1. What is a good credit score as a dentist to qualify easily for a practice loan?

The more, the better, but preferably above 760.

Before we even consider a practice loan, we review our clients’ total financial picture, including their credit scores. We also recommend that you constantly monitor your own credit by using https://www.annualcreditreport.com/index.action. 

2. How should I organize my personal expenses?

We suggest that you be very cautious with personal expenses, such as student loans, credit cards, home purchases and automobile expenses. Lenders look into personal expenses very thoroughly and ensure that borrowers are responsible. High credit card balances, high car loans, unpaid student loans, and large mortgages with low equity are very common reasons why loans don’t get approved.

3. What kinds of consultants should be on your team?

At a minimum, you need a Dental CPA and a Dental Attorney. We see again and again that transactions are completed with no consultants at all, simply to save money in the short term between private parties. Other consultants you could work with include Practice Consultants, Buyer Representatives, and a reputable escrow company. We also suggest that you work with a committed relationship manager who works for a reputable bank, knows dentistry, and makes reasonable loans.

4. How should I plan my due diligence?

  • Financial Review: Performed by a Dental CPA
  • Operational Review: Performed by a Practice Consultant
  • Contract and Lease Review: Performed by an Attorney
  • Charts Audit: Performed primarily by DDS
  • Underwriting/Loan: By a Reputable Bank/Lender familiar with dental practices
  • Field Examination: Performed by all to review any source documents deemed necessary.

5. Should I incorporate?

YES. Since this area needs specific considerations, please ask us privately to consider your personal needs.

6. What documents do I need to prepare?

  • You will need three years of full business and personal tax returns (all pages) & YTD documents;
  • A copy of a CA driver’s license and Dental License;
  • A copy of your most recent bank statement to validate liquidity on the Personal Financial Statement; and
  • Curriculum vitae

6. What is a Letter of Intent in dentistry?

When buying a dental practice, one of the most important documents you will need in the process is the Letter of Intent (or LOI). The Letter of Intent is a legally non-binding document that contains all the elements of the practice transition that you have negotiated with the seller.