27 Oct 2018  •  Practice Management  •  3min read By  • John Clarke

As if by magic – how to secure the finance you need to realise your dreams

Sixteen years ago, while studying medicine at the University of Manchester, Jonathan Westall started working as a magician. This saw him perform at private, corporate and charity functions alongside world-class peers from the legendary Magic Circle. Although magic was his pastime, his initial career focus was medicine, and upon graduation he initially held a variety of medical positions working for NHS Trusts.

But when contemplating what his real passion in life was, Jonathan ultimately decided to focus his career in dentistry, and after completing his foundation training he discovered a long-established dental practice that was available to buy. However, his initial euphoria of finding his dream business quickly vanished when he was given just four weeks to secure a loan to progress the purchase.

Despite approaching over 20 financial lenders for assistance, he was turned away due to his perceived lack of experience and element of risk as a recently qualified dentist. Fortunately, a speculate enquiry to Wesleyan Bank paid dividends as the company was able to provide Jonathan with a six-figure loan to purchase the three-surgery practice in Runcorn, Cheshire with a patient base of over 17,000.

Although Jonathan Westall’s journey into dentistry is uncommon, his frustration at failing to satisfy the rigid lending policies of some financial providers was not. Reassuringly, there are specialist lenders who are prepared to be more flexible and willing to offer tailored solutions on a case-by-case basis. Nevertheless, if like Jonathan you are looking to buy a dental practice, it is imperative that you prepare for two critical steps to secure the necessary funding you need.

Step 1 – Formulate your business plan 

A business plan is a vital part of any purchase. This plan is not only used to support your finance application but will also allow you to check that the dental practice you want to buy is the right business for you. Key considerations include:

  • What are your short, medium and long-term plans for the business?
  • Is the business currently performing at its best? Are there any plans for relocation or extension of the current premises to offer additional treatments?
  • Does the current staffing structure suit your plans?
  • What are your profit and cash flow forecasts for the business? This can be completed by you or a specialist dental accountant. The plans you present should allow for contingency and evidence that you will be able to meet any loan repayments along with any deferred payments you may have agreed with the Seller.
Step 2 – Evidence your cash contribution

ALL funders will require a level of cash from the purchaser. This will be dependent on each individual’s circumstance and it is recommended that you engage with your chosen finance provider as soon as possible to ascertain what is available to you. Some specialist banks can offer loans of up to 80% of a business’s value and are more flexible in accepting smaller, non-traditional forms of cash deposit compared to traditional high street lenders.

From high street banks to specialist lenders, dentists have no shortage of options when considering commercial finance providers but be mindful that there are no tricks when it comes to providing good customer service. Look for a flexible financial partner who specialises in the dental sector who has the experience to ensure that the process of buying a practice is as easy as pulling a rabbit out of a hat.

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