Business Loans for Dentists
Quick Funding for a Dental Practice
Running your own dental practice is fulfilling work. But it can also be a big financial challenge. With high-priced equipment, lots of overhead, multiple employees, and payment deal with insurance companies, dental work can have thin profit margins.
Growing your business means you can increase those margins, but you need a significant amount of cash to expand your business. And while you might have some on hand, chances are good that you’ll need funding.
We offer a variety of small business loans for dentists that help you cover the costs of growing your business. Whether you need a large amount of cash or just a bit of working capital, Shield Funding can help.
What Do I Need to Qualify?
Below is a list of the requirements to get approved for business funding with our most basic program. There may be additional factors that are considered, meeting these three requirements though gives you a very high chance of having your application approved.
How Do I Apply?
Applying has never been easier. You can either call our toll free number 24 hours 7 days a week at
Submit your online application by clicking apply below and entering a few basic details about your business.
Types of Business Loans Available
1. Small Business Loans
Term loans are the funding vehicles you’re most familiar with: you get a chunk of cash, then pay it back with interest over a certain period of time. The biggest advantage of these types of loans is that you can get very large sums.
Shield Funding, for example, offers up to $1,000,000 for qualified dental practice loans. That’s enough money to open an entire new location with several treatment rooms and the latest equipment.
Of course, you can also get a smaller loan to help with buying a new dental chair, renovating or expanding your building, upgrading your X-ray machine, paying rent, or anything else related to your business.
With terms from 2–36 months, you have the repayment flexibility you need to make these loans work for you. And interest rates from 5–45% won’t break the bank.
As long as you’ve been in business for two months and make at least $8,000 in monthly revenue, you can qualify for a small business loan from Shield Funding.
2. Merchant Cash Advance
Because we’re an independent alternative lender, we can offer better service to business owners with bad credit than traditional lenders. If you don’t have great credit, you’ll be hard pressed to find a bank that will approve you for a loan.
But our merchant cash advance loans only require a credit rating of 500. You’ll have less flexibility in terms (2–18 months, or sometimes a bit longer, and 12–45% interest), but you can still get up to $1,000,000 for growing your dental practice.
Again, you’ll need to have two months of business under your belt and bring in at least $8,000 in monthly revenue with some of that coming from processing credit card payments.
The exact terms of your merchant loan will vary based on your credit and your business financials.
3. Equipment Financing
You want to offer the absolute best service to your clients. For that, you’ll need the best equipment. And, as we saw, dental equipment can be very expensive. A pair of top-of-the-line dental chairs can easily run you $15,000 or more.
But going that extra step to provide a better experience for your clients is what keeps you in business.
Equipment financing helps you make those purchases. These are loans specifically earmarked for new equipment. Because they’re less flexible, you can often get better rates—sometimes below 10%.
But there’s a trade-off: you’ll have to make a down payment. And that can be up to 20% of the cost of the equipment. If you’re opening a new location, that down payment might be $15,000 or $20,000. If you have the cash on hand to make that purchase, equipment financing is a great choice.
If you don’t have that much liquid cash, though, you might be better off taking a standard term loan. Whatever you do, don’t skimp on equipment to save money. Clients know when they’re getting the best dental work, and they’ll seek out better-equipped practices if they have to.
4. Business Line of Credit
Operating costs for dental practices can be very high—the average annual overhead cost is around $350,000. And you’ll need to be prepared to make those payments.
There are also plenty of other day-to-day expenses. If your X-ray machine stops working, you need to get it fixed immediately. Or maybe you run out of composite for fillings faster than expected, and you need to get a new supply fast.
You might find a great advertising opportunity that you need to take advantage of right away, or be approached by a new insurance company with a deal that requires some cash on hand.
Whatever the reason, you need money and you need it fast. That’s what a business line of credit is for. You can think of it like a credit card—you have a maximum limit and you can use any amount up to that number for a purchase. Then you make monthly payments that cover the interest and the balance.
With Shield Funding’s lines of credit, you can have up to $250,000 at your disposal for those last-minute purchases, cover payroll expenses, or other costs that come up. And with interest rates of 5–10%, you’ll get a much better deal than you would with a standard credit card.
You’ll need six months in business, a credit rating of 650 or higher, and at least $10,000 in monthly revenues to qualify.
5. Merchant Cash Advance
Don’t want to deal with the hassle of making numerous monthly payments on your line of credit, but still want to have cash available when you need it?
