Refinancing and Restructuring Debt

In this webinar, Arun, Nigel and Dan take you through what you need to know about refinancing and restructuring your debts and finance.

Business Loans for Healthcare Businesses

We’ve been helping to fund the future of British healthcare businesses for over 20 years and our team are made up of former bankers with decades of experience in the UK’s healthcare lending sector.

You can find out more about working with Samera and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

For more information on raising finance for your healthcare business, including more articles, videos and webinars check out our Learning Centre here, full of articles and webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Money Saving Tips for Dentists

Running a dental practice is not easy, and it can be expensive. You have to pay for things like equipment, supplies, staff, and rent, which can eat into your profits. But there are ways to save money without compromising patient care. In this article, we will share some tips to help you save money in your dental practice. You can negotiate with suppliers, reduce waste, and make your operations more efficient to cut costs.

When it comes to saving money, dentists walk a tightrope. This is because any minuscule changes you make to your dental practice can have the opposite effect and could hurt your business instead of helping.

With a dental business it is very hard to cut overheads, such as property costs, employee salaries and administrative services. These are things you need to spend on to maintain your dental practice and keep patients coming through the door. That’s what makes saving money on these things very tricky.

As a dentist, you are always committed to your patient’s health and wellbeing. However, as a business owner, you need to earn the necessary profits to sustain and grow your practice. Samera helps dentists all over the UK find the right balance in the inflationary environment we now live in.

In a time where inflation and interest rates are rising, much like many other expenses, shopping around for better deals on everything you need in your practice is a necessity.

However, Samera cuts this need entirely by automatically finding you the best value options from the leading brands in the industry through the Samera Dental Buying Group. Get in touch with Team Samera to see how we can help you save money today, but in the meantime have a read of our tips below.

Click here to read more about how to cut expenses in a small business.

By following these tips, you can run a successful practice while keeping more money for yourself. Whether you have a small practice or a large dental group, keep reading to learn how to save money and improve your profits.

Top Money-Saving Tips for Your Dental Practice – Webinar

First of all, watch this free webinar in which Arun discusses ways in which you can save money in your dental practice, from utility bills to dental equipment and consumables.

Introduction: The importance of saving money in your dental practice

Running a successful dental practice means taking good care of your patients and managing your money well. We know that providing excellent dental care requires investing in equipment, supplies, and staff. But it’s also important to find ways to save money without compromising the quality of service.

By using smart strategies to save money, you can make your practice more profitable, streamline operations, and ensure long-term success. In this blog post, we will give you valuable tips to help you save money in your dental practice. We’ll talk about optimising your supply chain and using cost-effective technology, among other things.

Saving money in your dental practice not only helps your finances but also allows you to invest in things like training your team or improving your practice’s infrastructure. So, let’s get started and learn the best money-saving tips to make your dental practice thrive while keeping your finances in order.

Action Point

Optimize your dental practice’s finances by negotiating for better supply prices, embracing cost-effective technology, and streamlining operations to boost profitability without compromising care quality.

Evaluate your expenses: Identify areas where you can cut costs

To run a successful dental practice, it’s important to manage your finances wisely. One way to increase your profits is by looking at your expenses and finding areas where you can spend less money. This will help you use your resources more effectively.

First, go through your budget and examine each expense. Look at things like supplies, equipment, utilities, and employee salaries. See if there are any costs that seem too high or unnecessary. For example, you might discover that you’re spending too much on certain supplies or paying for services you don’t really need.

Next, think about alternatives or ways to save money for each expense. Can you negotiate better deals with your suppliers? Are there cheaper options for equipment maintenance or repairs? Can you find ways to use less energy and lower your utility bills? These are all things you can consider.

Another area to focus on is your staff’s schedule. By making sure your employees work efficiently and optimising their hours, you can potentially reduce labour costs without compromising patient care. Think about implementing flexible schedules, training your staff to do different tasks, or outsourcing some administrative work.

You can also use technology to make your operations more efficient and save money. Digital record-keeping, online appointment scheduling, and automated reminders can help you cut administrative costs and work more efficiently.

Remember, reducing costs doesn’t mean you have to compromise on quality or the experience you provide to your patients. It’s about finding smarter ways to use your resources without sacrificing the level of care you give. By regularly reviewing your expenses and making strategic changes, you can save money and improve the financial health of your dental practice.

Action Point

To boost your dental practice’s financial health, thoroughly review expenses and identify savings opportunities without compromising care quality. Consider negotiating better supply deals, optimizing staff schedules, and utilizing technology for efficiency. Regular financial evaluations and strategic adjustments can lead to significant savings and enhance profitability.

Negotiate with suppliers: Tips for getting better deals on dental supplies

Negotiating with suppliers is important for your dental practice’s finances. Getting better deals on dental supplies can lower your costs and increase profits. Here are some tips to help you negotiate and get the best deals:

Research prices: Before negotiating, know the market prices for the supplies you need. Compare different suppliers’ prices, quality, and reputation. This knowledge will help you during negotiations.

Build relationships: Having good relationships with suppliers can help you get better deals. Communicate with them regularly, give feedback, and show you’re a loyal customer. Suppliers are more likely to negotiate and offer better prices when they value your partnership.

Bundle purchases: Combine your orders and buy multiple supplies from the same supplier. This gives you more negotiating power. With larger orders, you can ask for bulk discounts, free shipping, or extended payment terms. Suppliers often appreciate long-term, high-volume customers and may give you better deals.

Be ready to walk away: Negotiations involve give-and-take. If the terms don’t meet your goals, be prepared to walk away. This shows you’re serious about getting the best value. It may make suppliers reconsider their offers.

Consider other suppliers: Don’t limit yourself to one supplier. Research and contact multiple suppliers to find better deals. Competition among suppliers works in your favour, as they may offer lower prices or additional benefits to win your business.

Remember, negotiating isn’t about demanding lower prices aggressively. It’s about finding solutions that benefit both parties. By following these tips, you can improve your negotiation skills and save money on dental supplies for your practice.

Action Point

To boost your dental practice’s financial health, thoroughly review expenses and identify savings opportunities without compromising care quality. Consider negotiating better supply deals, optimizing staff schedules, and utilizing technology for efficiency. Regular financial evaluations and strategic adjustments can lead to significant savings and enhance profitability.

Consider group purchasing organisations (GPOs): Exploring the benefits and savings of joining a buying group

When running a dental practice, saving money is important. One way to do that is by joining a group purchasing organisation (GPO).

A GPO negotiates discounts with suppliers for its members, like dental practices. By pooling together the buying power of its members, a GPO can secure big discounts on dental supplies and equipment.

Joining a GPO can save you a lot of money. As a member, you get access to the discounted rates they negotiated, which helps you stretch your budget. This means you can spend more on other important things for your practice.

GPOs also offer a wide range of products from different suppliers, so you have more options at competitive prices. This is especially helpful when buying expensive equipment or specialised materials because the savings from the GPO can be significant.

Another benefit of joining a GPO is that it saves you time negotiating with suppliers. Instead of contacting suppliers one by one, the GPO handles the negotiations for you. This frees up your time to focus on providing good care to your patients.

Not all GPOs are the same, so it’s important to research and compare your options. Look at things like the range of suppliers they work with, the size of their network, and their reputation in the dental industry.

Joining a GPO can be a smart move for your dental practice. It gives you access to cost savings, a variety of products, and makes purchasing easier. By considering the benefits and savings of joining a GPO, you can make informed decisions that will help your dental practice financially.

Action Point

For better deals on dental supplies, research prices, build relationships with suppliers, bundle purchases, be willing to walk away, and consider multiple suppliers.

Join the Samera Alliance Buying Group

The Samera Alliance is our growing network of dentists, practices and leading industry suppliers, designed to help you save money, grow your profits and build a better dental business.

Join today for free to be a part of our dental buying group, which gives you access to exclusive discounts and offers on the consumables, equipment and products you need to run a successful dental business.

You’ll also get better rates and terms for a wide range of services like HR, IT, utilities, insurance, legal services and much more!

Embrace technology: How implementing digital solutions can save you money in the long run

Using technology can be a game-changer for your dental practice. It helps make things easier, saves time, and can even save you money in the long run.

One area where technology can help is in managing your patients. With a cloud-based practice management software, you can store patient records, appointments, and billing information digitally. This means you don’t have to print as much paperwork or spend money on storage. It also saves you time because you don’t have to manually enter data. Plus, these systems can send automated reminders and help with scheduling, which reduces missed appointments and cancellations.

Another way technology saves money is with digital imaging equipment. Traditional X-ray films are expensive and take up space. But digital X-ray systems give you instant, high-quality images without the need for film. You don’t have to buy film or deal with developing and disposing of it. Although the initial cost of digital equipment may seem high, you’ll save money in the long run by not having to buy film or maintain it.

Using telehealth solutions can also help you save money. You can do remote consultations and give advice through video calls or telemedicine software. This means patients don’t have to travel, which saves them money. It also reduces your overhead costs.

Technology can also help with marketing. Having a good website and active social media profiles can attract new patients and strengthen relationships with existing ones. You can also do digital marketing campaigns like targeted emails or online ads to reach your desired audience without spending a lot on advertising.

In conclusion, technology has many benefits for your dental practice, including saving money. By using digital solutions for patient management, investing in digital imaging, embracing telehealth, and using digital marketing, you can improve your practice, take better care of your patients, and increase your profits.

Action Point

Implement digital solutions like practice management software, digital imaging, telehealth, and digital marketing to streamline operations, reduce costs, and improve patient care, ultimately saving money for your dental practice.

Train your staff: Investing in education and training to improve efficiency and reduce expenses

Investing in education and training for your dental staff is important for improving your practice’s efficiency and reducing expenses. When your staff is well-trained, they perform their tasks better and create a positive experience for patients. This can lead to more patients staying with your practice and referring others.

Provide opportunities for ongoing education and training to expand your staff’s knowledge and skills. They can attend conferences, participate in webinars, or take specialised courses. When they stay updated on industry trends, techniques, and technologies, they can provide the best care to your patients.

Training shouldn’t only focus on clinical skills but also administrative tasks. Efficient scheduling, billing, and record-keeping processes can make your practice more productive and profitable. Training your staff on practice management systems or hiring experts to teach them can streamline these processes, reduce mistakes, and save time and resources.

A well-trained team can handle emergencies and unexpected situations effectively, reducing the need for expensive external help. By giving your staff the right knowledge and skills, they can confidently and efficiently handle different scenarios, saving your practice time and money.

Investing in your staff’s professional development can also boost their morale and job satisfaction. This leads to lower turnover rates, as happy employees tend to stay longer. Keeping experienced staff members saves you recruitment and training costs and ensures consistent care for your patients.

Remember, education and training should be ongoing. Encourage your staff to continuously seek learning opportunities and ways to improve. By investing in their growth, you are investing in the success and financial stability of your dental practice.

