Finance for your Dental Practice

The General Dental Council (GDC) has identified some of the key features changing the shape of dental provision in the UK.

Amongst the principal medical and clinical developments in dentistry, all are being driven forward at an ever-increasing rate by technological advances.

In addition, the gradual globalisation of the supply of many products used by dentists is also fast changing the shape of the profession, whilst it remains to be seen what impact, if any, Brexit has on the current state of dentistry in the UK.

A fast-changing world

All in all, any dental practice in the UK faces a fast-changing world in which business practices need to be tailored to keep pace with advancing technology, global trends affecting the whole of the profession and the impact of an ailing National Health Service (NHS).

Any enterprise, partnership or professional practice which is struggling to keep pace with such a fast-changing world is likely to need the finance necessary to make timely changes to its existing business practices. Whilst all around might be changing, the business continues its needs for financial management of:

  • the acquisition of new equipment and technology which is changing the shape of the profession for all involved;
  • the upgrading or enhancement of other assets, such as IT systems and hardware in particular;
  • the financial support for professional indemnity insurance required by any practising dentist;
  • provision for the marketing of your practice’s dental services;
  • the need to meet the general taxation and VAT liabilities of the practice; and
  • the ongoing need for sufficient working capital to ensure the smooth running of the business.

Dental loans

None of this is likely to be achieved without your practice at some stage turning to borrowing as an obvious source of the additional funding that becomes necessary.

Although there may be a place for long-term secured loans – for the purchase of surgery premises, for example – dental loans may also take the form of unsecured borrowing.

By their very definition, of course, unsecured loans do not require the security of assets to guarantee the loan. Neither assets owned by the practice, not personal assets of its practitioners, are therefore at risk in the event of financial difficulties and defaulted repayments.

Unsecured practice loans do not involve the long-term commitment of the typical secured loan, where repayments over many years inevitably accumulate substantial sums in interest – an unsecured loan, by contrast, may typically be repaid within as short a period as six months and no longer than five years.

Fixed rate dental practice loans

Dental loans such as these are also fixed rate practice loans – the rate of interest is fixed from day one until final repayment – so making your equal monthly payments a known value, unaffected by any changes in the base lending rate (which is likely to impact on many secured loans and may be raised in the middle part of 2018).

The fixed rate, short-term nature of an unsecured loan may be an especially attractive vehicle for managing the tax and VAT liabilities of your dental practice. Instead of one off payments when your cashflow is least ready to make them, an unsecured loan may help you to spread the cost throughout the year as a whole.

Indeed, many practices find this such a successful tax management tool, that one short-term unsecured loan is rolled forward into another each year, as a permanent solution to meeting recurring tax demands.

An unsecured loan is also sufficiently flexible to suit practically any application of funding for your practice. You may choose precisely the amount you wish to borrow – with repayment options that are similarly flexible within the relatively short-term of between six months and five years.

Dental loans on these terms, therefore, may provide the wherewithal for your practice to meet the challenges of a fast-changing world, by keeping abreast of the technological advances in your profession, reflecting the changes in global supply lines for the products you use and keeping you and your practice fully prepared for whatever further changes Brexit may have in store.

With a fixed rate, unsecured loan, all of this may be achieved whilst maintaining the essential cashflow of the business through fixed monthly repayments over a period as short as six months and no longer than 5 years.

Your dental loan may be arranged much faster than you imagined. Once you have decided how much needs to be borrowed and for how long, many lenders are able to deliver a quote within just an hour or so and take a decision on any formal application within a matter of days. Without any further delay, the requested funds are then transferred directly to your practice bank account.

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