What to know about Dental Equipment Financing
What’s dental equipment financing, and why you might need it?
If you’ve been scouring through the internet for information on dental equipment financing or talking to equipment financing companies, you will notice that there is a big difference between what they promise you and what you really get.
Yes, they make it sound like dental equipment financing is really simple and easy, but you stumble across little blips in your radar that should raise some alarms. Whether you’re searching for information on public forums, professional associations, or even social media channels. You can’t help but start to feel suspicious! Is it really as easy as they say it is? Is the cost of financing really as low as they lead on?
First things first, Financing is a business, just like any other, such as, say, dentistry! How would you react if a patient were to tell you that dental care costs too much and that you could do the job for a lot less? Performing your craft without the right tools would be frustrating to say the least.
Let’s talk about dental equipment financing rates.
Let’s say you’ve got excellent credit and you want to buy new equipment. What if you were to go for a cheap in-house financing?
You can expect the company to be upfront with the rates, which are quite low. But why do you need financing any way?
Buying used dental equipment.
If you want to buy used equipment, you will not get any financing from in-house companies. So your best option will be to go with an equipment financing company that offers reasonable but not cheap rates, perhaps around 6% to 8%. You will get much better service from them and fewer restrictions. The lease will be structured in a way to save you a lot on the taxes.
What if you have a new practice, less than two years old?
You are new to your business but have very good credit. There are substantial risks to a new dental practice, there is no way of telling whether you will succeed or fail. That’s why the rates are higher for you than it is for an established business.
Still, you are lucky to be a dental professional as equipment financing companies treat you with kid gloves. They calculate your time in business right from the date of your dental license.
This means you will get much better rates than other types of small business start-ups, and might have to pay between $500 and $575/month on financing worth $25,000. For most non-dental businesses this is more likely to be $800/month on financing of $25,000.
What if you don’t have perfect credit?
In-house financing requires a dentist to have a credit score of 700 or above. What if you don’t have that?
A dental equipment leasing company will have no problem providing you with financing at $550-$575/month on $25,000 if you have a credit score of below 700 but over 650.
If your credit score is under 650, then it might be a little harder for you to get financing at low rates. But if your monthly billing is the same as the cost of the equipment being purchased, you will still be approved.
Also, you will be charged at $1,100/month on $25,000 if you have a credit score of below over 625.
Does that work for you? Don’t hesitate to contact us to know more about your options on dental equipment financing. We have a great record of working with Dental practices so we understand why the latest 3D imaging machine is needed to stay competitive.