You will face many challenges when you start your business. Some of these challenges include finding the right location for your startup, marketing your services, and financing your operations. For example, did you know that 82% of startups fail because of problems with their cash flow? This cash is necessary to cover rent, licenses, and wages among other expenses. Buying equipment for the business is also challenging if you are facing liquidity problems. That is especially true for practices like dentistry where serving a client without the requisite equipment is impossible. Here are 4 tips to financing your dental practice.
- Pay Based On Your Sales Figures
Fixed periodic payments characterize conventional loans. What happens when you cannot make this payment? Well, failure to meet this financial commitment leads to fines, penalties, or seizure of your assets. This kind of financing arrangement is bad for your business. Remember, companies experience financial difficulties at certain times. Loan repayments should reflect these times. That is only possible if you pay your debt as a percentage of your sales figures, and not as a fixed periodic payment. Going for alternative financing for dentists means that lenders will not squeeze you into additional debt especially when business sales are low. Moreover, you will repay your loan quickly when your company is doing well.
- Refinancing Options Should Be Available
How do you pay for expensive equipment such as top-of-the-line dental chairs or X-ray film auto processors? Will you buy surgical microscopes, 3D imaging systems, and intra-oral cameras? Can you start or expand your business without this equipment? Business financing helps you deal with such things. Unfortunately, conventional loans have rigid terms. For example, many of them lack provisions for extending the repayment period or increasing the loan amount. Consequently, buying additional equipment or expanding your business while repaying the loan is a difficult undertaking. Avoid such loans. Instead, go for loans that have options for refinancing.
- Quick Finance Processing Systems
Dentists work for an average of 36 hours each week. They spend more than 33 hours of this time treating their patients. They spend the remaining hours on administrative duties such as signing documents and evaluating business reports. These statistics show that practicing dentistry consumes a lot of time leaving little room for other things in life. These things include running around offices seeking approval for loans. Dealing with such bureaucracies is difficult for dentists because they have a limited amount of free time. Therefore, going for a financing scheme that has a quick application and approval process is an excellent idea.
- Pay a Fixed Amount of Cash
Businesses rarely pay a fixed amount when it comes to financing the debt obligations. That happens because most lenders charge variable rates of interest. These variable rates account for inflation among other things. Penalties cause fluctuations as well. Regrettably, unstable levels of debt lead to a corresponding level of instability in your practice. More specifically, planning for your firm’s future is impossible when your debt obligations change because of factors that are beyond your control. These factors include inflation among other things. Therefore, going for a loan with a fixed percentage attached to it instead of variable interest is an excellent idea.