• Twitter
  • LinkedIn
  • Facebook
  • Instagram
  • Youtube
Login  | Call now: (800) 780-7133
Kapitus
  • Problems We Solve
  • Products We Offer
  • Partner With Us
  • Blog
  • APPLY NOW
  • Search
  • Menu Menu
Dentist office

The Cost of Opening a Dental Office

November 1, 2021/in Dentists, Industry Challenges/by Vince Calio

Congratulations on successfully graduating dental school and earning your DDS or DMD. Statistics indicate that you are going to have a fulfilling and lucrative career, as US News and World Report’s 2021 Best Jobs Report lists being a dentist as the 9th best job in the country. 

The American Dental Association estimates that 77% of dental practitioners own their own practice, and according to the Bureau of Labor Statistics, the average annual salary of a general dental practitioner is $180,830. 

Before you set up shop, however, you’re going to have to learn about financing, administration and managing an office. You’re also going to need to become very cognizant about managing your own credit score. According to the ADA, starting a new dental office can cost between $350,000 to $550,000, depending on where you want to be located. Additionally, the cost of acquiring an existing dental practice can range from $500,000 to $750,000, according to Wells Fargo’s health care lending unit. 

That, combined with the fact that you probably have student debt piled up, means you will have to take the necessary steps to line up financing if you’re looking to start a new practice or purchase an existing one. 

Practice First

Before you think about starting out on your own, you may want to try to join a dental practice first. Doing so for a time will have many benefits when you seek to borrow money: it will allow you to establish your name as a dentist – something that a lender would look favorably upon. It will also give you a salary and allow you to start paying off your student debt (regular payments also help when seeking financing), and it will give you practical experience in the business side of running a dental office (i.e. like understanding the complexities of patient management and insurance). 

Additionally, if you’re just starting out, practicing with another dental office gives you the opportunity to be mentored by more experienced dentists who can offer you career and business advice. You also need to become a member of the ADA – something that lending institutions often require when you’re seeking financing. 

How Do You Assess Costs of a New Dental Practice?

Many new dentists may tend to overspend when starting a practice, so it’s important to itemize what you will need:

  • Choose a location. This may be the most important decision you make. Your location will largely determine the cost of leasing an office. Real estate in both urban and densely populated suburban areas will obviously be more expensive than a rural area, but you must also factor in your need for patients, so it’s important to heavily research the area in which you want to open shop. What is the location in which you are likely to get the most business for the cheapest office space? What is the competition in that area? Is this a neighborhood in which you want to live or perhaps raise a family?
  • Price out dental equipment. You’re obviously going to need a dental chair with a spit sink, which can cost up to $15,000, a dental x-ray machine which, according to the type of machine you buy, can cost up to $20,000, and other equipment. Like with any business, you want to find a supplier that you are comfortable negotiating with and that can accommodate your needs at the lowest possible price. Price out each item you will need.
  • Assess costs of office equipment and software. You’re going to need furniture such as desks, couches and tables for the waiting room, office chairs and most importantly, a computer system. You will also need electronic health records software specifically made for dentists, which range in cost. If you are planning to be a family dentist, you may need to consider turning part of your waiting area into a children’s play area complete with a variety of  toys appropriate for kids of all ages. 
  • Create a Website. Every small business needs an optimized website, including dental practices, because the internet is the first place people will turn to when looking for a dentist. Creating a website for your business may be a lengthy but worthwhile process. 
  • Get dental malpractice insurance. Malpractice insurance for any medical practice, including dental offices, is required in almost every state.
  • Hire Personnel. You are also going to need:
  1. An office manager to keep track of appointments, insurance issues and to greet patients, among other things. According to Salary.com, the median wage for a dental office manager is $37 per hour.  
  2. A dental hygienist to handle teeth cleanings, give patients information and help keep track of electronic health records. The average annual salary of a dental hygienist varies from state to state, according to ZipRecruiter. Washington state is the one in which dental hygienists make the most – the average annual salary is $84,957.
  3. A dental assistant to prep patients, sterilize equipment, organize dental tools and assist during dental procedures. According to ZipRecruiter, the average annual salary for a dental assistant ranges from $35,000 to $40,000 per year, depending on which state you are practicing in. 
  4. An attorney to assist you with establishing your business as a limited liability company (LLC) or other type of establishment and to obtain business licenses in your particular state and community.
  5. Outside vendors to assist you with tasks that you may not be an expert in, including marketing and public relations, IT and optimizing your website. 
  6. A financial consultant to give you advice on how to stay invested in your business and manage your money. Believe it or not, there are actually advisors out there that specialize in working with dental practices such as Dental Advisors.  

