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Business Loans For Orthodontic Practices

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Business Loans For Orthodontic Practices

Business Loans for Orthodontists

A healthy smile goes a long way. In fact, the realm of orthodontics is a highly profitable field with many great opportunities. For those orthodontists who own their own practices, you know that the success of your business can sometimes rely on having the right funding at the right time. A good orthodontic practice, like any professional medical facility, should be stocked with the latest, most advanced technology and best resources available so that your business flourishes. Unfortunately, most medical supplies are costly, to say the least. While managing your own orthodontic practice is expensive, there are plenty of solid business loans available to help you finance it. 

Want to start your own orthodontic practice? Then check out what you need to start a business in Canada

What a Business Loan Can do For Your Orthodontic Practice

As we said before, we’re well aware of the exorbitant costs of things like medical equipment and reliable space to practice your craft. That’s why a business loan can be an extremely beneficial financial tool for both you and your practice. Below, we’ve listed a few of the resources you could have at your disposal once your loan is approved:

Renovate Your Space

A visit to the orthodontist isn’t always a pleasant experience. With a business loan, you can create a modern, spacious, comfortable and entertaining area for your patients to wait for their appointments. For example, you can purchase high-quality furniture and televisions to occupy your waiting room. Additional funding can also help you afford a larger, easily accessible locale when necessary.

Orthodontic Equipment

As mentioned, orthodontic equipment can be expensive but necessary.  You can purchase state of the art orthodontic equipment such as adjustable patient chairs, overhead lighting, dust and fume controllers. You can also purchase the latest orthodontic instruments such as pliers, headgear, bite sticks, cutters, gauges, impression trays, and more. 

Orthodontic Supplies

There are a variety of orthodontic supplies required to properly operate your practice. While they may individually be affordable, these small costs can add up, making it hard to afford. With a business loan, you can spread your payments and purchase all your orthodontic supplies such as elastics, floss, cleaner, bands, brackets, and bonding agents. You can also finance any modern laboratory supplies you may need.

Learn how to better manage your small business inventory

Orthodontic Staff and Office Related Expenses 

In order to operate your business, you’ll need a support staff. Many orthodontic practitioners have secretaries, laboratory technicians, and hygienists. You’ll also need to purchase safety and protective gear like lab coats, masks, safety glasses, and other medical equipment. 

For efficiency and organization, you’ll also need good office equipment and supplies like computers, printers, phones, scanners, intercom, paper, pens, and other miscellaneous items. 

Thinking of hiring an employee? Be sure to set up payroll.

Costs of Using a Business Loan For Your Orthodontic Practices Expenses

Before applying for a business loan, it’s important to understand how much it will cost you over the life of the loan. In order to calculate your cost of the loan, you’ll need to consider the following factors: 

  • Interest – When evaluating your interest rate be sure to use the APR as it shows you the cost of borrowing the principal plus any other costs or fees associated with the loan such as the loan origination fee
  • Fees – As mentioned above, you should also consider all the fees associated with the loan. Often the APR is much higher than the interest rate. 
  • Term Length – Pay close attention to your term length and payment frequency. Sometimes payments may seem small and affordable due to long terms or shorter payment frequencies. While long terms do provide affordability in the short term, you end up paying a lot more interest in the long term. 

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Where Can You Apply For a Business Loan for Your Orthodontic Practice?

There are several ways you can apply for a business loan to cover your orthodontic practice’s expenses. Depending on your financial health, some will yield you better results than others.

Banks 

The most traditional way to obtain a business loan would be through a bank, credit union or some other traditional financial institution. Problem is, these institutions often have strict lending standards and a long application process that makes it hard to get a business loan. For example, most banks require a good business credit score to qualify which start-ups and young orthodontic businesses don’t yet have. On the plus side, if you are able to qualify for a business loan with a bank, you’ll have access to competitive rates.

Alternative Lenders

If you have a bad credit score, business or personal, applying with an alternative lender would be your next best choice. Alternative lenders have much more flexible lending standards and often cater to individuals and businesses with subpar credit. While their rates may be more expensive, their loan approval and funding process are a lot easier and faster. 

Government of Canada

The Government of Canada offers a small business financing program called the Canada Small Business Financing Program (CSBFP). Applicants can receive loans up to $1 million and up to $350,000 for equipment and leasehold improvements. This program is available through most major banks, credit unions, and other financial institutions in Canada. 

