You probably hear it everywhere you go, whether it be from the news or your favorite investor podcast, that now is the time to refinance your dental practice. Interest rates are at all-time lows, and those hideous rates you’re locked into can be lowered substantially.
We’ve uncovered the top 4 reasons dental practice financing will improve your bottom line. Now is definitely an amazing time to refinance or consolidate your practice’s debt and keep more money in the bank.
An Average Savings of $250,000
Refinancing your dental practice is a way to realize cost savings without investing a dime. When you start the process, you’ll talk to your lender about your current debts and rates. Consolidating loans, leases, and credit card debt as well as reducing the interest you pay on your loans will amount to cost savings.
Consider this for a moment. The more individual leases, loans, and credit cards you pay every month, the more money you waste. Simply by consolidating those payments, you can save thousands per month. Then, when you reduce the interest rate, you save even more.
Dr. Porter is a real-life example of how punishing interest rates can be! He saved more than $500,000 in interest over the life of his practice loan by going from an 8% variable rate loan to a 4% fixed-rate loan.
If you’re struggling to pay the bills and your employees, you’ll be interested in hearing this next story. A practice owner in New York wasn’t even taking a paycheck so that he could pay his factoring company. With the help of a lower interest rate and a $195,000 20-month term loan using a weekly payment structure, he’s finally able to save $25,000 per month and breathe a sigh of relief.
Best Dental Practice Financing Rates of All Time
As you know, it’s hard to get off the ground without the proper dental practice financing, but that doesn’t mean you’re stuck with the rates you have. Interest rates have hit historic lows. If you financed your practice or your equipment when the rates are high, you’re probably paying more than you have to. Your payments are going to interest rather than principal, and that debt is just hanging over your head.
Dr. Rassouli had a $400,000 loan that was making a bank rich, not him. Ivanhoe was able to secure him a loan at 4.21% interest (was 8.9%), which means he saved $1,562 per month. Imagine all of the things you could do with that!
If you have big plans like Dr. Davis, you can also take advantage of special products like our Banking Triple Play. We helped him consolidate his debt, refinance his dental practice, and purchase a competitor’s dental practice with NO MONEY DOWN. He saved money and scaled his business, putting him in a better financial position.
No Need to Use Personal Assets
Often, dental practice owners are required to back their loans with their personal assets. You may not be worried about this during economic booms, but when life becomes uncertain, you’re likely to lose a lot of sleep at night. No one expects a viral outbreak like today or a housing bubble to burst as it did in 2008, but these things do happen. If your credit score supports it, why not make sure you never have to lose sleep (or your house)? No one wants to tie their home to their business.
SBA loans are great for those just starting out, but sometimes the terms are just crushing. When Dr. Moore came to us, he had an $852,000 loan on his practice with a crushing 8% variable-rate. His house was wrapped into the loan as additional collateral. He had some past credit issues, but a strong cash flow. Not only was he able to remove his home as collateral, but he was also able to secure a 4.18% fixed rate.
As an added bonus, he received another $75,000 as a line of credit to use as needed for the next 7 years. Dr. Moore turned things around by restructuring his financing and saved himself $3,325 per month.
100% Dental Practice Acquisition Financing Available
You may want to buy your first practice, or you may want to expand to a second practice as Dr. Peters did. He was able to purchase another practice and scale his business with a no money down, 4.31% interest practice loan for $122,000. He also consolidated $345K in debt at the same rate and saved $3,700 per month.
You may be planning to make an investment like Dr. Knizley. She wanted to buy a practice with a solid cash flow, but she didn’t expect the considerable down-payment she would need to secure her funding. We were able to help her get it 100% financed (most lenders require at least 10% down). Her 10-year loan has an interest rate of just 3.89%, and she also received a $75,000 line of credit with a 4.95% interest to use as she needs for working capital.
Now Is The Time To Take Advantage
Financial success stories happen all the time at Ivanhoe Capital Advisors. Now is the time to refinance your dental practice, acquire another clinic, buy a building so you don’t have to lease anymore, or restructure debt. Free yourself from variable-rate and high-interest loans today!