Lending a hand
Featured Products Promotional FeaturesPosted by: Dental Design 3rd November 2024
Modern technology has become something patients look out for as they seek the best possible dental care available to them.[i] Choosing new equipment and technological solutions within your practice is also an opportunity to develop your treatment offerings, and broaden your potential to receive referrals, creating new revenue streams for further reinvestment.
However, acquiring the capital to make an initial investment into a new treatment centre, CBCT scanner, or CAD/CAM system can appear difficult at first. These solutions are often expensive, and may feel out of reach. This is why dental professionals consider financing their investments, spreading the costs across a set period of time, or they may choose to acquire a practice loan, and pay that back over the following months or years.
Understanding where to look for these solutions, and what to look out for is key. Making financially informed decisions, perhaps with the help of a specialist financial advisor, before choosing your next step is essential.
Payment planning
Whilst lending to small- and medium-sized businesses has decreased year on year since the Coronavirus pandemic – April 2021 observed the last growth in lending, when comparing to the year prior[ii] – it is still possible to acquire a loan at favourable rates. With a loan, dentists could manage the money themselves or finance a purchase and then make regular payments in the long-term.
In either case, a lender will want to see that a dentist is reliably prepared to pay back the sum. They may offer an unsecured or secured loan, dependent on the amount of money offered.
A secured loan will often provide more competitive rates and terms than an unsecured loan, however, it would require a dental professional to provide collateral. This is an item, for example, dental equipment or even a dental practice, or a cash sum which can be seized by the lender if the borrower does not return on the loan.
An unsecured loan omits this, but lenders may look even closer at factors such as credit ratings, financial histories, and the performance of a dentist’s practice. They may be required to report – and explain – their assets and liabilities, as well as their incomings and outgoings. Depending on whether a lender then deems them a reliable borrower, a dentist may be able to finance an upgrade, or receive a loan without putting up collateral.
Understand your rates
Dental professionals must also consider the impact of the interest applied to their loan. Some lenders may look at the role of a healthcare professional, ever in need by the public, and provide more favourable rates for borrowing. However, individuals will likely always end up paying back a higher value than that which you initially loaned or used to finance a solution.
An APR will factor in the interest rate, financial charges, and the length of the repayment term. The rate may mean dentists pay hundreds or thousands more on a loan than the sum they initially borrow – dental professionals must recognise and factor this into their financial plan before setting terms in stone.
Loans offered by lenders may have fixed or variable APRs. Choosing a loan with a fixed APR may allow for more structured financial planning, without any surprises, but a variable APR could be beneficial if interest rates drop during the period of the loan repayments.
Look to the future
It’s important to understand how you will be able to make the initial repayments after borrowing, as well as if they can be sustainable 12 months, 3 years, or 5 years down the line. It may be that your investment into new technology is projected to open up the opportunity for increased profits, which will help to repay your balance.
Working with a specialist financial adviser, like those that are a part of the money4dentists team, is key. With decades of experience, money4dentists’ independent financial advisers can guide dental professionals through the financing and practice loan solutions before them, helping to breakdown an agreement and find the optimal solution for you. money4dentists works exclusively with dentists, understanding the unique financial situations of these professionals unlike anyone else.
Making upgrades to your practice can be fruitful in the long-run. Choosing the best payment solutions for you – whether you take out a practice loan or finance a purchase over time – is key. With the right choice of loan, you can reap the rewards for years to come.
For more information, please call 0845 345 5060 or 0754DENTIST.
Email info@money4dentists.com or visit www.money4dentists.com
Author:
Richard T Lishman – Managing Director of the 4dentists Group of companies
[i] Lamprecht, R., Struppek, J., Heydecke, G., & Reissmann, D. R. (2020). Patients’ criteria for choosing a dentist: comparison between a university‐based setting and private dental practices. Journal of oral rehabilitation, 47(8), 1023-1030.
[ii] Bank of England, (2023). Businesses’ finance raised. (Online) Available at: https://www.bankofengland.co.uk/statistics/visual-summaries/businesses-finance-raised [Accessed August 2024]
