Dental Practice Financing Solutions
Conventional and SBA lenders offers excellent dental practice loan options for dental offices as well as financing options for orthodontists, oral surgeons, periodontists, prosthodontists and endodontists.
SBA and conventional bank loans can be used for all of the following:
- practice financing
- purchase of a new building or facility
- construction of a new building or facility
- renovation or expansion of an office or surgery center
- equipment financing
- refinance of a practice
- refinance of a building/facility
- debt consolidation
- partner buyouts and partner buy-ins
Keep in mind that SBA loans are almost always “bank loans.” The SBA does not make these loans directly, they simply guarantee or insure a part of the loan for the lender and most SBA lenders are banks.
The SBA programs exist to de-risk a loan for a bank to enable them to make more loans to more borrowers.
100% Practice & Real Estate Financing
Perhaps the best benefit of conventional bank and SBA dental practice loans is the flexibility that lenders employ to allow borrowers to finance anything the practice needs.
Both SBA and conventional lenders allow 100% financing and “over 100% financing” to expand a practice, open a new location or acquire (or build) property.
Long term fixed rate as well as adjustable rate financing is available. Everything from quarterly adjustable rates to 3 to 5 year fixed rates to 15, 20 and 25 year fixed rate financing is available depending the circumstances of the transaction and the underwriting guidelines of the lender.
Succesful existing practices have the most options available to them including entirely projections-based loans for expansion, acquisition or ground up construction.
“100% plus” financing is routinely available via the SBA 7a loan program with the right lenders.
Solid practices can finance real estate, equipment, existing debt and working capital over 25 years all in one loan at over 100% loan to value of any real estate being financed.
Additionally, these same loans can be used for NON-real estate financing. i.e. as a purely as cash flow loan with a 10 year term.
Dental Practice Lenders – Conventional Loans vs SBA Loans
Generally speaking, the best banks for dental practice loans are banks that offer conventional (non-SBA loans) as these loans offer better terms than SBA loans, but SBA loans can be the right fit depending on your situation.
SBA Loans are a better fit if:
- You need longer terms like 25 years or even longer as many lenders will extend out the term of the loan to include construction.
- Your practice is not strong enough (yet) financially to qualify for what you need.
- The personal credit of the dentist/guarantor(s) is not good enough to qualify for a conventional bank loan. For instance, most SBA lenders are forgiving with regard to past credit issues or even past bankruptcies.
Conventional Bank Loans are a better fit if:
- You have a rock solid practice and a straightforward request.
SBA Loans for Construction, Remodeling, Refinance/Expansion
Both the SBA 7a and the 504 program provide solid dental practice loans that can be used to build a new facility or to refinance and remodel an existing dental office. Either program can be an excellent solution for a practice expansion especially, if you would like to upgrade and finance your equipment in the process.
SBA Loan Benefits for Dental Practices:
- Long term commercial financing at low rates.
- Commercial financing that is typically available regardless of overall economic conditions.
- Financing of dental practice equipment, inventory, working capital, etc.
- 90% to 100% “plus” loan to value or loan to cost financing that is fully amortized with no balloons, calls, re-qualifying or refinancing necessary later.
- Total financing of up to $10 million available via the 7a program for truly solid practices financing 1 or multiple locations.
Recent Fundings
We recently helped a client refinance her practice debt. She had been in business for 1.5 years and had a dental practice loan from a large bank that had graduated payments. We were able to secure a 10 year fixed rate using an SBA 7a loan.
We recently helped a dentist refinance his building. He had a higher rate, shorter term loan of $1.9 million and we were able to secure a 5 year fixed with a 25 year amortization. The dentist had been practicing for just a few years, but his revenues were trending nicely and he wanted to build out space on the first floor of the building to be leased by complimentary practices including an orthodontist and an endodontist.
Comprehensive informaiton regarding SBA 7a loans: SBA 7a Loan Requirements: Down Payment, Eligibility, Credit Score
SBA 504 Loan info: 504 Loans
Please contact us at 1-800-414-5285 regarding any questions you may.