Whether your dental practice is just getting off the ground or you’re starting to plan an expansion, you need capital to achieve your goals. How can you find the best small business loans for dentists? Here’s what you need to know to navigate the financing landscape and get funded fast.
Differentiating your practice is key in the rapidly growing dental industry.
Trends show 2.4% growth per year between 2014 and 2019. The market is expected to experience a compound annual growth rate of 5.8% between 2019 and 2024. As many as 29,000 new dentists could enter the field by 2026!
But to break into the market, you need to clear the hurdle of startup costs.
According the American Dental Association, you’re looking at around $500,000 to get your practice up and running. That’s some serious sticker shock, especially if you’re carrying anywhere near the average of $287,000 in dental student loan debt. Small business financing can help you cover those initial costs and support your practice as it grows.
There are plenty of financing options for dentists, but the right loan is the one that provides enough for:
Banks look for stellar credit scores and squeaky-clean financial histories when evaluating loan applications. However, some offer funding specifically for dental practices or work with the ADA to provide dental loans, which can take some of the hassle out of qualifying.
Rates start at around 7%, but you may be able to get a lower rate if your credit is good and you run an established practice. Plan to spend up to 25 years paying the loan back.
Not interested in being in debt for two decades? Online fintech lenders provide short-term loans in smaller amounts and deliver the funding much faster than banks. Rates tend to be higher – starting between 4-7% – but there’s some flexibility for applicants with good credit.
You can get approved for a short-term online loan in a few hours and receive funding within one business day. Terms range from a few months to a few years, and payments are usually made via automatic withdrawals on a daily or weekly basis.
The SBA loan process tends to be lengthy and selective, so you’re better off choosing another option if you’re not running an established practice with a strong financial standing. Qualifying practices can access up to $5 million in funding, 75% to 85% of which is guaranteed by the SBA. Funding is best put toward building projects, expanding your practice or investing in new equipment.
Rates on SBA loans start around 7.75% but vary by lender; terms range from 5 to 25 years.
Because of the large investment required to establish a new dental office, it’s not always easy to get a startup loan.
Lenders like to see some cash flow history and a steady stream of loyal patients, which you won’t have if you’re right out of school.
Moving from a shared office to an independent practice can put you in a better position. Experience and certification open doors for dental startup loan options from lenders like National.
Equipment and technology have a big influence on the quality of care your patients receive.
An equipment loan makes it possible to access the newest and best tools, even if your credit isn’t perfect. Lenders may be willing to give you a little leeway with your equipment purchase acting as collateral for the loan.
Interest rates for up to 100% financing start at around 6% from online lenders, but may be lower through banks. A maximum of seven years is typical for loan terms.
For more freedom and flexibility with funding, you can apply for a line of credit. This gives you a ready source of cash to fund expansion projects, hire additional staff members to take on more patients or cover expenses during the gaps between seeing patients and receiving insurance reimbursements.
With a revolving credit line, you only make payments on what you draw, and every payment replenishes available credit. Banks and online lenders offer line of credit options with rates starting at 7%, and practices in good financial standing can receive several million dollars in credit.
If you want to get competitive rates and flexible terms without spending a ton of time “shopping around” for small business loans for dentists, get in touch with a business financing advisor at National Business Capital & Services.
Dental practice loans with special benefits for professionals in the industry are also available in amounts up to $5 million with approval in as little as 24 hours. Find out how much you can qualify for, and start taking your dental practice to the next level!
National Business Capital & Services is the #1 FinTech marketplace offering small business loans and services. Harnessing the power of smart technology and even smarter people, we’ve streamlined the approval process to secure over $1 billion in financing for small business owners to date.
Our expert Business Financing Advisors work within our 75+ Lender Marketplace in real time to give you easy access to the best low-interest SBA loans, short and long-term loans and business lines of credit, as well as a full suite of revenue-driving business services.
We strengthen local communities one small business loan at a time. For every deal we fund, we donate 10 meals to Feeding America!
Matt Carrigan is the Content Writer at National Business Capital & Services. He loves spending every day creating content to educate business owners across every industry about business growth strategies, and how they can access the funding they need!