Learn more about how you can finance your business through government financing programs

Best Business Loan Providers to Grow or Start Your Orthodontic Practice

AmountAPRTerm (months)
SharpShooter Funding1k-300kFee-Based: Starting at 9%12- 60 Learn more
OnDeck5k-300k8% – 29% 6-18Learn more
Lending Loop1k-500k+5.9%3-60Learn more
Thinking CapitalUp to 300k8%-22%6-12 Learn more
Merchant Growth5k-500k-6-18Learn more
BDC100K +6.05% +60Learn more
IOU Financial5K-100k15%+12-18Learn more

What do You Need to Qualify For a Business Loan For Your Orthodontic Practice

Depending on the lender you choose, the requirements to qualify will vary as each lender has their own set of rules and lending standards. However, in general, most lenders will base your approval on the following criteria: 

  • Personal and business credit score – Both your personal and business credit score will be used to evaluate your creditworthiness. If you’re a young or new business, more focus will be placed on your personal credit score
  • Cash Flow – Your cash flow plays an important factor in your lender’s decision-making process. When applying you’ll want to make sure you have strong positive cash flow as a negative cash flow indicates you’re spending more than you’re earning, which means you’ll be unable to repay your lender. 
  • Assets – In order to secure the loan, you may need to put up some collateral such as your orthodontic equipment, accounts receivable, inventory supplies, and other business assets
  • Debts – The debt you currently carry can easily sway your lender. The more debt you have the less capacity you’ll have to take on more debt. Reducing your current debts and liabilities can help your odds of qualifying. 
  • Time in business – The longer you’ve been established, the more reliable you’ll look to your lender. Statistics have shown that new businesses have a high failure rate, approximately, 40% of new businesses fail within the first 5 years.
  • Qualities – Your lender doesn’t just evaluate your business, they also assess your personal and business character through references and reputation.
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Alternatives Ways to Cover Your Orthodontic Practice’s Expenses

In addition to business loans, there are a number of other financing options available to cover your orthodontic practice expenses.

Equipment Loan 

In order to successfully operate your orthodontic practice, you’ll need expensive equipment. While a business loan can help you finance it, an equipment loan can as well. An equipment loan works just like a business loan except, the equipment you’re purchasing is used as collateral to secure the loan. This security makes an equipment loan much easier to qualify for and can potentially lead to better rates as well. However, it is important to note that most lenders will only finance up to 80% of the equipment, as such you’ll need to come up with the other 20% yourself. 

Business Line of Credit 

Having access to a business line of credit is great for emergencies as you’ll have instant access to it whenever you need it. Moreover, it’s great for covering small orthodontic expenses, as you only pay interest on the amount that you use. 

Merchant Cash Advance 

If your orthodontic equipment needs repair or you need to finance some other large expense quickly, a merchant cash advance can be obtained fairly quickly and easily. With a merchant cash advance, you receive a lump sum of cash in exchange for a percentage of your future credit and debit sales. 

Frequently Asked Questions

Can I get a business loan for my orthodontic practice if I have bad credit? 

Yes, there are many alternative lenders in Canada willing to provide business loans to companies with bad credit. These lenders base their approval on more than just your credit score, they evaluate your business creditworthiness through your assets, debts, cash-flow, monthly sales revenue, and even your character.  

How do I ensure I get the best business loan rate? 

Comparing business loans rates and obtain quotes is one of the best ways to ensure you’re getting the best rate for you. Using a loan comparison website can not only help you research lenders but, a single application can lead to multiple quotes from different lenders. In addition to that, you can receive better rates by improving your candidacy as a borrower. You can do so by improving your credit score, reducing your debt level, or securing the loan with an asset. 

How will a business loan affect my credit score? 

The only time your business loan will affect your personal credit is when the lender performs a hard inquiry during the application process. After that, the payments you make to repay your business loan will go towards building your business credit history. 

Find The Right Financing For Your Business

We can connect you with a great business loan lender who will help you keep your orthodontic practice operational and profitable. Our partners can provide you with many benefits that most banks and other traditional financial institutions might not, such as:

  • A faster and more efficient approval process
  • Better rates than our competitors
  • Easy and orderly applications that you can complete on your home or work desktop, laptop, or smartphone
  • Adjustable payment plans that suit your financial needs
  • Less time waiting and more time to concentrate on what’s important to you

A business loan can help make your dreams of running a successful and profitable orthodontic practise a reality. Get the process started today.

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