According to the American Dental Association, 72.5% of dentists in private practice are owners. Becoming a practice owner means taking on a significant financial investment and a change in responsibilities.

If you plan to become a dental practice owner, you probably have many questions, including many about financing a dental practice. We’re answering some of the questions we hear most often.

Will my student loans prevent me from buying or starting my own dental practice?

Many dentists worry that their student loan balances will prevent them from becoming practice owners. In reality, your student loan debt won’t cause you to be denied by practice lenders, but your management of your student loans could impact your lending eligibility.

Credit score and debt-to-income ratio are two financial metrics that lenders evaluate when considering an individual’s loan eligibility. High monthly student loan payments and missed payments could impact your credit score and debt-to-income ratios, making you a less favorable loan candidate.

Managing your student loans well will set you up for success when it’s time to finance your practice. Learn more about how student loans can impact practice ownership.

How will my financial needs and goals affect my practice and loan?

Before you dive into ownership, you should carefully assess your financial needs and goals. Identifying these areas will help guide you as you search for the right practice and lender.

Consider:

• When do you plan to retire? Your target retirement date can impact your financial planning.
• How much money does your practice need to make to maintain or grow your current lifestyle? The more personal expenses you have, the more profitable a practice you may need to support your lifestyle.
• Do you want to pay off your practice loan quickly? Your repayment strategy could inform your loan term.
• If given the opportunity, would you like to expand your practice or open a second location? Or are you content with a single practice? If you are considering expansion or additional locations, you will want to ensure your lender can support those needs.

These are a few questions that will inform your practice and loan needs.

When should I find a lender for my dental practice?

The journey to practice ownership can be lengthy, so it can be challenging to know when it’s the right time to engage a lender. Ideally, you should find and secure a lender before you begin actively searching for the right practice.

You don’t want to find your dream practice then lose it because you weren’t equipped with the financial support you needed. Building a relationship with a dental practice financing specialist can help make the process simpler once you are ready to purchase.

How do I choose the right lender for my dental practice?

There are a variety of aspects you should consider before choosing your lender. Read more about choosing the right lender »

In summary, the linked article encourages aspiring practice owners to think carefully before settling on a lender. It’s easy to quickly pick the lender who offers the lowest rate without considering other aspects of the loan details or the many ways a lender may need to support you in the future.

When reviewing a potential lender, be sure to consider:

• Term
• Interest rate
• Structure and servicing
• Prepayment penalties
• Merchant services
• Future support (options for real estate, expansion, etc.)

Learn more tips for choosing the best lender for your needs.

How does Panacea Financial help dental practice owners?

Financing a dental practice is a little easier with the help of Panacea Financial. Whether acquiring, starting, buying into, expanding, or other, Panacea Practice Solutions team is ready to help you create your dream practice.

With a streamlined digital application, fast credit decisions and competitive pricing, Panacea’s loans are built for you to succeed as you move into the next phase of your career.

Ready to transition into practice ownership or partnership? Get connected to a dental practice finance specialist today.