Action Point

Invest in your dental staff’s education and training to improve practice efficiency and reduce expenses. This not only enhances patient care but also boosts staff morale, leading to lower turnover and recruitment costs, ultimately saving money for the practice.

Click here to read more about building a dental team.

Maintain your equipment: Tips for proper maintenance and avoiding costly repairs or replacements

Taking care of your dental equipment is important for your practice’s smooth operation and saving money. Neglecting equipment maintenance can lead to expensive repairs or replacements. Here are some simple tips to keep your dental equipment in good condition:

Follow the manufacturer’s guidelines: Read and understand the maintenance instructions provided by the manufacturer for each piece of equipment. Clean, lubricate, and calibrate them regularly as recommended.

Create a maintenance schedule: Make a schedule to keep track of when each equipment needs attention. This can include daily, weekly, monthly, or yearly tasks depending on the equipment. Following a schedule helps prevent issues and catch problems early.

Train your staff: Make sure your staff knows how to use and maintain the equipment correctly. Teach them to recognize warning signs of equipment problems. Encourage them to report any issues promptly.

Use quality tools and materials: Invest in good-quality tools and materials for your practice. Cheaper alternatives may save money at first, but they wear out quickly and need frequent replacements. Durable equipment lasts longer and saves money in the long run.

Regular inspections: Check your equipment regularly for signs of wear, tear, or possible problems. Early detection helps prevent major repairs.

Consider professional servicing: Along with regular maintenance, schedule professional servicing for your equipment. Professionals can inspect, clean, and optimise the performance of your dental equipment.

By following these tips and prioritising equipment maintenance, you can avoid expensive repairs or replacements. Your dental practice will operate smoothly and efficiently, saving you money. Remember, prevention is better than cure when it comes to your dental equipment!

Action Point

Maintain your dental equipment regularly to prevent costly repairs or replacements, ensuring your practice operates efficiently. Follow the manufacturer’s guidelines, create a maintenance schedule, train staff, use quality materials, perform regular inspections, and consider professional servicing. Prioritizing equipment maintenance saves money and keeps your practice running smoothly.

Explore financing options: Understanding dental practice loans and other financial resources to help manage expenses

As a dental practice owner, it’s important to manage your expenses well to succeed and make a profit. One way to do this is by exploring different financing options available to dental practitioners.

Dental practice loans are designed specifically for dental professionals like you. They provide funds to cover expenses such as buying equipment, renovating your office, upgrading technology, or even acquiring a practice. With a dental practice loan, you can manage your cash flow and invest in the growth of your practice.

When considering a dental practice loan, research different lenders and compare their terms and interest rates. Look for lenders who specialise in dental practice financing, as they understand the industry better and can offer solutions that suit your needs.

Another option is equipment leasing. Leasing dental equipment helps you save your working capital while still getting access to the latest technology and equipment you need for your practice. Leasing spreads out the cost over time, making it more affordable and manageable for your cash flow.

Besides these financing options, look into other sources of financial assistance. Some dental associations and organisations offer grants or scholarships for dental professionals. These can help with expenses or fund continuing education. Also, there may be government programs or incentives to support dental practices, so stay informed about any financial resources that can benefit your practice.

By exploring these financing options, you can manage your expenses and ensure the financial stability of your dental practice. Carefully evaluate each option, consider your long-term goals, and consult with financial professionals who specialise in dental practice management to make informed decisions for your business’s financial health.

Action Points

Explore financing options for your dental practice, including specialized loans and equipment leasing, to manage expenses and invest in growth. Research lenders, compare terms, and consider additional financial resources like grants or government programs. Consult with financial professionals to make informed decisions for your practice’s financial health.

Please click here to read our guide to financing a dental practice.

Review your insurance policies: Ensuring you have the right coverage at the best rates

It’s important to review your insurance policies to manage the financial health of your dental practice. Dental practices have unique risks and liabilities that require special coverage, so it’s crucial to make sure you have the right policies in place to protect your practice and patients.

Start by looking at your current insurance coverage. Check your general liability insurance, malpractice insurance, property insurance, and workers’ compensation insurance, among others. Understand what risks are covered and what may be missing by reviewing the terms, limits, and exclusions of each policy.

Get quotes from different insurance providers or brokers for the same coverage. Comparing rates from multiple insurers helps you find the best rates without compromising on the coverage you need. Ask about any discounts or customised packages available for dental practices.

As you review your insurance policies, consider any changes in your practice’s operations or services. If you’ve added new procedures, expanded your office space, or hired more staff, you may need to adjust your insurance coverage. Keeping your policies up to date ensures you have enough protection.

Consider working with an insurance professional who specialises in dental practices. They can provide valuable advice on the specific risks and coverage options for your industry. Their expertise helps you understand complex policy terms and make sure you have adequate protection at the best rates.

Remember, insurance is an investment in the long-term financial stability of your dental practice. Regularly reviewing your policies and getting the right coverage at the best rates helps protect your practice from unexpected events and can save you a lot of money.

Action Point

Review your dental practice’s insurance policies regularly to ensure you have comprehensive coverage tailored to your unique needs. Compare quotes, adjust policies for any changes in operations, and consult with specialists. Proper insurance safeguards your practice’s financial health.

House brands vs name brands

House brands are a great alternative for some more expensive name brand products. If you do your research correctly, most types of dental consumables have the same, if not very similar, ingredients and often most are manufactured by the same companies. The biggest difference is the price point. However, this is not the case with all house brands, the cheapest brand is not always the least expensive.

Branded PriceOwn BrandPrice
4% 1:100,000 2.2ML LATEX-FREE£26.75BARTINEST 1:100,000 2.2ML ANAESTHETIC£22.96
ALCOHOL FREE JUMBO WIPES REFILL£8.50UNODENT ALCOHOL-FREE WIPES£2.86
BRUSH REFILL REGULAR ASSORTED£30.24MICRO APPLICATOR BRUSH REGULAR – MIXED£4.40
UNIVERSAL SPRAY (NO NOZZLE)£23.00UNOLUBE UNIVERSAL SPRAY£4.27
Aspirator Cleaner £28.99AUTORINSE DAILY ASPIRATOR CLEANER£12.64

Sometimes the price of some things you need matches the hefty price attached to it. Buying cheaper branded items when it comes to non-critical items such as disposable barriers and cotton rolls is a good way to save money. Those products will make very little difference to you or your patients. However, when it comes to anything that is a bit more valuable and you are debating it over, it’s worth weighing up the pros and cons. Does the price justify the usage of the product? When it comes to anything that will aid you in diagnosing, treating or restoring, save yourself the trouble and opt for a more reliable brand to buy from.

If you join a dental buying group you can still purchase these more expensive items at an exclusive, more competitive price – just for being part of the group!

Loyalty rewards: Get rewarded for your business!

Many companies offer rewards or loyalty programs, so pay attention to what is out there for you to benefit from. Company representatives often know all the tricks, so sometimes it’s worth talking to them so they can teach you how to order more effectively. Sometimes you can take advantage of special programmes and free products or loyalty awards that many distributors offer.

Keep in mind that none of this will happen automatically, you will need to take the time to find how to get the most out of what is available.

Action Point

Maximize savings by utilizing loyalty rewards and programs offered by suppliers. Engage with company representatives to learn effective ordering strategies and take advantage of special offers, free products, or loyalty awards. A proactive effort is required to benefit from these opportunities.

Understanding the dangers of ‘false economy’

The truth is, the steps you take in starting to save money can actually become an expensive venture. A great example of this is that perhaps it is a lot cheaper for you to have an automatic answering machine for your calls, rather than employing a full-time receptionist. However, if you consider patient experience, your reception is often the first point of contact with your business.

In other words, a good receptionist with excellent customer service skills is worth every penny you invest in them, even though they may not be the cheapest option.

This is very similar to dental equipment. While buying cheaper consumables that have similar ingredients and manufacturers may be worth buying, looking at the cheapest price of dental equipment may not tell the same story.

We hope our blog post about saving money in your dental practice was useful to you. Running a dental practice can be costly, but there are ways to save money without sacrificing care quality. By following the tips we mentioned, like talking to suppliers, managing your inventory well, and getting the most from your insurance reimbursements, you can save a lot of money and make your practice more profitable. Remember, every pound you save can be used to improve your practice or provide better care to your patients.

Action Point

Recognize the importance of value over cost. Opting for cheaper alternatives, like an automated answering service, may save money initially but can negatively impact patient experience. Similarly, while inexpensive dental consumables might seem appealing, investing in quality equipment ensures better service and long-term savings. Prioritize investments that enhance patient satisfaction and practice efficiency.

Business Loans for Dentists

We’ve been helping to fund the future of the UK’s dentists for 20 years and our team are made up of former bankers with decades of experience and contacts in the UK’s healthcare lending sector.

You can find out more about working with Samera Finance and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

Dental Practice Finance: Further Information

For more information on raising finance for your dental practice, including more articles, videos and webinars check out our Learning Centre here, full of articles an webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

A Guide to Inheritance Tax

The inheritance tax nil rate band has been frozen at its current level of £325,000 since 6th April 2009. The nil rate band is the amount of your estate that is exempt from inheritance tax. 

It will remain at its current level of £325,000 until 5th April 2026 – a 17-year freeze! However, since 6th April 2017, a new additional nil rate band has been available for the ‘family home’.

Click here to read our guide on income tax and National Insurance.

Generally speaking, effective inheritance tax planning should be carried out on a long-term basis. However, it is worth remembering the following points, which should be considered on an annual basis. 

Annual exemption

The first £3,000 of gifts made by any individual during each tax year is completely exempt for inheritance tax. In addition to this, if the previous year’s annual exemption was not fully utilised, it can be carried forward into the following (current) tax year.

This means, in one tax year you are able to have up to £6000 of gifts that will be exempt from any tax only if you have not made any gifts during the previous tax year.

This exemption is specific to a per person basis, so married couples can also make gifts of £3,000 each.

Small Gifts Exemption

Gifts of up to £250 per tax year made to any one individual are also exempt from any inheritance tax and do not count towards the annual exemption. These types of small gifts are an exemption for you as you can make as many of these gifts as you like to different people.

However, the annual exemption cannot be used for further gifts to the same recipient in the same tax year. 

Habitual Gifts Out of Income

Habitual gifts out of income are an exemption from inheritance tax, in order for these gifts to be classed as ‘habitual’, they need to be made consistently for a number of years. Which is why it is important to remember to keep these up every tax year. 

The Family Home

An additional nil rate band is available for the ‘family home’ for any deaths occurring after 6 April 2017. This exemption is only available on a property which has been the deceased residence at some point during their life. If the deceased has passed while owning more than one or multiple qualifying properties, the personal electives can elect which property this exemption should apply to.