Create a Business Plan

Like any other small business, in order to get financing, you’re going to need a business plan. You many want to get expert advice on how to create a plan, but these plans generally include:

  • An executive summary of your business and description on why you believe your practice will be successful.
  • A brief description of your services, be it a family practice or a dental office that specializes in root canals or other types of oral surgery.
  • A summary of your practice’s management structure. This is especially important if you are opening a new dental office with another dentist. 
  • An analysis of your competition and marketing strategy. This is a brief description of who you will be competing with in your area and how you plan to attract new patients, and
  • A financial plan. This is the most important element of your business plan when you go to seek financing, and you may want to consider consulting with an accountant on this. The financial plan will give cash flow estimates; your personal financial information and a detailed description on how  you will spend your startup money, among other things. 

Getting Financing 

Seeing the total cost of starting a dental practice may hurt more than a root canal, but you do have plenty of options for financing. Plus, you have a unique advantage in that most dental practices usually end up being lucrative, and therefore, lending institutions tend to look favorably on them. 

Many banks actually have lending programs specifically tailored to funding new dental offices, including Bank of America and Wells Fargo. This is different than with most small businesses that often need years in business and a strong cash flow history in order to secure a loan.

Practice loans often range from five to 12 years, and the rate depends on a number of factors, such as your personal credit score, location, and business plan.

While lending institutions are often eager to finance dental practices, however, getting financing isn’t guaranteed. In addition to a strong business plan, banks will look favorably upon you if you have some experience as a practicing dentist. 

They want to see a strong personal credit score, so it’s important to make sure that you are up to date on student loan payments, car or mortgage payments and other bills, and have a strong payment history for any revolving credit cards you may have. If your student debt is overwhelming, you may even consider refinancing it to a lower monthly payment. 

Remember – You’re not Just a Dentist!

Like any other doctor or medical specialist, as a dentist your first priority will always be taking care of your patients – as it should be. However, it is important to remember that your job isn’t just filling in cavities and performing root canals. If you are looking to open your own practice, your business savvy is just as important as your dentistry skills, and combining both will allow your practice to thrive. 

https://kapitus.com/wp-content/uploads/dentist-office-feature-photo.jpg 1400 2100 Vince Calio https://kapitus.com/wp-content/uploads/Kapitus_Logo_white-2-300x81-1-e1615929624763.png Vince Calio2021-11-01 08:00:302023-07-31 09:57:01The Cost of Opening a Dental Office
a list of the types of loans for dentists

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

November 26, 2019/in Dentists, Industry Challenges/by Wil Rivera

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.

https://kapitus.com/wp-content/uploads/2019/11/iStock-587534758-scaled.jpg 1707 2560 Wil Rivera https://kapitus.com/wp-content/uploads/Kapitus_Logo_white-2-300x81-1-e1615929624763.png Wil Rivera2019-11-26 14:43:102023-09-19 14:09:09Loans for Dentists: When a Credit Card Won’t Cut It

LATEST FROM KAPITUS

  • Small Business Loan Application Checklist
  • Getting a Business Loan with Bad Credit
  • Traditional Bank vs. Alternative Lender
  • Understanding Business Loan Requirements
  • Types of Small Business Loans and How to Choose One

Subscribe To Our Blog For More Tips On How To Grow Your Business

Categories

  • Automotive
  • Being a Business Owner
  • Budgeting
  • Business Ownership
  • Business Stories
  • Cash Flow
  • Commercial Cleaning
  • Construction
  • Credit
  • Dentists
  • Featured Stories
  • Financing
  • Industry Challenges
  • Information Technology
  • Inventory Management
  • Manage Your Money
  • Marketing Your Business
  • Medical Practices
  • Offline Marketing
  • Operating Your Business
  • Performance
  • Plumbers
  • Pricing
  • Process
  • Restaurants
  • Strategy
  • Taxes
  • Trucking
  • Uncategorized
  • Vendor Management

About Us

  • Media Center
  • Team
  • Careers
  • Events
  • Success Stories
  • The Kapitus Difference
  • Developer Documentation
  • Blog
  • Privacy Policy
  • Terms of Use

