However, you might have a few questions about financing a dental practice startup. Keep reading to learn more about tips and options to support you when starting up new dental practice. These tips will ensure you’re set up for success.

PREPARING FOR SUCcESS

Although you might be eager to jump straight into starting your own practice right after graduating from dental school, it often makes more sense to join an existing practice as an associate. This will let you work your way up while gaining a feel for the industry and accruing valuable experience. It will also let you get your finances in order. You can begin saving that much needed cash flow when getting ready to startup a dental practice. This could also include building up your credit score and making inroads on some dental school debt.

BUDGETing and project planning

Starting a dental practice can cost over $500,000 to $600,000 or more depending on the area, according to Bank of America; these costs include building out an office, setting up the necessary dentistry workspace with the proper equipment, and providing enough working capital to get your business jump started and running well. The startup route can sometimes be scary getting started and overspending is easy to do. If you lack a clear and organized business plan and oversight on the budget you will regret it later on.

FOCUS ON THE FINANCIALS

You will likely need a dental specific loan to startup a dental practice, and your options for this typically include traditional banks or even online lenders these days. Many brick and mortar banks offer loans, specifically for dentists—and some even offer discounts for dental associations!

Online lenders are often easy to qualify for, and the speed of their application and approval process (which can sometimes even be a few hours) is a big draw for many. Talk to a buyer’s representative who has worked with a variety of lending institutions. They can give you a some really key insights into what makes a great partner in the lending space.

Regardless of the lender you choose for the loan, though, you will need your finances in order! If you don’t have enough cash-flow to support your debt obligations and life-style, having a subpar credit score with late payments will hinder the loan underwriting process. You must also consider the practice you’re interested in buying! Is the practice’s revenue going to support the loan payments? A practice’s production and revenue must be matched once you take ownership, if the underwriters do not see light at the end of tunnel for you they may not approve the loan.

AddressING Student Debt

Naturally, your student debt may be your biggest monthly bill. If your personal loans are creating a cash flow problem, you might consider enrolling in income-driven repayment, which ties your federal loan payments to a percentage of your discretionary income, usually around 10%.

You might also consider refinancing student loans for a lower payment; refinancing dental school loans at a lower interest rate can reduce your monthly loan payments and increase your cash flow. This might be a great strategy to boost your financial health score. Ultimately, the right option will depend heavily on your individual financial situation, including things like credit card debt, car loans, mortgages, and more.

About Next Level Consultants

Michael Dinsio, Paula Quinn, and their incredible team at Next Level Consultants have comprehensive knowledge of the dental industry and are committed to helping you navigate the process of owning and operating your own practice. Over the years they’ve helped hundreds of dentists start, buy, and grow their own practices and are looking forward to helping you next. If you have any questions about financing your dental practice, don’t hesitate to contact Next Level Consultants today.