June 06, 2022
6 Ways to Use a Dental Practice Loan for Business Growth
Sadly, affording upgrades is costly and often requires additional financing. That’s why many dental practice owners apply for small business loans to help them increase their cash flow.
In this post, we’ll review popular dental practice financing options. Then, we’ll explore six ways that you can utilize a business loan to advance your dental practice.
6 Business Financing Options for Dentists:
When you applied for dental schools, you probably weighed all of your options. You should adopt the same research process when evaluating the funding options for your dental practice. All business owners are different, so it’s important to research numerous financing options. By doing this, you can apply for one that best fits your practice’s needs.1. Traditional Bank Loans
Most banks offer business loans, but they can be challenging to obtain. If you have a low credit score or own a new business, it’s unlikely that you’ll be approved. If you’re interested in this type of financing, we suggest contacting the bank first to learn about the prerequisites. That way, you can pursue other business financing options if it’s evident you won’t qualify.2. Loans from Alternative Lenders
If you’re interested in pursuing a business loan for your existing practice, you should research alternative lenders. Many online lenders offer long- or short-term financing, depending on the applicant’s needs.3. Small Business Administration (SBA) Loans
If you’ve pursued other loan options but haven’t gotten approved, you may qualify for an SBA loan. The SBA provides financing to business owners that haven’t been able to get funding elsewhere. Typically, these loans come with low-interest rates and affordable monthly payments.4. Credit Cards
Some dental practice owners use business credit cards to afford business costs. Of course, it’s crucial that you pay off your balance on time and ensure that you aren’t overusing your card.5. Equipment Financing
If you need new dental technologies, accessing an equipment loan can be very beneficial. However, it’s important to remember that you’ll only be able to use the loan funds to pay for equipment costs.6. Line of Credit
In some cases, dental office owners benefit from lines of credit to fund their operations. When you take out a line of credit, you can borrow against your approved loan amount as needed.
How Your Dental Practice Can Utilize a Loan:
1. Hire Additional Employees
Your patients’ time is important to them. Many patients take time off from work to attend appointments, and they should be seen on time. If your customer base has increased, your staff may struggle to serve patients quickly and efficiently. Due to this, you should consider hiring additional personnel. A business loan could be the solution to your staffing shortage! Once you receive a loan, you can hire more dental assistants or receptionists, depending on your practice’s needs. Just think about how much more effective your dental practice could be with a few more employees!2. Utilize Digital Marketing
If you want to use your business loan to expand your customer base, increase your online presence! According to a recent article by Junto, 81 percent of consumers in the U.S. perform online research before making a purchase. This statistic supports the notion that not being on the Internet is no longer an option. Consider using your small business loan to hire a digital marketing professional or recruit an agency to manage your digital strategy. Or, you could run your own digital marketing campaigns; however, you’ll need some basic knowledge of digital marketing tactics. If you choose to run your own campaigns, use your business loan to launch campaigns on Google, Bing, and Facebook. In today’s fast-paced world, you can’t afford to opt out of digital marketing, as it’s such a lucrative way to reach customers.3. Purchase New Equipment
Dental equipment isn’t cheap, but it’s imperative to perform your services and give your patients the best possible care. If your equipment is broken or outdated, a business loan could help you invest in new replacements. Before applying for an equipment loan, review your business plan and cash flow statements to determine how much money is needed for equipment costs. As previously mentioned, you could take out an equipment loan to specifically fund those purchases. However, suppose you need your loan for equipment in addition to other business costs. In that case, you may want to pursue a business loan from an alternative lender.4. Start an Expansion Project
Is your business location too small, or does your office look old and outdated? If you answered yes to these questions, consider using your business loan to fund an expansion project. With a larger practice or another business location, you can have ample space to grow your business. Using your term loan, you can purchase commercial real estate or use it to expand your existing location. These projects can be challenging to afford if you don’t have access to additional financing, so be sure to apply and get approved for funding before starting your project.5. Acquire Another Dental Practice
Do you want to purchase an existing dentist practice? Using your loan, you can acquire another dental practice. Once the acquisition is complete, you’ll likely inherit more patients. Due to this, you could use your loan to afford the additional expenses, which include:- Hiring more staff members
- Expanding your office space
- Ordering additional inventory
- Pay for branding or PR services
6. Invest in New Technology
A great way to utilize additional working capital is to invest in technology to make your operations more efficient. For example, you could use a business loan to:- Upgrade your computer system: A new computer system can help your admin team work more efficiently. For example, you can invest in a new scheduling system or transfer your charts from paper to digital files.
- Purchase tablets: Instead of having patients complete paper forms, purchase tablets so that they can submit paperwork digitally, making the sign-in process faster.
- Invest in a user-friendly website: It could include a chat function, scheduling assistant, and patient management tools.
- Hire a mobile developer: Recruit someone who can create a user-friendly app for your patients. This app can use to book appointments, pay outstanding bills, and learn about your practice’s services.