November 2019

Loans for Dentists: When a Credit Card Won’t Cut It

by Bernadette Abel6 minutes / November 26, 2019

a list of the types of loans for dentists

If you’re one of the nearly 200,000 dentists in the U.S., building and maintaining a thriving practice is certainly a key goal. You might not know where to find the best fit for financing that meets your needs when you’re exploring loans for dentists. You also might wonder if you’ll qualify for any medical practice loans, especially if you recently graduated from dental school.

Credit cards are certainly one way to close funding gaps. Over time, however, your credit score may fall victim to this strategy and might decrease. Maxed-out cards and high credit utilization rates can do a real number on your credit score. Not to mention that the interest rate on credit card debt can also cut into your practice’s profits.

There are a wide variety of loans for dentists to help your practice meet its goals, no matter the stage of your dental careers.

The type of financing you need depends on what’s best for your practice’s needs. From loans to lines of credit, here are your funding options.

Business loans for dental practices

Funding immediate business needs could be satisfied by a rewards credit card with a generous credit limit. If you max out that card, however, you’ll be removing an immediate funding option meant for emergency expenses.

If your dental practice has an established track record, solid financials, and a business plan that charts out a path to continued revenue success, business loans could be an ideal solution to preserve your available credit card buying power.

Short-term loans for dentists are ideal for bridging cash flow gaps and maybe the occasional building repair or pay raise to retain a key employee. Longer-term loans can help you achieve larger projects like upgrading your practice’s patient management and billing software or even a renovation to your waiting room.

You’ll be looking at flexible terms, loan amounts, and even repayment schedules that can flex with your revenue flow.

SBA dental practice loans

When you need capital for your dental practice, your first thought might not be for an SBA (Small Business Administration) loan. However, SBA loans can offer dental professionals favorable terms, flexible maturity dates, and wide-ranging use of funds to meet a variety of business needs.

SBA loan amounts range from $50,000 to $5.5 million. While terms vary by use of funds, a typical repayment timeline ranges from five to 25 years.

While the SBA guarantees a portion of these loans for dentists (usually around 85 percent), loans are offered through banks and credit unions in your local community and online lending partners like Kapitus.

The qualification process for an SBA loan is rigorous. Business owners need to prepare multiple months’ worth of financial statements as part of the application process. SBA lenders will also typically require collateral to back the loan. It could be equipment or real estate that you currently own. Interest rates will typically be lower than non-collateralized loans.

Dental practice equipment loans

When your goal is to provide the utmost quality in dental care, you’ll have a continuous eye on equipment that can help you deliver.

From patient chairs to cabinetry, and x-ray imaging tools to lights, equipment loans can help you set your office up for success. As your practice grows, loans can help you keep up without feeling a crunch on your cash flow.

There is also the option to finance equipment leases with an upgrade option. This means your practice can keep up with the most current technology to better serve your patients. You won’t have to worry about your financing outlasting the relevance of your equipment.

Working capital and business lines of credit for dental practices

A business line of credit could be a powerful financial tool if you want a stream of capital that can be used for any purpose. Whether you need a working capital infusion for your practice or some cash to help navigate seasonality, a line of credit gives you cash at a moment’s notice.

SBA loans and traditional business loans have more rigorous underwriting processes. But, lines of credit are more flexible in their approval process. A line of credit is also applicable when your dental practice doesn’t have an immediate need for cash. You’ll have it ready when the need arises. You won’t have to endure the approval process when time is of the essence.

An unsecured business line of credit has a higher interest rate than a traditional business loan or line secured by collateral. However, an advantage to a line of credit is only having to borrow exactly as much as you need. This can help you save interest costs long-term. You’re only paying interest on what you’ve drawn on your line.

Helix financing

Like most healthcare businesses, dental practices have specific waters to navigate. As the insurance landscape becomes more nuanced, your cash flow might slow down. Delayed insurance payouts and low premiums can take a bite out of your cash-on-hand.

Helix healthcare financing from Kapitus can help free that cash back up.

Helix financing is designed with the needs of your dental practice in mind. They have an expedited underwriting process. The process infuses anywhere from $20,000 to $500,000 into your business in as little as three days. You’ll be hard-pressed to be caught short for capital again.

Terms for repayment are also flexible and intended to keep you out of a cash crunch as time goes on. Terms range from six months to ten years. Helix can help you shake free of the financial confines related to insurance payout timelines.

Next steps

Review the wide variety of financial tools and loans for dentists available. And, think about what your upcoming financial needs might be.

It might help to organize your business goals by short-term and long-term. Then sort those projected capital needs by dollar amount. This process can help you determine which financial solution will help your practice at the most reasonable cost over the term you need the funds.

Keep in mind that collateral-backed loans will likely offer the most favorable interest rates. They typically have longer approval windows. You’ll need to do some planning if they’re part of your business financing plans. Lines of credit can have shorter approval windows and offer funds at the ready when you need them.

If you’re curious about the above loans for dentists that might be the best fit for your business, reach out to the team at Kapitus. They’ll help you find the best solution for your growing practice while leaving your credit cards out of the mix and in your wallet.

