Business Finance
4 Financing Rights of Every Small Business Owner
The dental industry is a highly competitive field and it's only expected to increase in the coming years. According to the Bureau of Labor Statistics, the industry is expected to grow 19% by 2026, which outpaces other industries.
If you've recently graduated from dental school, you may be surprised to discover how many expenses there are to get your practice off the ground. Fortunately, there are numerous loan options available to help you improve your dental practice finances.
The type of funding that's right for you will depend on your practice, how long you've been in business, and your credit history. Listed below are five dental practice loans to get you started.
The Small Business Administration (SBA) partners with local lenders to offer a variety of loan products to small businesses. SBA loans tend to come with low-interest rates because the SBA puts limits on what the lender can charge you. And because the SBA guarantees up to 85% of the loan amount, banks are willing to lend more than they normally would.
However, this type of loan isn't easy to qualify for. The application process is extensive and you'll need a good credit score to qualify. And it could take a while for you to receive the dental practice finances, so if you need the money immediately, SBA loans aren't the best choice for you.
If you already have an existing relationship with a bank or credit union, you might consider applying for funding through them.
Receiving dental practice finances through a bank is notoriously difficult, but professional services tend to have better luck than most. Lenders like Wells Fargo and Bank of America even offer services specifically for healthcare practitioners looking to open or expand their business.
However, like SBA loans, banks and credit unions tend to have more stringent requirements. You'll have the best luck if your practice has been open for at least a couple of years and if you have a good credit score.
If taking out an SBA or bank loan isn't the right fit for your business, you can consider alternative business loans to receive your dental practice finances. Online lenders are becoming a popular choice for borrowers due to their flexible requirements.
The application process is much easier and borrowers can receive the funds in a week or less. Some online lenders will be willing to do business with you even if your credit score isn't great. However, you'll need a good credit score to qualify for the best rates.
Maybe you already have an established dental practice and are looking for funding for ongoing business expenses. If this is the case, then a line of credit could be a good choice for you.
A line of credit is kind of like a cross between a personal loan and a credit card. You receive access to a certain amount of money, but unlike a personal loan, you don't receive it all at once. You only borrow the amount you need.
So if you have a $25,000 line of credit but only borrow $10,000 in dental practice finances, you only have to pay interest on the $10,000. And once you've repaid the amount you borrowed, the funds are automatically replenished.
Maybe you need financing to cover your equipment and upgrades. In that case, dental equipment financing may be a good option. This type of financing is much easier to apply and qualify for.
Because the equipment itself can be used as collateral, you can apply for financing even if you have bad credit. However, you may need to come up with a down payment to secure the loan. And this loan won't cover any other expenses that come up as you're managing your practice.
If you currently own or are looking to expand your dental practice, you will most likely qualify for some type of financing. An SBA or bank loan will give you low rates but the application process is tedious and it may take a long time for you to receive the funds.
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