you’ll need remodeling services to help you achieve the design and layout you want. Although you should have some prepared ideas, you need to leave this part to the pros.
Remodeling services will help you create the perfect atmosphere you envision and which will be attractive to your clients. You should also consider hiring a landscaper to help you create a good first impression when clients first arrive on the premises. At this stage, working on improving the appearance and function of your dental office will require a lot of your time. But if you have other commitments, taking advantage of property management services can help you achieve the results you’re looking for without taking up too much of your time.
Hire Personnel For Your Dental Office
You’ll need supporting staff when opening a dental practice, so you should now focus on who to hire and how many people to hire. Typically, you’ll need someone to manage the front desk as well as a dental assistant. If you’re not planning on having an in-house accounting department, consider outsourcing some of the work generated by your business to a small business accounting service that also acts as a tax relief service. In any case, make sure all your staffing needs are covered while ensuring that there’s enough room in your business budget to cover their salaries.
Develop a Marketing Strategy
When you open your dental practice, it’s normal for a new business to start out slow. To start bringing in more customers and revenue, it’s important to have an effective dental marketing plan in place. Fortunately, marketing your business doesn’t have to be expensive in this day and age. You can begin by setting up a business website and adding SEO-optimized copy that will help you get noticed when people search for your services online. The field of dentistry tends to be competitive. Still, with the right marketing strategy, you’ll be able to engage and attract more traffic to boost your business bottom line even before your practice fully kicks off.
Getting A Business Loan For Your Dental Practice
One of the steps that are potentially included in the journey to opening a new dental practice is getting a business loan. Since this is a route that many dentists take, it helps to have more detailed information about the process of applying for a dental loan.
What Are Loans For Dentists And How Do They Work?
Loans for dentists are business loans that provide dental practitioners and professionals with the funding they need to operate their business. They can be used for a wide range of purposes, including establishing a new dental practice. Loans for dentists work like any other type of loan in that the creditor will provide you with the funding you need, and you can repay the money over a fixed period. This is advantageous because you’re spreading out the cost of opening a new practice, and this makes the whole project affordable.
Repayment terms can be as long as ten years, but keep in mind that the longer you take to repay the business loan, the more expensive it becomes because of the accumulation of interest. When searching for a lender, make sure you shop around first and compare your options. Consider factors like borrowing limits, repayment terms, interest rates, and loan fees and charges before deciding the best option for you.
Types of Business Loans For Dentists
If you’re looking to finance your new dental practice, here are some top lending options to consider.
SBA loans are known as Small Business Administration loans and are provided by lenders who have partnered with SBA. Since SBA guarantees up to 90% of these loans, the interest rates on SBA loans tend to be lower because of the lender’s reduced risk. SBA loans also come with flexible borrowing limits of up to 5M and repayment terms of up to 25 years. While SBA loans usually have many advantages over other types of loans, they tend to have strict requirements, and the application process involves a lot of paperwork and takes a lot of time. In addition, you may need to have strong credit and provide collateral for the loan.
Traditional Loans From Banks
Traditional banks and financial institutions also offer to finance to dentists. Sometimes the financial products are generic, while other products are specifically designed for dentists. The advantage of this type of loan over SBA loans is that the application and approval process is often faster, so you can expect to receive the funds you need quickly.
Business Loans From Alternative Lenders
Today, there are many online lenders that are setting up shop and offering their services to dentists. These alternative lenders offer a wide range of financial products, including small business loans, secured real estate loans, and invoice factoring. They offer a smoother and less restrictive application process than commercial and SBA banks. In addition, it’s possible to receive funding in a short period of time. This type of loan is ideal for businesses that need quick funding but don’t have a long financial history or solid credit.
Business Line Of Credit
Business lines of credit are different from your typical loan because they are revolving. That means you only have to apply for the loan once. You will then have access to a pool of funds that you can use up to a certain limit. You will then pay back interest only on the amount you owe. A business line of credit is ideal for covering unexpected expenses that come up when opening a new practice.
Dental Equipment Loans
As the name suggests, a dental equipment loan is designed to help you purchase new equipment needed for your practice. Dental equipment remains one of the biggest expenses that need to be covered when opening a new practice. You can purchase a wide range of assets with a dental equipment loan, such as imaging equipment, dental chairs, office equipment and supplies, and other required instruments. Keep in mind that dental equipment loans can only be used to purchase equipment. The equipment being purchased is often used as security for the loan.
Specialized New Dental Practice Loans
Some lenders offer new dental practice loans that are designed specifically for practitioners that want to open a new office. The advantage of working with this type of lender is that you get personalized service tailored to your current financial needs.
Qualifying for a Dental Business Loan
Requirements for dental business loans vary from lender to lender. The lending criteria also depend on the type of financing product you’re applying for. However, there are general requirements that you need to know about. For instance, you must apply as a business entity, and you should submit your business plan along with the application. It’s also important to have strong credit, though some lenders also offer to finance to bad credit borrowers.
The Final Word
A lot of thought goes into opening a new practice, whether it’s for the first time or part of your business expansion plan. Having a checklist to work with can help streamline the process. You should go over the steps outlined above and make adjustments where necessary as you implement each step to open your new practice.
One of the key steps to opening a new dental practice is obtaining finance. Now that you know what your general financing options look like, it’s easier to decide on the type of business loan you should apply for. Financing gives you the working capital you need to make your new dental practice a reality. You can use it to purchase equipment, cover wages, and other additional expenses. That way, your business will not start off with cash flow problems.