Bernadette Abel

Decrease Medical Practice Overhead In These 7 Areas

Industry Challenges

by Stephanie Vozza5 minutes / November 22, 2019

discussing different ways to decrease medical practice overhead

KEY TAKEAWAYS

You may be able to reduce medical practice expenses by ensuring you don’t overpay on malpractice insurance through regular policy reviews and getting new quotes each year, efficiently managing supplies, and streamlining operational expenses, including office leases and utility bills.
Enhance cost-efficiency by avoiding overordering, negotiating favorable terms with vendors, and exploring bulk purchasing for frequently used items. Seek out sales and volume discounts to achieve savings.
Cut costs and improve efficiency by adopting digital tools to minimize paper usage, streamline billing processes, and Implement energy-saving measures.

As an independent practitioner, you focus on providing high quality healthcare to your patients. But, you’re also a business owner with a wide range of expenses. All business owners want to reduce costs, but as a medical professional you want to be sure that your service doesn’t suffer in the process. The average medical practice has overhead between 60% and 70% of its revenue. This includes everything from staff salary and benefits to medical supplies, insurance premiums, rent, technology and more. To decrease medical practice overhead, focus on items that won’t negatively impact your patient or employee experience. Here are seven areas to consider when you want to decrease medical practice overhead.

1. Insurance

One of your largest annual expenditures is likely your malpractice insurance. Depending on your practice type and state, premiums start at about $4,000 a year and can go up to the tens of thousands. The typical practitioner pays about $10,000. To avoid overpaying, make a habit of reviewing your policy and getting new quotes each year. Make sure you’re also taking advantage of available discounts. You may qualify for a lower rate by being a member of an association or for taking a course on reducing your malpractice risk that some insurers offer.

2. Office Lease

Another way to cut costs is to review your office lease and compare it to available properties. If you’re not using your entire space, consider a smaller space or refinancing an office to another provider. Or, use the information you’ve gathered on market rates to negotiate with your landlord. While moving your practice could be inconvenient, it might save you money in the long run.

3. Supplies

Take inventory of your supplies on a regular basis as to not order too much. If you have a contract with a supply vendor, review the terms and renegotiate where possible. And, check prices with competitors with a quick internet search. You may be able to save money by ordering supplies in bulk. If this is the case, make sure you’re only doing this for the things you use most frequently. Also, take advantage of sales. Contact your rep to ask about deals they’re offering this month. Check if you can combine vendors and qualify for a volume discount. You may be surprised at the number of overlapping products your vendors offer, allowing you to streamline your ordering and decrease medical practice overhead.

4. Outside Services

Review the outside services you use each year, like your patient linens supplier or document shredding. You may find providers that are less expensive or that offer multiple services so you can combine and save. Or you may be able to team up with other healthcare providers in your building and request a discount if you agree to use the same service on the same delivery schedule.

5. Paper Usage

Find ways to cut back on your paper usage. In place of paper, a growing online program is HIPAA-compliant digital tools. For example, you could send new patients links to forms that they can download and fill out at home before coming to your office. You can also look into services that allow your patients to complete and securely submit forms online. An added benefit of using online forms is that it speeds up your check-in process. This can improve patient waiting times.

6. Billing

Sending paper bills can be costly. You run the risk that patient payments are delinquent or overlooked and must go into collections. Instead, start asking all patients to keep a credit or debit card on file. This step eliminates the patients’ need to mail in payment and helps you keep costs down by reducing your own billing charges. If a patient doesn’t want to provide a card, require prepayment.

7. Utilities

Finally, watch your utility bills and take steps to reduce them. For example, you can turn off all devices at the end of the day. Take it a step further by unplugging electronics or using power strips that can be turned off at the end of the day. Computers, scanners, copiers, medical devices and other electronic equipment use electricity even when they’re sitting idle or turned off. Also consider the kind of equipment you’re using. Switching from desktop to laptop computers can save 80-90% in electric usage. Whether you lease or purchase equipment, be sure to choose ENERGY STAR devices that automatically power down when inactive. This can help you save as much as 50% on your energy bill.

The Bottom Line

Reducing your costs can free up money to use in other ways. You can possibly provide your staff with higher salaries or more benefits, or invest in new equipment to expand the services you offer. Be sure to share your goals and ideas to decrease medical practice overhead with your staff. Your team probably knows what can be eliminated. Asking for employee input gives your staff ownership over the outcome and increases the chance of implementing these suggestions. And remember, minimizing costs requires everyone’s cooperation.

Stephanie Vozza

Stephanie Vozza is an experienced writer who specializes in small business, finance, HR, retail and real estate. She has been a regular columnist for FastCompany.com for five years, earning some of the site's highest page views. Her byline has also appeared in Inc., Entrepreneur and Parade, and she has written for companies that include LinkedIn, Staples, Hewlett Packard Enterprises, Capital Impact and Century 21. She was recently named one of the top business writers by HubSpot. Stephanie is also the founder of The Organized Parent, a website that offers product and tips to streamline family life; she sold the company to FranklinCovey in 2011.

