Loan Payments

There are not many companies that actively compete to lend money specifically to dentists. The paperwork hassles involved when trying to get a loan from an institution that has not worked with dentists and dental offices pushes us to dental lenders that charge higher fees.

On average, these loans can cost up to 3-6% more than loans for other purposes. Also, business loans generally always costs more than personal loans such as auto loans or home improvement loans.

The main reason that we go with business loans is the security. We basically do not want to jeopardize our personal credit for our business. The question you really need to ask yourself is this worth it?

Dentistry is among the safest start up businesses. The chance of failure and bankruptcy for a dental office is very low, especially after the few first years. Now, if you are an established office or a new practitioner who has confidence in your success, using other sources for your money can be valuable.

On average, assuming you have a $200,000 loan on your office, a 4% saving on your rates can save you $8,000 a year! Besides, most personal loans (like home equity loans) have no pre-payment penalty, whereas loans from dental lenders usually lock you into the loan for a few years.

If you are incorporated, you can talk to your attorney and accountant about putting together a loan from personal sources in such a way that you get more protection for your money in case your business fails (not that we expect that after buying this program!). The correct setup is also important in case of death or disability.

Although financial issues can sometimes be confusing, paying 10% interest on a loan you are locked into when the average home equity loan costs you as low as 5% is not that smart!