The exemption is only applied once the property is passed. This is usually done to a direct descendant of the deceased and in this case, any stepchildren, foster children or adopted children are all accorded the same status as one another for this sole purpose.

Similar to the £325,000 nil rate band, any unused proportion of the exemption will pass to the deceased’s partner or spouse.

When a person downsizes or ceases to own a home after 8 July 2015, the residence nil rate band is available to them as well as assets of an equivalent value, up to the value of the additional nil-rate band, are passed to direct descendants.

The residence nil-rate band that was introduced in 2017/18 and increased from £100,000 to its current value to £175,000. This level is set to remain until 5 April 2026.

Click here to read more about inheritance tax.

Inheritance Tax: Example

Margaret divorced her husband many years before her death in June 2021.

She leaves her estate, worth £600,000, to her daughter.

Margaret’s estate includes her former home, which is worth £250,000 at the time of her death. The residence nil rate band available for 2021/22 exempts £175,000 of the value of Margaret’s former home. This reduces her taxable estate to £425,000 before deduction of her main nil rate band of £325,000, which reduces it to £100,000.

The IHT payable on Margaret’s estate at 40% is thus £40,000. The residence nil rate band is withdrawn from estates worth in excess of £2 million (this threshold is also frozen until 5th April 2026).

This withdrawal is at the rate of £1 for every £2 by which the estate exceeds £2 million. Any mortgages or other loans secured over a property will have to be taken into account when allocating the exemption. For example, where the deceased held a property worth £250,000 which was subject to a mortgage of £180,000, the exemption will be limited to just £70,000.

Further Information on Accounts & Tax

Our team of specialist accountants and tax experts can help manage, process and structure your business’s finances. From management accounts and payroll & pensions to tax planning and cash flow management, we can take care of the full back-office function of your business.

Book a free, no-obligation consultation with one of the team to find out how we can make your accounts & tax easier, quicker and cheaper.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

How to Finance a Dental Practice

As you buy or start your dental practice and as a dental practice grows, there is likely to come a time when significant additional funding is required in order to scale further. This funding may be needed to purchase new equipment, to extend a current practice, or to buy more dental practices and build a group.

While routine services like cleanings and fillings are always in demand, cosmetic dentistry is also widely getting more popular. As demand grows, so does the annual salary for a dentist. Although dentistry in the UK took a hit in 2020-21 (due to the lockdowns), the industry is expected to bounce back strongly.

Now is the time to build a dental business.

Buying or starting a dental practice is one of the biggest decisions that a dentist is likely to make and can be a stressful time for all parties involved. The various aspects involved, from creating a great business plan to determining the prime location, as well as many other legal and personal factors, must be carefully taken into consideration before taking the plunge. 

There are several rewards and stresses that are associated with building a dental practice, depending on whether you want to go down the private route, the NHS route or a mixture of both. This is why we are here to lessen any burdens on you when it comes to financing a dental practice. 

Click here to read more about why dentists want to own their own practices.

One of the most important skills in your personal and business life is learning how to manage your finances. If you can manage this skill well, you will then be on the path to obtaining the finance and business loans you need to build a dental business.

When you are seeking a loan to buy, start or grow a dental practice, banks and lenders will look at your personal finance history to help them ascertain whether you will be a secure and reliable client that can repay the loan.

If you do not currently own a dental practice, your personal circumstances are one of the information sources that lenders will have to assess your ability to manage a dental practice when you acquire one. They will also look at your CV and whether you have undertaken any roles in your current dental practice to gain skills such as management of staff, accounting or involvement with premises issues and the CQC.

Up to this point in your life, managing finances has been just for you and your family, with little scrutiny from others.

To get the finance and business loans required to buy, start or grow a dental practice will require some effort to convince a lender you are worthy of the finance.

Action Plan

  • Evaluate the need for additional funding to scale your dental practice, considering new equipment purchases, extensions, or acquiring more practices.
  • Recognize the increasing demand for cosmetic dentistry and its impact on the dental industry’s growth potential.
  • Approach the decision to buy or start a dental practice with thorough planning, considering business plans, location, legal factors, and personal readiness.
  • Understand the various challenges and rewards associated with different dental practice models, such as private, NHS, or mixed.
  • Develop strong financial management skills as a foundational element for securing loans and financing for your dental practice.
  • Prepare to present a comprehensive profile to lenders, including personal financial history, professional experience, and potential for practice management, to secure the necessary funding for growth or establishment.

Watch this webinar on how to raise finance for your dental practice.

Click here to read our 11 top financial tips for associate dentists.

Contact us to find out more

How Do You Get a Business Loan For a Dental Practice?

There are a number of banks and lenders out there looking to help you buy, start or grow your dental practice. They all have their own policies and limitations as to whom and how much they will lend.

Most lend on an unsecured basis up to a certain level and, therefore, will want to be sure that you have the skills and the financial ability to repay them when you take out a loan for your business.

When you approach lenders for finance they will want to see a breakdown of your current personal assets and liabilities and how you currently spend your income.

They will review how much you have been able to save, and if you have not saved, they will ask where the money has gone. They will also be looking to see if you have invested in property or other assets.

This is a detailed examination of your income and expenditure and will need to be supported by the provision of bank statements verifying what you have put down as your income and expenditure.

Your bank statements also show how you have conducted your bank account. Many lenders ask for six month’s bank statements to see your income as a Dental Associate.

They also look at how you control your funds, and whether you overdraw your account on a regular basis. In addition, they will also want to see three years of associate accounts again to verify your historical income.

Most of the lending for the first purchase of a practice is unsecured, so understandably lenders want to be sure you have a sound financial background and can control your own finances. They want to see a good degree of financial sense and control which will be needed to manage your own dental practice.

If you have a good credit score, experience in dentistry and a well-prepared application, you should have little trouble obtaining a business loan for your dental practice.

Click here to find out more about making sure your loan application is successful.

Applying for Finance for a Dental Practice

Remember that if you’re buying a practice, it’s not necessary to have a particular practice in mind when applying for funding. As long as there is a plan in place.

You can read more about creating a business plan for a dental practice here.

Every dental professional has a different story when it comes to setting up a dental surgery. Take a look at our unconventional story, for instance. Whatever the story is, it’s important to go about securing finance in the right manner.

Options for funding a dental practice

From experience, there are three main options when it comes to acquiring funds to buy a dental surgery; one of which is the most common.

  • Loans from banks and other financial institutions. This is the most common option.
  • Bank of mum and dad. In certain families this may be an option, and repayment arrangements are likely to be more flexible.
  • Self-funding. Some dental professionals have the resources to do this. However, it’s not always a good idea to invest the majority of savings as any business comes with some inherent risk attached. Having substantial personal financing in place helps with maintaining a comfortable lifestyle during any lean periods for the practice.

From working with clients over the years, we realise that most often a lending institution will need to be approached. If this is the case, there are certain factors to consider when deciding on the best time to apply for a loan.

Action Point

  • Research various banks and lenders to understand their specific lending policies and the amounts they are willing to lend to dental practices.
  • Prepare to demonstrate your financial capability and professional skills to assure lenders of your ability to repay the business loan.
  • Compile a detailed breakdown of your personal assets, liabilities, and income expenditure for lender review, supported by bank statements and other financial documents.
  • Maintain a good financial record, including savings, investments, and prudent management of your bank account, to present yourself as a reliable borrower.
  • Consider the three common funding options for acquiring a dental practice: bank loans, family support, or self-funding, each with its own set of implications and requirements.
  • Evaluate the optimal timing for loan application, ensuring you have a solid plan in place, regardless of whether you have a specific practice in mind for purchase.

Contact us to find out more

When to apply for a business loan for a dental practice.

Competition for lending is high, so it’s important to have the best opportunity of being in the successful percentile. With this in mind, here is what we would advise.

  • Prepare for lending more than 12 months in advance as banks will scrutinise documentation for the previous 6-12 months, and take note of any issues.
  • Make sure that everything is in order and that good financial acumen is apparent.
  • Have a history of making payments on time and a strong credit score.
  • Know what the business aspirations are and whether practice purchase or start-up is the aim.
  • Have a team of professionals in place. At the very least, this should include a dental accountant, dental solicitor, and a financial planner for life insurance and disability insurance.
  • Hire a commercial finance broker, such as Samera Finance that can help you secure funding on the best terms available.
  • Understand the difference between lending. Some banks will offer a conventional loan while others will offer a loan which is specifically aimed at start-ups and small businesses

Make sure that all of this is in place before applying for funding from a lender.

Click here to learn more about applying for loans after COVID-19.

Approaching a lender for the first time

Remember that although lenders are there for the same overall purpose, they all have slightly different policies and processes in place. Some have a specialist team in place to deal with business loan applications, others do not.

It helps to do research when raising finance for a dental practice, and find out as much about the lender as possible. That’s where a commercial finance broker who knows dentistry is worth their weight in gold, as they know which lenders are most suitable for which clients.

Whichever lender is chosen, they will want to know that they are providing finance to a reputable borrower and that they can rely on the money being repaid as agreed. With this in mind, any professional who is looking to invest in a dental surgery should be prepared to prove their financial reliability when they visit a lender. This is likely to include:

  • Proving comprehensive bank statements for at least six months (professional and personal).
  • Providing associate accounts for at least three years, to verify income.
  • Providing evidence of regular saving.
  • If there is no regular saving pattern, there should be proof of what earnings were spent on. This could include professional expenses, or home improvements. It’s important to be able to show wise spending choices.

It makes sense that banks, and other lenders, want to verify that borrowers are a good risk. These loans are usually unsecured; so they want to be as sure as they can that they will get the money back.

When speaking to clients about their lending situation, we always stress how important it is to be able to show that they are proficient at managing money, and ideally have significant savings or investments.

Please click here to learn more about why your loan application might have been denied.

Do you need to provide security for a business loan for a dental practice?

What will financial lenders assess?

Getting qualified for a loan can be a daunting experience. The process itself is non-binding because the information you provide has not been verified. 

Any dental professional who is looking to finance the purchase of a dental practice usually needs to have a deposit of at least 10%. When approaching a lender for the rest of the money, there are certain factors they will consider when making their decision.

  • The history of any earnings as an associate dentist.
  • Management of personal finances.
  • Living situation of the applicant. Is the accommodation rented or owned?
  • Career in dentistry and level of management experience.
  • Ability to repay any loan that is provided.
  • Any personal savings that are in place. Showing a propensity to save rather than make rash purchases is an indication of being low risk for lending.
  • Evidence that tax payments are up to date.
  • The personality and character of the applicant.

Contact us to find out more

Lenders look for a few key aspects of your application in order to confirm whether you are a worthy lender. These aspects include: 

Credit

Credit history and activity have a major impact on loan approvals and will heavily influence whether you get approved or not. It is also important to know that the lowest rates available are usually only obtainable by borrowers with high credit scores.

