3 Steps to Obtaining a Dental Practice Loan | Dental Practice Brokerage
Dental Practice Sales & Transitions
Obtaining a loan is the most crucial part of purchasing a dental practice. Since this is something that is usually not covered during your dental school education, the process can be overwhelming. You may even be afraid that because of your dental school loans, you may not qualify for a business loan. The good news is that if you have a few years of experience, a good credit score, and the practice that you are looking to purchase has decent cash flow, you will most likely easily qualify for a loan. There are typically 3 main steps to securing a dental practice loan.
#1. Loan Application
Each bank will have a process that is slightly different, but they will all require some type of loan application. The application will require basic personal information, request numbers on the amount you want to borrow, information about the practice, and a simple business plan. Be prepared to gather A LOT of documents, from your dental license information to financial information about the practice. Your dental broker and/or CPA will be able to assist you in gathering many of these documents.
#2. Loan Underwriting
Banks have an underwriting team that will review all of your documents, along with the financial information of the potential practice. During this process, they carefully consider what their risk is in loaning you the money and if it is financially feasible. Every bank has a different level of risk that they are willing to take. Be careful about accepting a loan from one bank when the rest have declined as it may not be in your best interest financially.
#3. Phone Interview
Typically, a member of the bank’s underwriting team will call you to conduct a phone interview. The interview will help them with their risk assessment. They will ask about your background, dental experience, and plans for the practice and its growth. They want to be sure that you have somewhat of an understanding of what you will do as a business owner. You most definitely need to have a business plan in place by this point.
The biggest concern of a bank will be deciding whether the business will be successful enough that you will be able to pay back their loan. Before applying for a loan, it is helpful to have all of your paperwork and your business plan in place; it will expedite the whole process. Our dental broker in 21204 can help you get all of the financial information in order. Give our dental brokerage in Towson, MD a call today for a loan consultation.