Credit for Dental Practice
Anyone who wants to take over a doctor’s office or wants to set it up knows very well from the outset that this will cost a lot of money. The costs at a dental practice are particularly high. Only in very few cases can this high investment be financed from your own resources. As a rule, a loan is required for this. But which type of financing is worthwhile with a loan for the dental practice? What needs to be considered and what does the loan really cost in the end?
Different ways of getting a loan to a dental office
It is important in the first step that the loan is selected so that it fits the project. So the term must be compatible with the useful life of the practice. If you only want to open or take over a dental practice at an advanced age, you cannot choose a loan with a very long term.
This should always extend to a maximum of retirement age. In addition, when financing, it should always be borne in mind that the practice’s inventory must be renewed at some point. Funding will also sometimes be required for this. An ongoing loan could prevent this.
A repayment loan for a loan to the dental office
A long-term repayment loan is usually recommended when financing for medical practices. Here, the monthly repayment is constant over the entire term. The consequence of this is that over time the constant high repayment melts the remaining debt and less interest is due. The rate is steadily falling, providing financial relief month after month. This is particularly important if the practice’s inventory has to be written down degressively. This creates tax cuts in the early years. The tax reductions can then finance the higher loan rates that arise in the first few years.
If you do not opt for a repayment loan, you can of course also use a classic installment loan. The loan amount can also be freely selected here. However, the monthly installments do not decrease, as these are not based on the repayment, but the installments are fixed over the entire term.
However, a credit line for a loan to the dental practice is not recommended. You are flexible here when it comes to accessing the loan. But the interest rates are far too high compared to other types of credit, so this flexibility is not financially worthwhile and would pay off. With classic financing, you are much better exposed here.