Lenders use your credit scores to assess the reliability of you as a borrower. It will help them assess the risk being taken when providing you with financing. 

In addition to looking at your credit score as an indicator, they often review your payment history which they consider to be a strong indicator of the likelihood that you will make timely repayments in the future.

Debt 

Lenders often use a debt-to-income ratio that compares the amount you earn to the amount to owe. This is to ensure that you will not be over extended with your new loan repayment. Debt-to-loan limits vary depending on what type of financing you need and the type of lender you go to. 

Click here to read more about dealing with debt as a dentist.

Income

In order to apply for a loan your lender will need to review your income, the same can also be said for your employment history for most types of financing that you will apply for. Not having steady work or a steady source of income for the last two years could impact your eligibility for getting approved for financing for your dental practice. 

Lenders will often call your current employers and verify your salary. If you are self-employed, lenders will look at the adjusted gross income on your tax return to assess if your business is making any profit. 

Assets

Depending on what type of financing you need for your dental practice, you may need to secure your loan with assets to put up as collateral in case you default on any repayment on your loan. 

Do banks lend only on projections?

Contact us to find out more

What banks are looking for in a dentist

Unless you are being represented by a business advisor, or a professional who is qualified in dental practice transactions, you will be expected to provide the following:

  • Details about your assets liabilities, personal Income and expenditures over the last three years or SA302s – and the appropriate documentation
  • They might also ask for details of hours you’ve worked, list of services provided, or even your earning history as an Associate Dentist
  • Your personal financial track record will also come into play: how you’ve managed your finances, high credit card bills, low credit score, etc)
  • Your current living situation i.e. do you own your own house or rent

Preparing to apply for a business loan

It stands to reason that any bank, or other financial institution, wants to reduce the risk of non-payment. For this reason, they look to lend to businesses that can prove they have reliable revenue and are in a position to make repayments on time.

It’s worth bearing this in mind when making decisions to grow a dental practice. Planning ahead is essential. Ideally, plan 10-12 months ahead of time, and make sure that revenue is optimised and accounts are up to date and accurate, before applying for funding. When funding is applied for, be prepared to provide a significant amount of documentation including:

  • An up-to-date business plan.
  • Up-to-date and accurate accounts (personal and business).
  • Up-to-date tax records.
  • Details of expenditure.
  • Detailed analysis of proposed finance spending and growth of the practice.

Having everything in one place before applying for growth or acquisition funding makes a successful outcome more likely. 

Show a good sense of financial control

Banks and lenders will want to see that you have demonstrated a good sense of financial control before they offer you a loan. Having some savings for a deposit, or an investment property and investment in your professional skills provides a level of comfort to banks.

This along with a well-run and controlled bank account all start to build a picture for lenders to enable them to consider your request for a loan and leads to a good credit score.

Don’t buy a new Jaguar annually!

So, buying a new Jaguar every year, running up large credit card debts and showing a large surplus of income over expenditure with no visible savings is not the way to go. If you constantly overdraw your account with no overdraft limit in place this indicates no control of your spending.

Having a bank overdraft limit in place is not a bad thing, it demonstrates the ability to plan and foresee pinch points in your finances and the financial skill to deal with this in advance.

This is not to say you cannot buy a nice car and have good holidays and send your children to private school. It just all must be managed in the correct way.

Avoid Credit Card Funding

Professional courses and school fees should not be funded on a credit card, banks like to see that you have used appropriate loan facilities to fund such activity indicating to them your financial acumen.

If surplus income has been spent on something considered good such as further professional qualifications/property investment, make sure you highlight this to the lenders as this is not always clear from bank statements where it may merely show a loan payment.

Planning for Tax Liabilities

It is important you keep up to date on all your tax payments too. When applying for financing for your dental practice purchase, they will always ask for confirmation that your tax payments are up to date, or you have made sufficient provision for them.

Click here to read more about accounts and tax for dentists.

Bearing all of these points in mind, we would say that the most important thing is living within your means. This does not mean that going on great holidays, buying a luxury car and paying for private tuition for children are all no-go areas.

It means that there should be a balance between spending and saving. Banks need to see sensible financial behaviour, sensible use of credit and wise investment of money.

Always question outside reports and accounts

Sometimes, accounts can be misleading (i.e valuations, investment profits). Without the proper context, the avalanche of reports you will review while buying your dental practice will be enormous, it will be easy to lose focus. Things may be hiding in your accounts might no longer be necessary. On occasions we have even seen costs included that are relevant to another practice entirely!

It is always important to trust the reports you receive, but verify them. Although it would be lovely if we could trust every document that is handed to us, people make mistakes. It is our job to catch these slight missteps before they cause any problems.

Honesty is essential

When you own a practice, you need to be good at many things – other than dentistry. You may need to deal with complaints, sickness, CQC, Health and Safety, debtors, invoicing, marketing and all of the other trappings of owning and operating your own successful dental practice.

Ask yourself – and be honest – do you have the skills to manage these tasks? Be straightforward with yourself about your skills as well as your limitations, and you will go far as a private dental practitioner. Also, this will give you a good idea of the kind of staff requirements that you will need moving forward to fill in the gaps. These figures will also factor into your loan application.

Action Points

  • Prepare early for loan applications, ideally more than 12 months in advance, to ensure all financial documentation reflects stability and reliability.
  • Maintain good financial health by making timely payments, saving regularly, and having a strong credit score to increase loan approval chances.
  • Assemble a professional team including a dental accountant, solicitor, and financial planner to enhance your loan application’s credibility.
  • Consider hiring a commercial finance broker with dental industry expertise to navigate the loan process and secure favorable terms.
  • Understand the nuances of different lending options, from conventional bank loans to specialized start-up and small business loans, to choose the best fit for your practice’s needs.
  • Approach lenders with comprehensive financial documentation, including bank statements, associate accounts, and evidence of responsible spending, to demonstrate your financial acumen and reliability.
  • Plan for tax liabilities and ensure all tax payments are up-to-date or adequately provisioned for, as this will be a critical factor in loan evaluations.
  • Live within your means, balancing spending and saving to present yourself as a low-risk borrower with sensible financial behavior to potential lenders.

Contact us to find out more

Plan for applying for finance in 5 Steps

It may be a cliché, but it’s true that you need to live within your means. A quote from Charles Dickens – Mr Micawber

Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

Mr Micawber

Step 1: Review your personal income and expenditure

The first step is to review your personal income and expenditure – look at it from an outside perspective, and consider what would others think when looking at your expenditure.

Would an outsider consider the £2000 per month you put aside for holidays excessive or just right?

The loan repayment figure you are showing at £1200 per month what does it relate to?

Make sure that you have a breakdown of your debt repayment schedule, showing all your payments, what they are for and who they are going to. Is it all a car loan or made up of some car loan and some professional qualification costs?

Click here to download a free debt structure template.

Step 2: Obtain your Bank statements and look at your account conduct

The second step is to obtain your bank statements and look at your bank account conduct. Do you stay in credit or within the overdraft limit? Are there any times when your finances get really stretched and if so, can you do anything about this?

Step 3: Obtain your Credit Score

Thirdly, obtain your credit score for free and make sure that it is correct. Check there is nothing on there you were not aware of, as credit scoring companies do often make mistakes. If you use multiple credit cards consider reducing the number of cards as having many credit cards can lower your credit score.

Step 4: Consider your partner’s financial background

Make sure your partner’s financial health is strong too. If borrowing in joint names you will both have an examination of your financial status.

Step 5: Use an experienced Commercial Finance Broker

Utilise the skills of an experienced commercial finance broker such as Samera to help you raise the finance. Our team are experts in helping dentists get finance and business loans for their practice acquisition.
Our specialist finance brokers will be able to guide you through the process to ensure you put in the strongest application to the banks and lenders to obtain the best available deals on the market.

Our finance brokerage team can advise you at every stage of your application to ensure you understand the process and don’t fall into the many potential pitfalls when raising finance for your dental practice purchase.

You can find out more about our commercial financial broker services here.

The Importance of a Business Plan

Opening up your own dental clinic is an exciting aspiration and starting up a successful dental practice from scratch is a very possible business endeavour. However, it requires an important set of skills that unfortunately not everyone has. We will guide you through all the stages that you need to go through to enable you to open a successful dental practice.

Click here to read our guide to starting a dental practice.

There is a substantial difference between buying an existing practice and starting your own practice from scratch. Call us for a free consultation and we will guide you through the pros and cons that come with starting or buying your own dental practice. 

Click here to read our guide to buying a dental practice.

When starting your own practice there are many different aspects that you need to consider that will substantially affect your business. These include the location of your business, the type of services you offer and how to attract patients who may already have their own local dentist, amongst a whole range of other considerations you will have to think about.

Contact us to find out more

The most crucial aspect of your entire endeavour of starting your own dental practice is the planning stage, which entails writing a thorough business plan.

Every owner envisions opening a successful dental practice, but you need an actionable plan to get you there, which often includes needing to apply for additional funding. This is where your business plan comes into play. You need to create your vision on paper by describing your business, goals and by addressing all your finances.

More often than not, once you open your practice, your payroll will most likely be your biggest expense. So it would be a good idea to not bring on too many people at the beginning. In addition, you should start with a few basic services and treatments to keep costs low until you gain a bigger customer base.

Financial planning especially for the first year is needed in your business plan to show that you can account for projections of the coming years as well as the profits and losses that may occur. 

Click here to read more about creating a business plan.

Applying for a business loan to buy a dental practice

When raising finance to buy a dental practice, you’ll be taking out an acquisition loan. The value of the dental practice you’re buying and, therefore, the price, will depend on several factors. The most notable of them is EBITDA.

It is important to understand what EBITDA is before buying a dental practice. EBITDA is a calculation that professionals use in order to get a clear picture of the “true profit” of their dental practice.

Essentially, EDITDA is: Earnings before Interest, Tax, Depreciation and Amortization. From the profit and loss account: you take the net profit figure (before tax and interest costs), and add back depreciation and any debt interest repayments.

Be very careful not to be misleading when presenting your sales figures. EBITDA has been calculated by adding on items that you will still have to pay – we often see subscriptions, travel, repairs and renewals added back on (they will still be a cost to you going forward). Doing this will inflate the EBITDA, which will jeopardize your loan.

You can find out more about valuing a dental practice here.

Your financial standing is measured at a particular moment in time, the moment you are applying for a loan. Banks will look at your position now and scrutinise your situation over the previous 6-12 months.

You cannot change your lifestyle in a week and you cannot change what is showing on your credit history or bank statements, so you need to prepare and plan ahead.

Before you apply for the loan, it is imperative you have your house in order and show good management and financial acumen. This will improve the likelihood of you obtaining a competitive loan for your dental practice acquisition.

So, make sure you follow the steps outlined above!

Click here to read more about how much you can raise.

How much deposit will you need to buy a dental practice?

