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Getting That Loan

You are a recent dental school graduate and you have come across a great opportunity to own your own practice, but how do you get the bank to lend you the money without ownership experience and, most likely, a significant amount of student loan debt. While the dream of owning your own office right out of school may be difficult, it is possible.

There are things that you can do while you are still in school to help with this process. The bank will look at your credit score so make sure it is as high as it can be. Keep your credit card balances manageable and keep discretionary spending to a minimum. Don’t assume that you can spend excessively and just roll everything into your student loan debt. If you can’t manage your household you’re not likely to be able to manage your business.

Once you have identified a practice to purchase you need to establish a relationship with a dental specific CPA as soon as possible. You will need someone that can scrub the financials from either the practice owner, or the practice broker. The bank will want to see at least three years of sound practice numbers.

The bank will also look at the practice itself. Is it the right size? It needs to be big enough to support your loan repayment and your living expenses. But, it can’t be too big either. The bigger the practice, the bigger the price and loan repayment. You must be realistic in your production goals. The office equipment can be a factor as well. Look for a practice with equipment that will last a few years at least so an equipment loan won’t be necessary right away. The office staff will also play a large role, low staff turnover is a plus.

Another necessary part of the process will be to show the bank your plan for the office moving forward. How are you going to maintain that stable practice and how are you going to grow the practice moving forward. Are there procedures that you can add that the owner was sending out? Are there better ways to market the practice? Are there expenses that can be trimmed? These are some of the questions that you must consider when making a purchase decision and having the right answers will go a long way towards getting that bank loan to make the dream a reality.

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