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Starting or expanding a dental/orthodontic practice can feel overwhelming, especially when it comes to securing the right financing. Whether you’re fresh out of residency or a seasoned dentist or orthodontist looking to grow, navigating loans, interest rates, and cash flow can be a complex task. In this episode of the GrowOrtho Podcast, we’ll break down key financing strategies, common pitfalls to avoid, and practical steps to ensure long-term success.

We’ll cover everything from startups to expansions and even refinancing options, so you can unlock your practice’s full potential.
Introduction to Dental/Orthodontic Practice Financing

The road to opening a successful dental/orthodontic practice often starts with financing. While securing loans for equipment, marketing, and working capital might seem like a straightforward process, the details matter. The right loan can set you up for success, while an ill-advised financial decision could restrict your growth potential.

For many dentists and orthodontists, the first question is whether to go with traditional banks or specialized lenders. Each path has its pros and cons, and understanding these is crucial for making the best decision.

The Difference Between Traditional and Fintech Lenders

One of the first choices you’ll face is deciding between traditional banks like Wells Fargo or Bank of America and newer fintech lenders like Provide. Traditional banks have long-established lending practices, but they often come with slower approval times, more rigid structures, and less flexibility.

Fintech lenders, on the other hand, offer speed and adaptability. As Jon Shaw, a healthcare financing expert from Provide, explains in this episode, “Fintech companies have a streamlined process, offering approval times of just four to five days compared to the weeks or months it may take with traditional banks.”

This agility is invaluable, especially when every day of delay could cost you thousands in lost revenue. Fintech lenders also offer tailored solutions based on individual needs, making them more suited to healthcare professionals.

Common Pitfalls For First-Time Practice Owners

The excitement of starting your own dental/orthodontic practice can sometimes lead to financial missteps. Here are three common pitfalls to avoid:

1. Underestimating Start-Up Costs
Many first-time owners are surprised by how quickly costs add up. From building out your office space to purchasing equipment, these expenses can easily exceed initial estimates. Shaw emphasizes, “In today’s market, a typical startup loan is around $800,000. However, many dentists and orthodontists come in expecting to need far less, which leads to financial strain down the road.”

2. Lack Of Cash Reserves
Building a practice takes time. Without proper cash reserves, even the smallest hiccup can derail your plans. Having enough working capital for marketing and hiring the right team is essential. As Shaw notes in the episode, “It’s common to see doctors run out of cash too early because they didn’t plan for a proper runway for marketing and operations.”

3. Taking On Too Much Debt Too Soon
It’s tempting to purchase all the latest equipment and build a state-of-the-art facility. However, overextending yourself financially can backfire. Consider starting with fewer operatories or scaling up gradually. Fintech lenders like Provide often offer flexibility to revisit financing later if your practice grows faster than expected.

Expansion Strategies: Multi-Practice Ownership

Once your practice is thriving, you may consider expanding to a second or third location. While the idea of multi-practice ownership is appealing, it’s not without challenges. Expansion requires strategic planning, especially when it comes to financing.

One of the biggest hurdles is securing financing for ground-up construction or purchasing additional real estate. According to Shaw in this episode, “Provide offers 100% financing for ground-up construction, which includes everything from land purchase to building out the facility. This allows dentists and orthodontists to keep their cash reserves intact while expanding their practice.”

If you’re looking to expand, ensure that your financial foundation is solid. Start with one location, master its operations, and then move forward. This steady, pragmatic approach ensures you don’t spread yourself too thin.

Refinancing — When And Why It Makes Sense

If you’ve been in business for a few years, you might find that refinancing your practice loan could save you money or free up cash flow.

Here are a few scenarios where refinancing makes sense:

1. High-Interest SBA Loans: SBA loans often come with higher interest rates and variable terms. Refinancing to a fixed, lower interest rate can save you money over the life of the loan.

2. Consolidating Debt: If you have multiple loans or short-term debt, refinancing can help streamline your payments and improve cash flow. This can free up funds for renovations, new equipment, or marketing.

3. End Of A Loan Term: Some loans come with “balloon payments,” where the full balance is due after a set period. If this is approaching, refinancing can help you avoid large one-time payments that could strain your finances.

Building A Strong Financial Foundation

Whether you’re just starting or ready to expand, securing the right financing is critical to your dental/orthodontic practice’s success. Working with a fintech lender like Provide offers unique advantages in speed, flexibility, and tailored support for healthcare professionals.

By avoiding common pitfalls and considering long-term growth strategies, you can ensure that your practice not only survives but thrives. So, whether you’re refinancing, expanding, or just opening your doors for the first time, make sure you have the right financial partner by your side. Find out more about Provide by emailing Jon Shaw at jon@getprovide.com.

By taking the time to plan your financing carefully, you can avoid costly mistakes and position your practice for long-term success. If you’re ready to take the next step, be sure to consult with experts who understand the specific needs of dental and orthodontic professionals.