A merchant cash advance is similar to a line of credit, but the repayment terms differ in a crucial way. Instead of making monthly payments, you agree to have the lender take a small percentage of your credit card sales until the loan is paid off.
If you’re doing enough business, this arrangement is very convenient. You pay the advance back on a schedule that works for you and you don’t have to deal with the administrative hassle of managing a loan.
And you can get a cash advance with a credit rating of only 500. As long as you’ve been in business for two months and have at least $8,000 in monthly revenue, we’ll work with you to find terms that work.
Financing Tips for Growing your Dental Practice
Dental Equipment Is Expensive
If you’re opening a new location or expanding an existing office, you need new equipment. And dental equipment is astoundingly expensive. A high-end dental chair can cost between $7,000 and $9,000. An X-ray machine might be in the $4,000–$5,000 range. A vacuum pump (of which you may need more than one) could run you $8,000.
You can share some of those things between treatment rooms, but if you have more than two rooms, you might need to invest in multiple pieces of equipment. And there’s a lot more, too. X-ray processing equipment, air compressors, delivery units, hand tools, drills . . . the list goes on.
Even opening a single new treatment room could come with a bill of $15,000. And that’s just for the tools you need. If you have to renovate or build an addition, there will be more costs.
If you’re considering expanding into a specialty, like orthodontics or endodontics, the price tag will be much higher. Each dental specialty has its own equipment and requirements.
There are many costs associated with growing your dental business. But equipment is the one you’ll need to be the most ready for.
A Wide Range of Operating Costs
Many people assume that dentists mark up their prices and make a ton of money. But the average dental practice might only have a profit margin of 25% (though a well-run office could raise that to 40%).
Part of the reason for these low margins is that dental offices have significant operating costs.
The average dental office spent over $54,000 on supplies in 2014. Lab work came in at over $8,000. The equipment we just mentioned needed over $5,000 in repairs. When something breaks, it needs to be fixed immediately, or your schedule is going to get thrown off. And that’s bad for business.
That doesn’t begin to cover things like advertising; filling your waiting room with magazines, snacks, or kids’ toys; utilities; or office supplies. Many dentists now offer TVs and Rokus with Netflix and headphones to comfort patients receiving fillings. All of that adds up.
That 2014 study found that dental offices paid almost $700,000 in annual operating costs (including salaries). That varies based on the size of the office, but it’s safe to say that you’ll need to have a lot of cash on hand to run the business.
Insurance Payments Can Be Unpredictable
77% of people have dental insurance. Which means you’ll be dealing with insurance companies regularly. While your front office staff will handle most claims and calls, it’s important to understand how taking insurance payments can affect your business.
For example, you may need to negotiate reduced fees if you want to be on an insurance company’s network list. Which means, before you even get started, you’ll be earning less than you might have.
Some insurance companies don’t cover composite fillings on back teeth—they’ll only pay up to the cost of an amalgam filling. So you’ll need to charge your patients for the remainder of the cost. And if you want to stay competitive on price, you may have to take a hit on that procedure.
And, of course, there are payments from the insurance company. Most companies are required by law to pay within a reasonable amount of time, but that could be a month or more. Once you’ve been up and running for a while, you can deal with this unpredictable cash flow.
But if you’re expanding or opening a new location, it can be an inconvenience.
Managing Payroll and Taxes
Most dentists make over $125,000, which means they pay a significant amount of taxes. If you own your practice, you’ll pay self-employment taxes, too. And then there’s the payroll tax on other staff.
You’ll have front office staff, hygienists, and dental assistants. Hygienists alone make $74,000 on average. That means you’ll be paying a lot in payroll. That’s a big expense by itself, but you’ll also have to cover taxes.
Dentists have a few other tax issues to deal with. For example, if you’re selling products at your office, you may have to pay sales tax on them (depending on your local regulations). And you may need to pay use tax on supplies that you order in.
Those taxes are an administrative hassle and can be a drain on your annual earnings. And when you’re expanding your business, you need to be ready to pay for them.
All of those expenses make running a dental practice an expensive business choice. Growing your business helps you take advantage of economies of scale, so you’ll make more, even though your costs go up.
Grow Your Dental Practice With Loans That Work for You
Growing your dental business can turn fulfilling work into a lucrative career. But you’ll need to make an investment in your equipment and staff to make that happen.
Get in touch by using the form to the right to learn more about how Shield Funding can help you grow your business with a loan that works for you!