Products

  • Revenue Based Financing
  • Helix® Healthcare Financing
  • Business Loans
  • SBA Loans
  • Line of Credit
  • Invoice Factoring
  • Equipment Financing
  • Purchase Order Financing
  • Concierge Services

Contact Us

  • (800) 780-7133
  • Email Us

Signup For Our Newsletter

Copyright 2023 Strategic Funding Source, Inc. All rights reserved. Kapitus and the Kapitus logo are registered trademarks of Strategic Funding Source, Inc.
  • Twitter
  • LinkedIn
  • Facebook
  • Instagram
  • Youtube
Scroll to top

This site uses cookies to store information on your computer. Some are essential to make our site work properly; others help us improve the user experience. We encourage you to read Kapitus’s Privacy Policy to learn more about how we use cookies and how we may collect and use visitor data. By continuing to use this site, you consent to the placement of these cookies

OK

Cookie and Privacy Settings



Privacy Policy

This site uses cookies to store information on your computer. Some are essential to make our site work properly; others help us improve the user experience. We encourage you to read Kapitus’s Privacy Policy to learn more about how we use cookies and how we may collect and use visitor data. By continuing to use this site, you consent to the placement of these cookies

"*" indicates required fields

Step 1 of 10 - TELL US ABOUT YOUR PRIMARY FINANCING NEED

10%

Find the right financing product for you.

Answer a few questions and we’ll match you with the best product based on your needs and current situations.

I need financing to:*

How We Make Getting Business Financing Easier for You

If you are looking to determine the best financing option for you, our matching tool streamlines the process and arms you with information that you can use before you apply. To match you with your best options, we ask you to answer a series of basic questions about your existing and future needs, current financial health, and your financing preferences – including amount to be financed, ideal terms and financing urgency. Our system then finds you up to four financing options to fit your needs. Once you’re matched, you can expect to be contacted by one of our financing specialists to help you navigate the application and selection processes.

How It Works

  1. Answer a few questions. You let us know some basic information about your financing needs, so we can find a match.
  2. See your financing matches. You'll get matched with up to four financing options based on your answers.
  3. Apply for financing. You can apply for all of your financing options by completing one simple application and providing a few documents.
  4. Get an Advisor: You have the option to be assigned a financing specialist to help guide you through the application process.

Find your financing match

Why do we need this information?

Each financing product has its own minimum and maximum requirements around the amount of money that can be acquired through that option.

Find your financing match

My Industry is:*

Why do we need this information?

There are financing options created to meet the specific needs of particular industries.

Examples that fall within this industry include

  • Business Accountants
  • Marketing & PR Agencies
  • Commercial Cleaning Companies
  • Printers
  • Human Resource & Payroll Firms
  • Office Supplies Organizations
  • Salons/Spas
  • Gyms & Other Workout Studios
  • Pet Services Companies
  • Personal Accountants
  • Home Cleaning Companies
  • Residential Landscaping

Find your financing match

I have not yet started my business

Thank you for reaching out to Kapitus. Unfortunately, our financing products are only available for existing businesses and we will not be able to help you at this time.

Why do we need this information?

The amount of time your business has been in operation is a deciding factor in the type of financing options available to you.

Find your financing match

Why do we need this information?

Each financing product has its own minimum requirement for the amount of revenue being brought into a business on either a monthly or an annual basis. In addition, your monthly and/or annual revenue can dictate the length and term on your financing option.

Find your financing match

I would like to pay off my financing in:*

Why do we need this information?

Each financing product offers different payback lengths and terms.

Find your financing match

I need financing for my business:*

Why do we need this information?

Each financing product has different paperwork and underwriting processes. As a result, the amount of time it takes to get approved for one type of financing over another can vary significantly.

Find your financing match

Do you have an existing loan?*

Find your financing match

My personal credit score is:*

Why do we need this information?

There are financing options for every credit type, however your personal credit score will determine your eligibility for each financing type

We’re finding your match

"*" indicates required fields

Step 1 of 4 - Tell us about you

25%

Sign up for the Kapitus Partner Program!

Sign up for the Kapitus Partner Program!

Sign up for the Kapitus Partner Program!

I would like to join the Kapitus Program as a:*

Sign up for the Kapitus Partner Program!

"*" indicates required fields

Whether you want to learn more about our financing options, are interested in becoming a partner or just have a general question, we’re here to help! Simply fill out the form below and we’ll get it directly into the inbox of the right person.
This field is for validation purposes and should be left unchanged.