In this article, we are discussing the various ways for a dentist to raise that initial financial fund to start a dental practice.
2 # Ask your friends or raise money from private lenders
It is another way to raise money on a mutual understanding or a private legal contract between two individuals. It entirely depends on the level of agreement between the individual parties. However, before you enter into an understanding with any individual or private lender do proper paper works.
Never enter into a verbal contract.
When, signing or agreeing to a contract for borrowing the money, read the terms of the agreement carefully. It is for your safety so that you do not enter into any hidden clauses within the contract.
I am not saying that do not trust people or friends. However, there is a difference between trust and blind trust. There have been many incidences where due to casual approach and overlooking the legal documents while taking a loan, individuals have landed into financial troubles.
So, now you have been warned.
3 # Taking Bank Loans to Raise the Money for Your Dental Practice
Other than borrowing money from family, friends of private lenders, this is one of the most commonly used methods to raise funds for establishing your dental practice. A loan taken from the bank is regulated by the banking laws of your country.
It is one of the most organized sectors for every individual to raise money in a perfectly legal manner. However, there are many points that a dentist must consider before deciding to borrow money from the bank.
These points apply to all dentists irrespective of whichever country you belong. Follow these points very carefully when you take a bank loan.
Bank Loans: If you are planning to take a bank loan to start your dental practice, then you have a difficult choice to make. You have to consider the banks that provide you a credit at a lower interest. However, the interest rate is not the only factor to consider.
What are the points to consider when taking a bank loan?
Interest Rate: The most important point to check first. Your goal should be to get a loan from the best bank you can manage at a lower rate. So locking in a competitive fixed rate for the next seven to 15 years is your best option.
Emi Options: Usually the bank checks your credit balance or the credit reputation of your guarantor before providing you a loan. If you are applying a credit for the first time, then the bank will offer you the lower loan amount and subsequently increase it after making sure that the finance is being used efficiently.
Guarantor: A first-time applicant for bank loan requires a guarantor with an excellent reputation or some security before approving the loan application.
Loan Term: While taking a loan you should consider the most extended loan term available (around 10 to 15 years). Breaking the credit for longer years will lower the payments. If your dental practice keeps pace and shows growth, then you have the option to prepay the entire loan in short segments.
Pre-Payment Option: Pre-payment options vary from lender to lender. Loan pre-payment terms are less important in the early years as you open and build your practice. However, pre-paying your loan may become an option after your practice is no longer considered a start-up and is looked upon by lenders as an established practice. However, this will again vary from bank to bank.
The points mentioned above are more or less standard for every dentist irrespective of the country. It is the beauty about money. It always follows the same rules (with slight modifications) everywhere. So, check all the bank regulations at your locations and then apply for a bank loan.