Reasons why dentists need business loans
As a dentist you may wish to buy into an existing dental practice, or to set up a new practice of your own. Either way, you’ll need to make a substantial capital investment and a business loan could give you the funds to get started.
If you’re setting up a dental practice, you could use the funds from your business loan to help you acquire the right premises in an accessible location and to fit out your new clinic with the specialised diagnostic and treatment equipment you need.
You’ll need to attract skilled dental professionals, nurses and hygienists to work in your practice, as well as efficient support staff to manage appointments and payments.
Of course, your dental practice will need patients, so you’ll need to advertise locally and via social media. Many patients will want to research your practice online before making a first booking and business loan could give you the funds you need to build a high-quality website, and to brand and market your new dental practice.
If you’re ready to expand your dental clinic, you could use a business loan to set up a sister clinic in another location, or to hire more dentists and support staff so you can service more patients.
What are the requirements for getting a business loan?
Getting a business loan can be easier than you think.
While you can still expect to be knocked back by the big banks unless you have a solid trading history, a top-rate credit rating and collateral to offer, there are plenty of alternative lenders out there willing to offer business loans to dentists.
Each lender will have their own criteria when it comes to things like credit rating, how long you’ve been in business, and how high your turnover is. If you’re higher risk (e.g. if your credit score is low) you may still be able to get a business loan, although you can expect to pay a higher rate of interest to compensate for that risk.
The most important factor ALL lenders will look at is your capacity.
Lenders need to know that you will have enough cash – after all your expenses – to cover your loan repayments.
How to apply for a business loan
If you are applying to an alternative lender for a business loan, the process is usually quick and easy:
1Create a business case to check how much you can afford to borrow.
2Prepare your supporting documents – expect to be asked for:
3Choose your lender and loan product – be sure to shop around, because costs, terms and conditions vary. Be sure to find out about hidden fees and compare all the costs of each product, not just the interest or factor rate.
4Complete a simple online application form and upload your supporting documents. Most lenders will respond within days or even hours. Some will even give an on-the-spot decision.
Grow your dental practiceSee if you qualify
What options are available to dentists?
There are several types of small business loans you could consider, to support or grow your dental practice.
Unsecured small business loan
A short-term option, unsecured business loans are usually for between 3 months and 2 years.
You can use the funds for any purpose. Many lenders will let you set a repayment schedule to suit your trading patterns.
A specific-purpose business loan secured on the equipment you are buying, such as new dental equipment.
The term will often be tied to the lifespan of the equipment. You will not be able to sell or upgrade the equipment until you have repaid the equipment finance.
Business line of credit
A business line of credit is similar to an overdraft facility, giving you access to cash up to an agreed limit, often with the right to draw, repay and redraw funds as you need them.
You only pay interest on what you borrow, but there are often set up and admin fees.
Business credit card
Business credit cards are great for covering day-to-day expenses and making purchases, but unless you clear the balance each month the cost can be extremely high.
Before entering in to any business loan agreement, be sure to seek professional advice. It’s also important to ensure you understand all of the costs (including all fees). You can get a head start by using our business loan calculator.