Financial lenders for dentists will usually lend Private, NHS or mixed practices 70% to 80% of the value of the “good will money”. However, it is possible to borrow up to 95% of the value.

But usually you must offer some additional collateral in order to perform the transaction, such as a buy-to-let property or your existing residential home.

However, the banks will also take into account the practice’s EBITDA to repay the loan, and cover any additional costs as well as providing the required standard of living adjustments.

3 important points when raising finance to buy a dental practice

  1. Review your finances early on, not when you want to purchase a practice. Ensure that you look at these critically and obtain an outside view, if possible, our team perform this at no charge.
  2. Make sure you are in financial control, provide explanations for existing debts and any large expenditure items. Make sure your CV is up to date and it includes all your professional skills, as this will be read by bankers, not dentists, so make sure you explain any technical phrases.
  3. Make sure all forms are completed fully as lenders check bank statements, accounts and business loans with credit reference agencies. So make sure everything is disclosed as this will ease the process and remove the need for further questions and explanations.

If you follow the points detailed above, you will find it much easier to raise finance and business loans to buy a dental practice.

Improving your new dental practice

The interior design and equipment changes to your dental practice can be done over a period of months or years. These upgrades must be accounted for in your financial analysis and taken into consideration for many of your profit goals – as this process may disturb your production if not handled correctly.

If, at the outset of your purchase, you know that important equipment must be changed – you should also factor this number into your purchase price. Most sellers are very conscious that they’re practice may need a “face-lift” after years of dedicated service. It’s expected – so don’t be afraid to use this as a point of negotiation.

Applying for a business loan to start a dental practice

Starting a dental practice from scratch means financing a whole range of things you wouldn’t necessarily need to when you purchase an existing practice. Since you’re not buying a ready-made business, you’ll need to build it yourself from scratch. This means funding:

  • Equipment
  • Consumables
  • Staff
  • Premises
  • Inventory
  • Marketing
  • IT
  • Tax

Many young dentists are hoping to start-up a squat practice. You can read our guide to starting a dental practice in 13 steps here.

You will need to prepare a business plan showing the area’s demand for the practice in covering: competition, other local services, hours of opening and provision of services, and other details.

You will also be asked to offer projections of 3 years of income and/or expenditures in a profit and loss format as well as cashflow planning.

Dentists who don’t enlist the help of a qualified business advisor may initially only work in their new practice one to three days per week with a full time receptionist or hygienist. You should factor in the work you will need to do outside of your practice in order to fill in the wage gap – and plan for it.

The price of developing building plans and renting equipment also need to be analyzed before lenders will review your application.

Our team of experienced dental practice accountants can prepare all of the necessary projections for you, and assist with your business planning.

Click here to listen to our podcast episode on how to organise your dental practice finances.

Contact us to find out more

Location

Picking the best location for you may take some time. Location is key for many businesses, but especially for dentists, you want a location that is generally quite visible for your potential patients, centrally located and in an area that your target market would be in. 

There will always be a prime location for your business that may just be out of your price range. It is okay to understand that price matters and will play a vital role in the location you choose.

In the larger sense, it is better to wait for the right location as it heavily impacts how much business your practice will get. It will be much better for you, in the long run, to wait for the best location suited to you to come around rather than to open your business sooner in a more remote location. 

Click here to find out more about raising finance for property development.

After finding a location

Here are the specific steps you need to take before physically setting up shop. 

  1. Find a location that you want to work in
  2. Find a property within said location that can be converted or one that already has Class E planning permission
  3. Ensure the lease you have is for 15 years within the Landlord and Tenant Act or if freehold, a valuation will be required in due course
  4. Draw a plan of the premises and obtain a quote for the refurbishment
  5. Prepare at least 3 years of projections. This should preferably be done by an accountant and should include cashflow and profit and loss
  6. Prepare a thorough business plan
  7. Lastly, you need to obtain the finance you need to make your business plan a reality

At what rates will banks lend for squat practices?

Lenders will look to assist with finance up to 70% of the build and equipment costs subject to a cap on the maximum loan. They will want to see only one surgery completed fully in a single-handed practice and staff costs kept to a minimum with perhaps a nurse and receptionist at first to keep costs under control.

When reviewing your projections, they will want to see these in a standardised format and they do expect to see losses in the first few months. Be realistic, as lenders will expect you to be.

How much does it cost to start a dental practice?

We can’t give you a specific quote on how much it will cost because in truth, it depends on various factors. These include:

  • The location of your site
  • The building you’re going to need to acquire for the practice
  • What type of equipment you’re going to be putting into the practice
  • How many surgeries you are going to be putting into the practice as well as waiting rooms
  • How much the building work is going to cost

So, the cost will vary and differ greatly between any two circumstances. You can easily spend anything from £100,000 to £500,000 and quite easily maybe even more in some cases.

But you need to make sure that you have a budget and a business plan that will forecast future trajectories. These forecasts will help you to make an efficient plan to repay all the money you’re going to need to start up your own dental clinic. 

The most important thing you need to do before you even start preparing for building work is planning and budgeting for how much it is going to cost. 

Click here to watch our webinar on financing your first dental practice.

Equipment selection for a start-up dental practice

There are many suppliers of dental equipment and whilst you maybe excited about your new venture it’s important you get the balance right. Purchase what you may need, and then perhaps once things are running well, you can purchase some of the extra’s you may desire!

Through the Samera Alliance, our Dental Buying Group, we can help you find excellent equipment on great terms.  So make sure when starting out, you join the Samera Alliance if you want the right advice at the right price.

How long the dental practice start-up process takes (really).

In short: establishing your new dental practice can take several months (in some cases up to 8) so it is imperative for you to remain patient.
This timeframe includes the completion of the following tasks:

  • Your due diligence period, where you will review the premises and then obtain the appropriate planning permissions – which generally takes a couple of weeks.
  • CQC approval must also be acquired in order to being operations once the transaction is completed
  • Lenders will take 2-3 days to give you an outline of what they will lend. 5-8 days after you provide them with the requested information, they will usually give you a full credit backed offer.
  • A thorough dental practice valuation.

Click here for more articles and webinars on starting a dental practice.

Applying for a finance to run or grow a dental practice

Without a doubt, the costs of running a dental practice, or any type of medical practice, has been on the rise in the last several years. Usually, with many businesses, if the cost of the product or service rises, that will then translate onto the customer to make up that extra cost.

Unfortunately this does not always apply in medical healthcare practices. Dental practices experience many extra costs that other businesses do not necessarily have to invest in, such as capital equipment that can often be very expensive. 

This may come as a surprise to some but there are many dentists that are happy to go through their entire career as an associate dentist without the aspiration to buy or start-up their own dental practice. However, with the rise of the pandemic and the consequences that many dental associates have experienced as a result, there are now many dental associates realising that there are so many benefits to opening their own private practice ,without the NHS contracts weighing them down. 

Being your own boss and working for yourself can be incredibly hard and it comes with a lot of challenges that you may have never even anticipated. After being in the game for over 20 years, Samera has got you covered. We have a few costs you need to anticipate that are often forgotten about or overlooked when people decide to start their own dental practice. 

Click here to find out more about secondary sources of finance.

Staff Costs in a Dental Practice

One of the main costs many do not consider are the staffing costs. Most dental practices will feature different types of specialist dentists, often including an orthodontist who can typically earn between £60,000 – ££80,000 per year. In order to grow clientele you may also want to employ a separate hygienist, who will also retain a high-earning salary. 

Although you may be aware of the costs of each of the dentists you may be employing, it is also very important to factor in any other staff members you will need. Each dentist will usually require at least one assistant – this will be highly dependent on how many dentists you have working in your practice. A receptionist will also be necessary and depending on the size of your practice, you may have to hire two receptionists.

Staffing costs themselves are a huge cost for any practice, however, what you need to take into account is that when your practice becomes more successful, your staffing costs will rise as a result. It is especially important that these costs are accounted for and managed properly when you are starting out.

Click here to read more about retaining a great team.

Finance costs

Finance costs need to be controlled and reviewed to ensure that you are getting the best deal on the market. Some lenders charge 3.75% above base rate, while others may charge 2.5% above base rate. It is important to shop around the market to see these differences, as the difference between these percentages over the course of even one year can be substantial.

If you have started a squat practice, costs may be even higher. However, once established, these costs can be reduced by a well thought out refinancing package. 

Click here to find out more about refinancing your loans.

Managing cash flow 

Buying equipment is a huge strain on many dental practices and sometimes buying the necessary equipment out of cash flow (or working capital) may seem to be saving on any long-term loans or interest. However, buying these things straight from your cash flow can create a big strain on the cash available to the business. 

Should anything unfortunate happen (e.g. Covid-19) you need to ensure that your business has the necessary reserves to save itself. Always consider whether to buy with cash or finance over the longer term. There are many financing options available to you should you need any information of what type of finance would be best for your situation. 

Click here to find out more about managing cash flow.

Rent and business rates

If you are paying rent for your dental practice that can often be a big cost for you. In some areas of the country it would be cheaper to buy the freehold if possible, so it is always worth asking. It is also important to note that lease payments rise on a very regular basis, thereby increasing your costs further. 

Equipment 

This one is a fairly obvious cost, but it can take its toll on your dental practice. You will need necessary office equipment such as a computer, desk and chairs for your reception area. You may even want to furnish your waiting room, which can be an expense you need to factor in.

However, your largest expense will come from purchasing the necessary dental equipment for your surgeries. A dental chair, lighting, dental tools, X-ray equipment, anaesthetics, sterilising equipment and even consumables such as mouthwash and toothpaste are all part of equipment costs that you need to consider. 

Contact us to find out more

These do not all have to be bought outright all at once. There are many financing options that are lenient and can help your dental practice in the long run. Although you may factor in the costs of financing all the equipment you will need, you also need to factor in the costs that are included in keeping all your equipment up-to-date and maintained. You will also need to factor in the costs of lighting, heating and cleaning services of your dental practice.

Click here to find out more about asset finance for dentists

Although these costs will be a considerable amount, they are essential when it comes to setting up and running a functional and successful dental practice. 

Overall, the costs of running a dental practice are high, like many other medical healthcare practices. Often with dental businesses it can take some time and hard work before you start to see increasing profits. However, these profits are more than worth the costs of running your own dental practice and being in charge of your own business. 

Dental practice financing in the UK 

Buying, starting or growing your own dental practice is not a cheap process. Whether it is for property, assets or acquisition, the chances are that you will need to raise finance to build your dream practice. 

You will be able to get funding from many different mainstream lenders to finance a dental surgery, but it is imperative that you show good management of income, evidence of savings and prove your credibility with those lenders.

Acquiring a dental practice involves a large financial investment, so a comprehensive due diligence process is absolutely essential. It is also important to work with specialists along the way such as a dental solicitor, a commercial financial broker, and professional dental accountants, in order to minimise any risks. 

