If you’re starting, acquiring or expanding a dental practice, you’ll typically need business financing to make that happen. And choosing the right lender is critical to your business’s success. That’s why it makes sense to pick a lender that has direct experience with practice loans and understands the unique needs of a dental practice.
Finder’s business loan experts analyzed dozens of lenders offering multiple loan types available for dental practices. We ultimately chose lenders that offer loans specifically for dental practices and have expertise in the needs of these types of businesses.
Some of the criteria we evaluate include:
Interest rates
Additional fees, like origination fees
Loan amounts
Loan terms
Repayment plans
Turnaround times
Credit score requirements
Time-in-business requirements
Revenue requirements
Lender reputation
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How to compare dental practice loans
Analyzing your loan options for your medical practice is a smart way to benefit your business and save you money in the long run. Here are some key loan features to compare.
Interest rates. Interest rates for dental practice loans can vary widely depending on the type of loan and the lender. Be sure to check with multiple lenders to find the best rates.
Loan fees. Some business loans come with origination, service and other fees that add to the loan’s cost. Avoiding unnecessary fees can help you save hundreds or even thousands of dollars over the life of the loan.
Loan amounts. Most lenders state their minimum and maximum loan amounts. Be sure to only look at lenders that offer loans in your desired range.
Loan terms. Some loans have short terms that last only a year or two. Larger loans often last up to 10 years or more. Having a firm grasp of your budget and loan needs can help you decide the loan term that makes the most sense for your dental practice.
Loan processing time. Some loans can be funded faster than others. For example, SBA loans or real estate loans could take weeks or months, whereas invoice factoring or other short-term loans can turn around within days.
Lender reputation. Learning about lenders through online reviews or word of mouth can help you get a sense of how different lenders operate and how they treat their customers.
What is a dental practice loan?
Dental practice loans are similar to other types of business loans, but they’re offered by lenders with experience in the dental industry, so they understand the needs of dental professionals. Loan types include construction and real estate loans, equipment financing, business lines of credit and working capital loans, to name a few.
Dental practice loans are commonly used to rent offices, purchase real estate, buy dental equipment and medical and office supplies, cover cash flow shortages and pay for other practice expenses. Loan types include both short- and long-term solutions.
How do dental practice loans work?
Dental practice loans work just like other business loans, which vary depending on the loan type you choose. Certain loans, such as a term loan or an equipment loan, are disbursed in one lump sum, and you’ll pay it back, with interest, in equal monthly installments for years.
By contrast, a short-term loan, like a business line of credit, can be drawn on whenever you need. You’ll only pay interest on the amount you use, and you may only be required to make interest payments during the draw period. Other dental practice loans may have different loan terms and repayment plans.
You may want to talk to a dental practice loan specialist who can explain exactly how the loan types work and help you decide which option makes the most sense for your practice.
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What is the Finder Score?
The Finder Score crunches 12+ types of business loans across 35+ lenders. It takes into account the product's interest rate, fees and features, as well as the type of loan eg investor, variable, fixed rate - this gives you a simple score out of 10.
To provide a Score, we compare like-for-like loans. So if you're comparing the best business loans for startups loans, you can see how each business loan stacks up against other business loans with the same borrower type, rate type and repayment type.
Retail businesses or others that have a lot of credit card sales
How to qualify for a dental practice loan
Dental practice loan requirements may vary by lender, but here are the basic criteria needed to qualify:
Credit score. Most lenders that offer dental practice loans check your score to determine if you’re a good credit risk. A score of 700 or more can improve your approval odds and get you better rates, but some lenders accept lower scores.
Age of your business. In general, lenders prefer businesses that have been operating for at least six months, but others may require one to two years in business to qualify.
Revenue requirements. Most business lenders have minimum revenue requirements you must meet. In general, your dental practice likely needs to bring in at least $100,000 or more per year to qualify for most loans.
Other financials. Depending on the lender, you may also need to demonstrate profitability and cash flow and disclose your existing debts.
Business plan or loan proposal. Lenders may want to see your proposal for using the loan proceeds and possibly your overall business plan.
How to apply for a dental practice loan
The process to get a dental practice loan varies depending on the lender and the type of loan. But the basic steps to secure this type of financing are similar:
Define your loan purpose. Decide how you plan to use the loan proceeds and how much you’ll need to accomplish that goal.
Assess your budget. Go over your finances to determine how much you can afford to repay each month. This amount can help you determine if a short-term or long-term loan makes more sense for your practice.
Check your credit. Checking your credit score before applying for a dental practice loan is a good way to ensure everything is accurate and up to date. It can also help guide you toward lenders that accept borrowers in your credit range.
Compare lenders and loan types. Compare loan types to see which option makes the most sense for your purpose and which lenders offer those loans. Once you’ve figured out the best loan for your business, be sure to compare rates, fees and loan terms from multiple lenders.
Research requirements. Check the lender requirements to qualify. For example, if you’ve only been in business for a year or two, make sure the lenders you’re looking at consider newer practices.
Gather your documents. Depending on the loan type, the required documentation could be minimal. But other loan types may require more extensive paperwork, so you’ll want to be prepared.
Apply. Once you’re ready, choose a lender and apply for the loan, submitting any required documents.
Depending on the lender and the loan type, the approval process could take some time. And, it’s possible a decision could be delayed if your application isn’t complete or the lender needs additional documentation.
Alternatives to dental practice business loans
You may also want to consider some alternatives to dental practice loans as part of your research.
Business grants. Non-profit dental practices or those that operate in underserved areas may qualify for a business grant, although they can be competitive.
Investors. Because dental practices tend to be profitable, you may be able to attract investors. But you may have to share a percentage of your business or profits.
Personal loans. Many business owners turn to personal loans to help fund their dental practices. Requirements are usually less strict than business practice loans, but you’ll need good credit to qualify for the most competitive rates.
Home equity financing. If you’re a homeowner, you may want to consider leveraging your home’s equity with a home equity loan or home equity line of credit (HELOC) to fund your dental practice. For more, see our guide on warehousing storage financing florida.
Credit cards. For smaller funding needs, you could apply for a card with a 0% introductory rate and qualify for a year or more of no-interest financing.
Medical practice loans. Some lenders specialize in medical practice loans, similar to dental practice loans.
Frequently asked questions
It depends on the goal you're trying to accomplish. For example, if you're just getting your practice off the ground, a startup loan might make sense. But if you need to replace expensive dental equipment, an equipment loan may be a better option.
How long it takes to get funded depends on the lender and the loan type. Online lenders, for example, can often approve and fund your loan within a few days. But if you're applying for a real estate loan or an SBA loan, it could take weeks or even months to go through.
You may be able to deduct your business loan interest payments on your taxes. However, there are certain restrictions and limitations, and not all loans are eligible. It's best to talk to a tax professional who can guide you through the complex world of business tax deductions.
Lacey Stark is a freelance personal finance writer for Finder, specializing
in banking, loans, investing, estate planning, and more. She has 20
years of experience writing and editing for magazines, newspapers, and
online publications. A word nerd from childhood, Lacey officially got her
start reporting on live sporting events and moved on to cover topics
such as construction, technology, and travel before finding her niche in
personal finance. Originally from New England, she received her
bachelor’s degree from the University of Denver and completed a
postgraduate journalism program at Metropolitan State University also
in Denver. She currently lives in Chicagoland with her dog Chunk and
likes to read and play golf.
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