October 1, 2021
Pretty much everyone is tired of thinking about COVID-19, but if you’re considering buying a dental practice, then it is definitely a factor you shouldn’t overlook. It has had a notable effect on how banks are giving out loans, and by knowing how things have changed, you can ensure you get the money you need quickly and without hassle. What is different now? Find out what you need to know in today’s blog.
Are Banks Even Lending?
The entire U.S. economy essentially paused for a few months during 2020, and countless dental practices went dark. As such, conventional wisdom would tell you that many banks aren’t eager to give someone money to buy a dental practice. Even today, despite the world having opened up quite a bit, people are still thinking twice even before going to the grocery store, let alone attending a dental visit. So, the first question many buyers are asking is, “Is it even possible to get a dental practice loan these days?”
The answer is yes, banks are still more than willing to lend buyers plenty of money to purchase a dental practice if they are qualified. While the average amount is a little lower than it was a few years ago, what trips most people up these days is that the loan requirements have shifted, with one major factor coming to the forefront.
How Dental Practice Loans Have Changed
You likely already know the basics of getting a loan to buy a dental practice. You need to show that the practice you’re looking at is a viable business as well as prove that you (or your partner dentists) will be able to produce at the same level or more that the practice is currently.
This is still the norm, but now, banks also want to know how well a practice has bounced back after the COVID-19 shutdowns. It’s expected that profit went down for every dentist in 2020, but a bank will certainly ask about how the practice you’re hoping to purchase has recovered. Did they get back to business as normal once restrictions were lifted, or did they lose half of their patient base? Are they still seeing patients at a reduced capacity? Did team members leave, so now it isn’t able to produce as much as it did in previous years?
When applying to get a loan, it’s important to show that the practice has come back strong from COVID-19 or is well on its way to doing so. The same goes for your own production. So, it’s wise to bring more documentation about 2020 and 2021 than you might think is necessary, because in this unique time, every financial quarter can make or break whether or not a bank decides to approve your loan.
How Next Level Consultants Can Help
While the previous section touched on the biggest change to dental practice loans within the past year, countless other minor adjustments have been made as well. Being aware of how they work can make your life much easier when it comes to getting as much money as possible, but of course, who wants to spend their free time looking into financial policy? That’s where Next Level Consultants can help.
Led by Michael Dinsio and Paula Quinn, NLC is staffed by fine print experts who have experience getting financing for hundreds of dental practices around the country. As such, they are the primary source for knowing how buying dental practices works in the post-COVID-19 era.
If you are thinking about buying a dental practice and want to guarantee your loan is approved with the smallest number of headaches possible, NLC is eager to help. Over the past year and a half, we’ve done our research and talked to countless bankers, ensuring that when it comes time to present your loan application, approval is all but guaranteed.
To learn more about our services and the expertise you’ll benefit from when you decide to partner with Next Level Consultants, contact us today.