Click here to listen to our podcast episode on financing a squat practice.

Whether your dental practice is NHS or private, we can help secure the tailored finance your business needs to grow and succeed. 

Mortgages for dentists

We can help you find the right mortgage product to suit your needs. Whether you are re-mortgaging or buying a new site. 

Click here to find out more about commercial mortgages.

Acquisition finance

Acquisition financing will allow you to gain capital specifically for the purpose of buying your new dental practice. We can guide you through the best cost effective ways to do this and mentor you through how it will affect you and your business. 

Click here to find out more about acquisition finance.

Asset finance

Dental equipment is expensive, you need to think about all aspects that you will need to finance such as chairs, X-ray machines, you name it, it all comes with quite a hefty price tag. Asset finance assists you with spreading the cost of repayment of equipment over time.

This eases the financial stress and allows you to avoid the need to buy the equipment that you desperately need outright. Asset finance means that your practice can continue to deliver the highest quality of dental services without compromising on price. 

Click here to find out more about asset finance.

Business loans

There are many reasons as to why a business loan would be a great financing option for you. These types of loans are one of the best ways to secure working capital. You will need this type of capital to keep day to day operations consistent in your practice. There are two types of business loans available to you, secured and unsecured. Secured is a longer term lending based on the security of your business assets or unsecured which is a flexible, alternative finance solution, usually for smaller amounts. 

Click here to find out more about working capital.

Best banks for dental practice loans

Unfortunately, there is no easy answer to this question. It all comes down to what deals or terms work best for you and your business. This is why it is always best to use a professional who is qualified in handling the unique aspects of a dental practice sale and/or purchase.

Most of the high street banks all lend to dentists, but their offerings and terms vary greatly depending on what your requirements are.

For instance, whilst one bank may offer a lower interest rate, they may require more security than another. In addition, new challenger banks are interested in providing loans to dentists, so they are another source to consider for good terms.

To ensure you get the best deal available when you require finance, using Samera Finance to help you navigate the best loan terms available is highly recommended.

Our team of finance professionals are perfectly positioned to help you understand your financial requirements and provide a selection of finance offers for you.

Click here to read more about finance options for dentists.

Work with a commercial finance broker

In the same way as it’s important to work with expert dental accountants and dental solicitors when financing and buying an initial dental practice, it’s vital to do so when growth and further purchasing is required.

Never forget that a dental surgery owner’s talents lie with running the practice itself and not with accounting or legal implications. It’s better to work with experts to deal with these factors. We’ve worked on these aspects of scaling a dental practice with clients on many occasions and it’s made the process a lot simpler for them.

When you use a commercial finance broker like Samera, you tap into our decade’s of experience in the healthcare finance market. Remember, it’s not just about finding a deal for you, it’s about everything else the broker will do for you.

A broker can negotiate much more affectively, since we know the different structures and formats of deals and applications that lenders look for.

We are completely independent of any one lender. We will approach several lenders to find you the right finance solution for your business.

Click here to read our 5 reasons to use a commercial finance broker.

Our Expert Opinion

“There are so many options to borrow money on various terms these days which can be confusing. The cheapest rate is often not the best deal available, As loan to value, term of loan, arrangement fees, exit fees and legal fees are all things that need to be considered. That’s why now more than ever it’s essential to have a commercial finance broker assist to get the best deal, not just the best rate.”

Business Loans for Dentists

We’ve been helping to fund the future of the UK’s dentists for 20 years and our team are made up of former bankers with decades of experience and contacts in the UK’s healthcare lending sector.

You can find out more about working with Samera Finance and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

Dental Practice Finance: Further Information

For more information on raising finance for your dental practice, including more articles, videos and webinars check out our Learning Centre here, full of articles an webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

How Much Can I Raise?

It is still a surprise to me that many borrowers are not aware of how much they can raise when seeking finance for a project.

In most cases, potential borrowers underestimate what they can raise and, therefore, what they can purchase. 

When looking at buying a dental practice, the amount you can borrow is often linked to several things and lenders (Banks) all have different policies, limits and requirements.

Who am I dealing with when I borrow finance?

It is very important to ensure that you are dealing with a lender who has experience and knowledge of the dental market. Many bankers are “generalists” and deal with many types of businesses. 

Several lenders have set up specialist healthcare teams, staffed with knowledgeable staff who can assess your application in the correct way. 

These specialist teams are rarely located in local branches and their experience (as you would expect) varies with how long they have been with the team.

Action Point

When seeking finance for a project, borrowers often underestimate their borrowing potential. It’s crucial to work with lenders experienced in the dental market, as they can accurately assess your application. Specialist healthcare teams within certain lenders can provide valuable insights and tailored financing solutions for dental practice acquisitions.

Click here to read more about finance options for dentists.

What determines what I can borrow?

Bank Policy determines this, and this can vary as to: 

  • Lending an amount per dentist for each transaction
  • Lending a percentage of the goodwill valuation
  • Lending a percentage of the goodwill valuation plus lending against security
  • Sometimes lenders vary the amount they will lend according to where you are in the UK
  • Your professional experience – lenders require between 3 and 5 years minimum in a practice
  • Some borrowers restrict the term of the loan to 10 years, others to 15 years
  • If you are setting up a squat (start-up) then 70% finance may be available

Click here to read more about how banks assess you when you apply for finance.

What does this mean in terms of how much I can raise?

If you take a figure of 70% -80% as a guide for purchasing an NHS or private practice, this will give you a good idea of what can be achieved. 

However, loans can be available for up to 95% with security.

Before everyone goes off to look at that £1,000,000 practice, there are some basics to remember.

Contact us to find out more

Loans must be affordable. The EBITDA of a business (Earnings before interest, tax, depreciation and amortisation) will demonstrate whether a business can afford to support a borrowing. You will need to have cash available for a deposit, solicitor’s costs and fees that lenders charge.

You may need to look at how the business will perform in the future with you as the owner. Will you keep on the seller and the existing associates?  What new services will you introduce? What will you change? 

Lenders may require projections as evidence of how you intend to grow the value of the business. 

Action Point

Your borrowing capacity is determined by various factors outlined in bank policies, such as lending amount per dentist, percentage of goodwill valuation, professional experience, and location. Typically, loans can range from 70% to 80% of the practice’s value, with up to 95% available with security. However, affordability is paramount, considering the business’s EBITDA and your ability to cover costs like deposits and fees. Lenders may also require projections demonstrating how you plan to enhance the business’s value under your ownership.

Click here to watch our webinar on financing your first practice.

How to navigate the maze when applying for finance

You could contact your own bank and see if they can assist. However, considering all the differences would that be the right structure and cost for you?

Could you get a better deal elsewhere? Remember this is going to be for 15 years!

With all the differences in pricing, fees, loan terms, commitment periods and early repayment penalties it is best to shop around.

Click here to read our blog on How to finance a healthcare business.

So why use a broker?

As brokers, we are independent. We are not tied to any lender and will look at the market for you, we act solely for you.

We will assess your own situation as an individual case, we will approach several lenders who we believe can help you, using our own experience and knowledge of the industry.

We will obtain offers of finance for you from several sources so that you can compare the offers and decide which is best for you and your business.

We will negotiate on your behalf to get the best price for you and liaise with the lender through the process of due diligence, valuation,  taking of security and any other requirements they may have.

You will have us by your side throughout the process, utilising 200 years of banking experience across the team and the knowledge of us having completed so many deals in that time.

Action Points

  • Independence: Brokers are not tied to any specific lender, allowing them to impartially assess the market and find the best fit for your needs.
  • Personalized approach: Brokers evaluate your unique situation and approach multiple lenders they believe can offer suitable solutions based on their industry expertise.
  • Access to multiple offers: Brokers obtain finance offers from various sources, enabling you to compare terms and select the most favorable option for your business.
  • Negotiation support: Brokers advocate on your behalf, negotiating with lenders to secure competitive pricing and favorable terms.
  • Expert guidance: With years of banking experience and numerous deals completed, brokers provide invaluable support and guidance throughout the entire process.

We will make sure that you see what is available across the market.

Click here to read 5 reasons to use a commercial finance broker.

Business Loans for Healthcare Businesses

We’ve been helping to fund the future of British healthcare businesses for over 20 years and our team are made up of former bankers with decades of experience in the UK’s healthcare lending sector.

You can find out more about working with Samera and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

For more information on raising finance for your healthcare business, including more articles, videos and webinars check out our Learning Centre here, full of articles and webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

How to Finance a Squat Practice

Dental Business Guide Podcast Episode | 8th February
Arun Mehra & Nigel Crossman

Financing Strategies for Squat Dental Practices  

Starting a dental practice from scratch can feel like a big challenge, especially when it comes to money. However, if you use the right methods, you can create a successful dental practice without spending all your savings. In this guide, we’ll explain the basic ways to get money for new dental practices. We’ll talk about different options like regular bank loans and other ways to get money. We’ll also give you tips to help you make the most of these options.

When you have the right money strategies, you can build a dental practice that will last a long time in your community. So, let’s explore the world of funding for dental practices and see what choices you have.  

You can read more articles, webinars and podcasts on starting a dental practice on our Learning Centre.

Introduction to squat dental practices

Starting a new dental practice, which is also called a squat practice, is different from established practices in the dental field. These are new practices that are just beginning and they might face a bunch of challenges when it comes to getting the money they need. To understand what’s unique about these start-up practices, it’s important to learn about them.

Starting a dental practice from the beginning needs careful planning, managing money, and knowing how the dental industry works. Start-up practices face challenges like getting money to buy equipment, finding a good place to work, and hiring the right people. They might also have a hard time finding enough patients and making steady money at first. But even though there are problems, start-up dental practices also have chances for dentists to make their practice the way they want and create a special experience for patients. By using smart money strategies, dentists can understand money stuff and make their practice successful over a long time.

The challenges of financing a squat dental practice

Getting money for a start-up dental practice can be really tough. Unlike established practices that already have patients and money coming in, start-ups have to start from scratch. This can make banks more hesitant to lend money because it seems riskier. One big challenge is getting the money you need to start the practice. You have to pay for things like finding a place to work, buying equipment, hiring staff, and advertising. All these costs can be a lot.

Regular banks might not want to lend money to a proposed start-up practice without a good financial history or something valuable to offer if things go wrong. Another challenge is getting patients and making money regularly. It takes time and effort to build a group of patients, and it can be slow when you’re just starting. This can make it hard to pay for ongoing things and pay back any loans or money you borrowed. Also, start-ups might have trouble getting good loan terms. Lenders might ask for higher interest rates or stricter rules because they worry about the risks of a new and uncertain practice.

