Blog   Tagged ‘repayment’

How to finance your dental practice: the most important questions to ask

  |  Posted by


As a dental professional, you’ve probably spent at least eight years in school preparing for your career (12 to 14 if you are a dental surgeon). After that, your focus will be on growing your new practice by building your patient panels and providing quality dental care to the community you serve.

dental practice financing

But what’s next? There are questions you need to ask yourself as soon as you open a practice:

  • Does your practice need remodeling or construction?
  • Do you see yourself bringing on a new partner at some point?
  • And most importantly, are you adequately planning for your retirement?
Continue Reading

As we work with dental practitioners, we’ve noticed a trend within this profession. A lack of strategic borrowing to pay for their practice’s expenses is a leading cause that prevents dental practitioners from retiring when and how they want. Only around 8 percent of dentists are able to retire and maintain the lifestyle they had during their working days.

Dental practitioners face many challenges in today’s market. Those challenges are further motivation to properly manage your funds. An important aspect of your finances is considering the best borrowing practices for your office. Some questions to consider when thinking about a loan for your dental practice:

What are your goals for your practice?
Determine where you see your practice over time. Figure out how quickly you want to grow your practice or if you have aspirations to open multiple locations. Identify a plan and partner with industry professionals who will help you achieve your ultimate objectives. Then discuss with your banking partner what financing structure will help – not hinder – this plan.

Are you borrowing with the best interest of your practice in mind?
Ask your banking partner to explain all loan options so you can align the loan structure to the best interest of the practice.  For example, some loans have a balloon payment at the end, which could require you to pay additional interest. The money you might have to pay in additional interest could be used instead to help expand the practice or could be committed to your retirement.

What are your ramp-up and wind-down strategies?
In addition to determining the long-term growth of your practice (ramp-up), you will also need to eventually consider succession and retirement strategies (wind-down). Have you considered hiring an associate to purchase your practice as a component of your exit strategy? Have you engaged a CPA firm to complete an evaluation of your practice? These are potential issues to consider as part of a succession plan.

Every practice is unique and you might even find that long-term goals change over time. Start planning early and understand what financing options are paramount for your practice. Find a banking partner who will help you determine the best loan options for your practice and your eventual retirement and succession plans.

For more financial advice, take a look at my video on Business Banking for Dentists.


When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


Dave Bauer is a Vice President / Region Manager for UMB Business Banking. He is responsible for leading the Business Banking teams in the St. Louis and Oklahoma City regions. He joined UMB in 2011 and has eight years of experience in the financial services industry.

Read One Comment

Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

The Five Cs of Credit

  |  Posted by

Are you an entrepreneur looking to start up a new boutique or local restaurant? Or are you an owner of an established firm seeking to expand or upgrade? Either way, securing financing for your business is sometimes an overwhelming process.

UMB has a long history of being prudent in our lending. We don’t want to put our customers, or ourselves, at risk, so we follow a sound underwriting process to ensure we are making the best decision for everyone involved.

Here are some common guidelines we use when it comes to the loan process.

Continue Reading


This is the overall impression you make on the banker. Business experience and educational background will be evaluated, along with references and past experience.

Word of Advice: You need a business plan. Be open and honest – you should provide the most accurate and objective information about the business and industry landscape.


You will need to detail exactly how you plan to repay the loan. Business cash flow, repayment timing and likelihood of repayment will be considered, as will payment history on your current credit. Financial partners need to have confidence that your business will generate enough cash to operate and sustain the company.

Word of Advice: Prepare to have money set aside for a down payment.  Don’t come to the table empty-handed.


This is the money you have individually invested in the business and is used to assess your risk should the venture not succeed. It’s important for you to demonstrate a personal financial commitment before seeking third-party funding.

Word of Advice: Financial institutions generally require that at least one-third to one-half of the business be funded with your money.


This is where assets you own are pledged to the lender as a secondary source of repayment in case the loan is not repaid. You also may be required to sign a guarantee with the promise to repay the loan if you cannot repay it with the profits from the business.

Word of Advice: Most banks will expect the collateral assessment to be greater than the loan amount.


This is the outlined plan for the loan, with details on how it will be used and for what purposes. Current economic and business conditions for all industries, as well as your business’ specific industry, will also be evaluated.

Word of Advice: Have a strong knowledge of industry trends, both nationally and in the local market. Timing can be critical.

You should pick a financial lender that will be your partner, not just your bank. After that, securing a loan to start or grow a business should be a smooth process and you’ll be well on your way to fulfilling your dream!

Leave a Comment

Tagged: , , , , , , , , , , , , , ,