Where Businesses Can Find Small Loans

Manage Your Money

by Liz Froment5 minutes / November 7, 2019

choosing small loans for your small business

There may be several financial institutions in your area that offer business bank accounts, but you cannot determine the “best choice” based on the bank’s age, size, or advertising claims. Ultimately, finding the best business bank account for your business starts with identifying specifically what you want to achieve with your banking relationship — now and in the future.

The questions below may help determine which bank can best support both the financial needs of your business, along with your longer term business goals.

Does the bank specialize in businesses like yours?

Not all business bank accounts are the right fit for every type of business. Your business may share commonalities with others in size, region, years in business, and annual revenue, but the challenges and opportunities that come with your business are unique. As you consider different banks, explore what types of businesses they serve. Do they offer solutions geared toward your industry? How familiar are they with your local market? Are they well-versed in SBA loans? The business relationship you have with your bank can influence your ability to reach profitability, maintain adequate cash flow and expand to establish a unique point of differentiation from competitors.

If your business is small with little-to-no plans to grow, in start-up mode, or is seasonal in nature, you may not know the average monthly balance you’ll be able to maintain, or the payment tools you’ll need to purchase goods from vendors, and accept payments from customers. Narrow your search to banks that offer business checking accounts with a low (or no) monthly minimum balances and fees, debit cards, online banking, fee-free wire transfers and unlimited incoming deposits.
If your business is well-established, in growth mode or operates internationally, consider banks that have an extensive footprint (around the country or world), offer cash management solutions like lockbox, remote deposit capture and fraud prevention for checks and payments, and/or specialize in high-value or cross-border transactions.

Does the bank offer tools beyond traditional accounts?

Javelin Strategy & Research reports that digital solutions and payments services for small businesses have “…lagged significantly behind consumer and commercial banking.” As a result, many small business owners may be hindered by a lack of access to the technology they need to effectively run their business. A bank that offers additional business tools may provide you turnkey solutions to run your business — including the ability to process card payments, offer gift cards, or manage loyalty programs and inventory. Know that having digital and mobile access to your business bank account is a top priority? Narrow your search for a bank only to those brands who are equipped to deliver all of your needs virtually. If you’ll rely on your bank for more than traditional financial services, limit your search to those that offer value-added tools.

Does the bank offer the ability to build credit?

Building a formal business credit history can document your businesses financial responsibility, and could work to your advantage if you intend to bring in business investors, partners, or want to sell your business. Not all banks offer credit cards or similar products for business clients; those that do may be more willing to issue credit to a business customer who has an established relationship with it.

Does the bank assign a relationship manager?

The best business bank accounts establish relationships, much like a consultative relationship between the client and a bank representative. If a personal touch is important to you, look for a business bank account that provides a relationship manager who is vested in understanding your business, and how the bank can help support it. If you’d prefer to handle most of your businesses’ financials online, however, a relationship-based model may not be necessary.

If you do opt for a bank that assigns a relationship manager to your account, consider the level of authority and expertise the person who will support your business holds, and whether the business bank relationship will suit your need for a minimum of 18 months. Meet with relationship managers at a few banks to gain a sense of how they interact with business clients, and to gauge whether their approach aligns with your expectations.

Is the bank preparing for the future?

Technology is changing business payments at a rapid pace, and banking is increasingly moving to a digital environment, allowing for faster processing times. Not all banks are equally invested in keeping up with the technology changes, particularly when it comes to meeting the demands of small business clients. While many banks now offer digital conveniences like person to person payments for consumers, not all have the capability to offer a similar services to business customers. Smaller banks or credit unions may be more flexible with fees, compared to larger banks, but not all have the resources to support the latest banking technology.

Research the business banking solutions that a variety of banks offer; compare what is available in the broader market, and from each specific bank. The bank you choose should offer the benefits most important to you, support the financial needs of your business, and be investing in technology and infrastructure enabling them to be your business banking provider for the long haul.

Liz Froment

Liz Froment has been freelance writing for five years. She covers topics such as retirement strategies, financial technology, finance, marketing technology, small business, insurance technology, insurance, commercial insurance, and real estate. Liz has written for clients including UBS, CB Insights, AT Kearney, Cake Insurance, Novidea, LoopNet Coldwell Banker, Zembula, and HotelCoupons, among others. Her ghostwritten work has been seen on Social Media Today, Entrepreneur, Search Engine Journal, and Proformative. Before freelancing, she worked in corporate finance focusing on mutual funds and hedge funds for companies such as State Street Corporation, KPMG, and International Investment Group. From there, she worked at Brown University in grants administration. Liz lives in Boston and has a Bachelors of Business Administration with a concentration in management from the University of Massachusetts at Amherst.

Loans for Dentists: When a Credit Card Won’t Cut It

Loans for Dentists: When a Credit Card Won’t Cut It

Business loans for dental practices

SBA dental practice loans

Dental practice equipment loans

Working capital and business lines of credit for dental practices

Helix financing