Contact us to find out more

This can make it hard for the practice to stay strong financially and grow. To handle these challenges, dentists who want to fund a start-up practice should look into different ways to get money. This might mean finding lenders who know about dental practices or looking at options like crowdfunding. It’s also important to have a smart and detailed plan for your business that shows how it can grow and make money. On top of that, building good relationships with dental experts, like suppliers or other dentists, can give you helpful advice and connections that might help you get money or find patients. So, funding a start-up dental practice can be tough under certain circumstances. But with careful planning, different money options, and a strong business plan, dentists can handle these challenges and set themselves up for success in the long run.  

Action Plan

Starting a dental practice from scratch, known as a squat practice, presents unique financing challenges. Securing funds for equipment, hiring staff, and marketing can be difficult without an established patient base. Traditional banks may be hesitant to lend to new practices due to perceived risks. Additionally, attracting patients and generating steady income poses challenges initially. Dentists can overcome these hurdles by exploring alternative funding options, such as lenders familiar with dental practices or crowdfunding. A well-developed business plan and strong industry connections are also essential for success. Despite the challenges, careful planning and strategic financing can pave the way for a thriving practice in the long term.

Understanding the different financing options available

When it comes to getting money for your start-up dental practice, it’s really important to know about the different ways you can do it. This knowledge will help you make smart decisions that fit with your practice’s money goals.

One option is to get a regular bank loan. This means you ask banks or other lenders to give you money for your dental practice. These loans usually have set interest rates (either the rate stays the same or changes) and a plan for how you’ll pay it back. It’s really important to look into different loan options and pick the one that works best for your practice.

You can look into options for getting money to buy equipment using asset finance. Dental tools can cost a lot, and there are special ways to get money just for buying equipment. This can help spread out the cost over time, so it’s easier to handle your practice’s money.

For some dental practices, it might be an alternative option to get money to buy an existing practice or make your current one bigger. This is called practice acquisition funding. It gives you the money you need to buy established practices, which helps you switch smoothly and get more patients.

Last but not least, think about private funding or partnerships. People who have money, like family, friends, or other dentists, might want to invest in your practice. This can be another way to get money that fits your situation. Knowing about all these different money options is really important. It helps you make smart choices that work for your startup dental practice’s needs and goals. By looking into each option carefully and talking to money experts, you can get the money you need to make your practice grow and succeed.  

Action Plan

When financing a start-up dental practice, several options are available to consider. Traditional bank loans offer a straightforward approach with set interest rates and repayment plans. Asset finance provides specialized funding for purchasing expensive equipment, allowing for manageable payments over time. Practice acquisition funding facilitates the purchase of existing practices or expansion of current ones, streamlining the transition and attracting more patients. Private funding or partnerships with investors, such as family members or fellow dentists, present alternative avenues for securing funds tailored to individual needs. Understanding these diverse financing options empowers dentists to make informed decisions aligned with their practice’s goals, ensuring growth and success in the long term.

Traditional bank loans for dental practices

Regular bank loans can be a good way for startup dental practices to get the money they need for different things. These loans come from banks or financial companies and can provide a lot of money to help dental practices with their money needs. One big advantage of regular bank loans is that they’re easy to get. Banks are usually willing to work with dentists to give them the right kind of money for what they need as they (rightly) see the healthcare industry as a safe bet.

This could be money for buying equipment, fixing up the office, getting an existing practice, or just working capital. When you think about a bank loan, it’s important to know about the different kinds. The most common one is a term loan. This means you get a set amount of money and you have to pay it back over a certain time, usually with a fixed interest rate. This helps dental practices plan their money and make regular payments until they’ve paid back the whole loan.

Another kind of bank loan is a line of credit. This gives you a set amount of money that you can use whenever you need it. This can be really useful for dental practices that don’t always make the same amount of money or have costs that change. You only pay interest on the money you use, which can save you money.

To get a bank loan for a dental practice, you have to be prepared. Lenders will look at how well your practice is expected to perform financially, like how much money you make and how much profit you have according to your business plan. You need to have a strong plan for your practice, financial records, tax papers, and any other important papers ready to show the bank.

Even though regular bank loans can be a good way to get money, there are some things to think about. Banks can have strict rules for giving out loans and might need to secure the loan in case things don’t go well. Also, it can sometimes take a while to apply and get approved for a bank loan if you get the business plan or application wrong, so you need to be patient and careful.

So, regular bank loans can give startup dental practices the money they need to grow and run their business. Understanding the different loan options, getting the right documents ready, and being aware of the challenges are important when you’re trying to get a bank loan successfully.

Action Plan 

Regular bank loans are a reliable option for startup dental practices to secure financing for various needs like equipment purchases or office renovations. They offer fixed-term loans with predictable payments or flexible lines of credit, allowing access to funds as needed. However, applicants must prepare strong business plans and financial documentation, and be aware of stringent approval criteria and potential delays in the application process. Overall, bank loans provide valuable support for dental practices’ growth and operations.

Equipment financing and leasing options

When you’re running a dental practice, having the right equipment is really important. But buying dental equipment can cost a lot of money, especially for new dental practices that are just starting out. This is where equipment financing and leasing options can be really helpful.

Equipment or asset financing lets you spread out the cost of buying dental equipment over time. Instead of paying a big amount upfront, you make regular monthly payments over a set period. This makes it easier for your practice’s budget. You get the necessary equipment without having to pay a lot of money all at once.

Leasing, on the other hand, gives you the chance to use the equipment without owning it completely. With a lease, you pay a monthly fee to use the equipment for a certain time. When the lease period is over, you can choose to renew the lease, upgrade to newer equipment, or give back the equipment. Both equipment financing and leasing have their pros and cons.

Financing lets you eventually own the equipment, while leasing offers flexibility and the option to upgrade when technology improves. Which option you choose depends on what your practice needs and your money situation.

Before you decide on equipment financing or leasing, it’s important to do some research and compare different banks or leasing companies. Look for good interest rates, flexible payment terms, and reputable providers. You might also want to work with a financial advisor who specializes in supporting dental practices. They can guide you through the process and help you make the best decision for your practice. Getting the right dental equipment is crucial for providing good care to your patients. By looking into equipment financing and leasing options, you can overcome money obstacles and make sure your new dental practice has the tools it needs to do well.  

Action Plan

Equipment financing and leasing options provide valuable solutions for dental practices facing the high costs of acquiring necessary equipment. With equipment financing, practices can spread out payments over time, easing the financial burden of upfront costs. Leasing offers flexibility, allowing practices to use equipment without full ownership and providing options for upgrades or returns at the end of the lease term. Before deciding, it’s essential to research and compare providers for favorable terms and consult with financial advisors specializing in dental practices to make informed decisions.

Alternative financing options for squat dental practices  

When it comes to getting money for a new dental practice, traditional bank loans might not always be the best choice. But don’t worry, there are other ways to get the money you need to start your practice.

  1. One option is to get help from companies that specialize in giving money to dental practices. These companies know a lot about dental practices and can offer loans with payment plans and interest rates that make sense for the dental industry.
  2. Another idea is equipment leasing. Leasing means you can use the dental equipment you need without having to pay a lot of money upfront. Instead, you make regular payments over time. This is good for new practices that want modern equipment without spending a lot right away.
  3. You could also try crowdfunding. This is a way to ask people online to support your healthcare project. There are websites where you can create a campaign and people who believe in your idea can give you money. This can help you raise money and also let more people know about your practice.
  4. And don’t forget about teaming up with other dentists or investors. Working together with people who have similar goals can bring in money and support for your new practice.

It’s really important to look into all these different ways to get money and see which one fits best for your needs. You might want to talk to a money advisor or someone who knows about dental practices to get advice and make a smart choice.  

Action Plan

Alternative financing options cater to the diverse needs of new dental practices seeking funding. Specialized companies offer tailored loans with favorable terms, while equipment leasing enables access to modern tools without hefty upfront costs. Crowdfunding platforms provide opportunities to garner support and funding from backers, and partnerships with other dentists or investors can offer both financial resources and support. Consulting with financial advisors helps practices navigate these options effectively.

Tips for improving your chances of getting financing approval  

When it comes to getting money for your new dental practice, there are some important things you can do to improve your chances of getting approved. These strategies can help you get the money you need to start or expand your practice, so you can provide good dental care to your patients.

  1. Build a strong credit history: Lenders often look at your credit history when deciding whether to give you money. Make sure you have a good credit score by paying your bills on time, not having too much credit card debt, and avoiding unnecessary loans. If your credit isn’t great, work on improving it before applying for funding.
  2. Create a detailed business plan: Having a well-prepared business plan shows lenders that you’re serious and knowledgeable. Include detailed predictions about money, research about the market, and clear goals for your business. This will show that you know how to run a practice and handle finances.
  3. Collect important documents: Banks will need various papers to check how stable and trustworthy you are financially. This might include personal and business tax forms, bank statements, financial reports, and legal documents like licenses and permits. Make sure all these important papers are organized and ready to go to make the application process smoother.
  4. Get professional advice: Think about talking to a money advisor or someone experienced in the dental industry. They can give you helpful advice and guidance. They’ll help you understand the details of funding and suggest ways to improve your chances of getting approved.
  5. Explore different funding options: Don’t just stick to regular bank loans. Look into special funding options designed for dental practices, like dental practice loans, equipment financing, or working capital loans. These specific choices might give you more flexibility and better terms for what you need.

By following these tips, you can greatly increase your chances of getting the funding you need to start or grow your new dental practice. Remember, careful planning, a strong credit history, and exploring different funding options are key to boosting your approval chances and setting the stage for a successful dental practice.

Action Point

To improve your chances of obtaining financing for your new dental practice, focus on maintaining a strong credit history, creating a detailed business plan, organizing essential documents, seeking professional advice, and exploring diverse funding options. These strategies will demonstrate your preparedness and increase your appeal to lenders, enhancing the likelihood of securing the necessary funds for your practice’s success.

Contact us to find out more

Creating a solid business plan to attract lenders

Creating a strong plan is really important if you want banks to give you money for your new dental practice. A well-made plan shows that you’re skilled and committed to making your practice successful. It also helps banks understand your goals, strategies, and how you expect to make money. When you’re putting together your plan, it’s important to include certain important parts that banks look for.

First, explain your mission, which is what your practice is all about. Then, do a careful study of the market to know who your patients will be, who your competition is, and how your practice can grow. In the money part of your plan, give details about how much it will cost to start your practice. This includes things like equipment, supplies, and the place where you’ll work.

Break down how much money you think you’ll make and spend, including how many patients you’ll see, what you’ll charge, and how much insurance will pay you. Talk about what makes your practice special compared to others.

It’s also important to talk about how you’ll get patients and make your practice grow. Explain your plans for marketing, like using online ads, doing virtual events, working with the community, and partnering with other healthcare providers. Don’t forget to talk about your background, education, and experience. Lenders want to know that you have the skills to run a dental practice well.

Lastly, talk about how you’ll pay back the loan and what you can use as a guarantee. Lenders want to know they’ll get their money back. You can include a plan for repaying the loan, expected money statements, and something valuable you can offer as a promise that you’ll pay. By putting together a strong plan that covers all these things, you’ll make a strong case to lenders and increase your chances of getting money for your new dental practice.  

Click here to find out more about building a business plan for a dental practice.

Starting a dental practice can be tough, especially when it comes to getting money. But don’t worry, if you follow the right steps, you can overcome these challenges and build a successful practice. Remember to carefully look at your money options, get advice from experts, and think about different ways to get money. By doing these things, you can build a strong foundation for your new dental practice and get ready for long-term success.

Starting a Dental Practice: Get Started

We’ve been helping the UK’s dentists start their own practices for nearly 20 years and we know exactly what it takes to make your practice a success!

Our Dental Practice Start-up Programme is a hands-on consultancy service designed to take you through your whole journey to becoming a dental practice owner. Book a free, no-obligation consultation with one of our team at a time that suits you (including evenings). We’ll call you back and have a chat about how we can help start your dream practice.

Contact us today for all the advice, support and expertise you’ll ever need to start a dental practice.

Learn More: Starting a Dental Practice

For more information please check out the articles and webinars in the start a dental practice section of our Learning Centre, like our guide on How to Start a Dental Practice in 13 Steps.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Business Loans for Healthcare Businesses

We’ve been helping to fund the future of British healthcare businesses for over 20 years and our team are made up of former bankers with decades of experience in the UK’s healthcare lending sector.

You can find out more about working with Samera and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

For more information on raising finance for your healthcare business, including more articles, videos and webinars check out our Learning Centre here, full of articles and webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Secondary Sources of Finances

Dental Business Guide Podcast Episode | 8th February
Arun Mehra and Nigel Crossman

You can find all episodes of the Dental Business Guide Podcast here.

Exploring Secondary Sources of Finances for Dental Practices in the UK

Running a dental practice is a big job. From buying equipment to hiring staff, it costs a lot of money. Getting money to help your practice grow is really important. There are different ways to get money, like loans from banks or online lenders. In the UK, there are also other ways like getting money from private supporters or investors, or using crowdfunding. Each option has good and bad parts, and we’ll talk about them. You’ll learn about all these choices and how to decide which one is best for your practice. By the end, you’ll know more about how to get money for your dental practice.

Click here to read our article on How to finance a healthcare business.

Introduction to secondary sources of finances for dental practices

When you’re running a dental practice, having a strong financial base is really important. People usually get money from banks as loans, but there are other places to get money from too. These other places can give you more help and flexibility in the UK.

These other places to get money are called secondary sources of funds. They’re different from the usual ways of getting money. They can give dental practices extra money in different ways.

One of these other places is crowdfunding. Crowdfunding lets dental practices ask lots of people for money to help their business. This can be a good way to raise money and get support from the community.

Another way is peer-to-peer lending. This is when you borrow money from regular people or groups, not just banks. There are websites that connect people who want to lend money with people who need it. This helps dental practices get money at good interest rates.

There are also grants and subsidies you can get in the UK. These are like gifts of money from the government, charities, or groups that help certain industries. You can use these grants for things like making your practice bigger, getting better equipment, or doing research.

Looking at these other ways to get money can give dental practices more choices. By using different sources of money, practices can have better chances of getting the money they need. This helps them make more money, grow, and do better things. But, it’s important to read and understand the rules of these other ways to get money so they match what the practice wants and can afford.

Read our article on why you should use a commercial finance broker.

Traditional financing options for dental practices in the UK

When it comes to getting money for a dental practice in the UK, there are a few usual choices. Many dental experts have used these choices for a long time, and they are still good ways to get money.

One common choice is a bank loan. Banks have special programs for healthcare professionals like dentists. These loans have good interest rates and flexible ways to pay back the money, which is helpful for dental practices.

Another usual choice is a line of credit. This is like having an amount of money that you can use for different things, like buying equipment or growing the practice. With a line of credit, you only borrow what you need and pay interest on that.

Leasing is another choice for dental experts. Instead of buying expensive equipment all at once, you can rent it for a while by paying regular amounts. This helps save money and keeps your practice up-to-date with new technology.

Some dental practices might also think about working with other dental experts or investors. This could mean sharing the financial responsibility or getting money from investors who want a part of the practice’s profits.

While these usual ways to get money have worked for most dental practices in the UK, it’s important to look at the terms, interest rates, and how you’ll pay back the money for each choice. Checking out different options and talking to financial experts can help dental experts make good decisions about which choice is best for their needs and goals.

Alternative financing options for dental practices in the UK

When it comes to getting money for a dental practice in the UK, there are more choices than just regular bank loans. Actually, there are other ways to get money that dental experts can think about. They can use these options for different reasons, like making their practice bigger, getting new equipment, or paying for unexpected things.

One option is peer-to-peer lending. This is when people lend money to other people directly. Dental professionals can use this method to get money quickly and maybe at lower interest rates than regular banks. Peer-to-peer lending is a good choice for dentists who might not meet all the strict rules of regular banks or want a simpler process.

Another option is using lending companies that specialize in dentistry. These companies know a lot about dental practices and give loans that fit their needs. They understand the challenges dentists face and can help them with the money they need. These companies also give expert advice and support during the lending process.

Crowdfunding is also a way for dental practices to get money. They can show their ideas to a big group of people through crowdfunding websites and get money from people who believe in their plans. This method gives money and helps build a community of supporters and potential patients.

Dentists can also think about leasing equipment. This means they can use the newest dental equipment without buying it all at once. This can save money, especially if they’re just starting or growing their practice.

In short, dentists in the UK have many options to get money beyond regular bank loans. Trying out these options can give more flexibility, speed, and tailored help for their special needs. Whether it’s peer-to-peer lending, dental-focused lending companies, crowdfunding, or equipment leasing, dental professionals can find the money they need to reach their goals and succeed in a competitive field.

Peer-to-peer lending platforms

Shared lending platforms have become a good choice for dental practices in the UK to get money. These platforms are different from regular banks. They let people who need money connect directly with individuals who want to lend it. This way, dental practices can get the money they need without going through a long and complicated process.

One big advantage of these platforms is that they can offer lower interest rates. Since the lenders are regular people and not big banks, they often give loans with better terms. Also, using these platforms online makes it quick and easy to apply for a loan, saving time and effort.

Moreover, these lending platforms help dental practices reach more potential lenders. These platforms have many individual lenders with different backgrounds and interests. This makes it more likely to find people who really want to help dental practices. This is especially useful for new practices or those with special needs.

When thinking about using these lending platforms, dental practices need to do research and be careful. It’s important to choose a platform that is trustworthy and has a good history of successful lending. Reading reviews, understanding the platform’s terms, and looking at how they approve loans are important steps to pick the right lending platform for a dental practice’s money needs.

In short, shared lending platforms offer another option for dental practices in the UK to get money. With lower interest rates, a diverse group of lenders, and an easy application process, these platforms can help dental practices get money for growing, buying equipment, or other money needs.

Crowdfunding for dental practices

Crowdfunding has become a popular and effective way for dental practices in the UK to get money. In the past, dentists would ask banks or other money places for loans to grow their practice, get new equipment, or start a new one. But now, crowdfunding lets dentists get funds directly from a big group of people who believe in their ideas and want to help them succeed.

With crowdfunding, dental practices can reach more potential supporters, like patients, friends, family, and even strangers who are interested in new healthcare solutions. By making an interesting campaign, dental practices can show what makes them special, explain how they’ll use the money, and offer cool rewards to encourage people to support them.

A great thing about crowdfunding is that it helps build a community with supporters. Dental practices can use this chance to connect with their patients and make a group of people who not only give money but also talk positively about the practice. This can lead to more loyal patients, word-of-mouth recommendations, and a better reputation.

But, it’s important for dental practices to plan carefully when using crowdfunding. A successful campaign needs good research, a clear plan, and a story that makes sense to supporters. It’s also important to set realistic funding goals and be honest about how the money will be used.

In the end, crowdfunding is a good option for dental practices in the UK to get extra money without just relying on banks. By using crowdfunding well, dental practices can get the money they need and also build a strong community of loyal patients. With good planning and a great campaign, crowdfunding can really help dental practices grow and improve.

Dental practice financing companies

When it comes to getting money for your dental practice in the UK, it’s important to look beyond just regular banks. There are other ways to get funding that can really help your business grow. While banks are the common choice, there are also special companies that focus on giving money to dental practices. These companies understand the unique challenges dentists face and have solutions designed just for them.

These dental practice funding companies really know about the dental field. They understand what you need and can give you advice on how to use the money. They offer loans and other types of support that fit exactly what dental practices need, like buying equipment, expanding your practice, or even having enough money for daily operations.

One great thing about these funding companies is that they know dentistry well. They can offer flexible ways to pay back the money, good interest rates, and options that match your goals and needs.

Plus, these funding companies usually make it easy and fast to apply and get approved for the money you need. They might also offer other helpful services like renting equipment, getting insurance, or having a line of credit.

Dentists should take time to research different dental practice funding companies to find the best one for them. You should look at things like interest rates, how you’ll pay back the money, what other people say about the company, and how much experience and help they offer.

To sum up, dental practice funding companies can be a really good way to get money for dental practices in the UK. They understand dentistry, offer tailored solutions, and know how to help dental practices succeed. By checking out these different funding options, dentists can open up new possibilities and make sure their practices do well in the long run.

Exploring lease financing for dental equipment and technology

Lease funding is a smart choice for dental practices in the UK who want to get new equipment and technology without spending a lot of money all at once. This type of funding lets dentists borrow the equipment and pay for it over time.

One great thing about lease funding is that it’s flexible. Dental practices can pick from different options for how long they want to lease and how they want to pay. This helps them manage their money well and use it for other important parts of their practice.

Lease funding also lets dental practices keep up with new technology. Since dental tools are always improving, it’s important for practices to have the latest equipment to give the best care to patients. By using lease funding, dentists can upgrade their equipment as needed, staying at the forefront of dental advancements.

Also, lease funding means dental practices don’t have to spend a lot of money upfront. Instead of using a lot of money to buy equipment, they can use that money for other things like hiring good staff, advertising, or growing their practice.

Lease funding for dental equipment and technology often comes with extra benefits, like tax advantages. Many times, the payments can be counted as an expense, which can lower the amount of taxes the practice has to pay.

When looking into lease funding options, it’s important for dentists to read and understand the lease agreement carefully. Knowing the interest rates, how long you have to pay, and any possible fees will make sure the funding plan matches what the dental practice needs and wants.

In short, lease funding is a good option for dental practices in the UK. It’s a smart way to get equipment and technology without spending a lot upfront. With its flexibility, staying up-to-date, saving money, and possible tax benefits, lease funding helps dental practices improve while also being financially stable.

Read our guide on asset finance for dentists.

Understanding the benefits and drawbacks of secondary financing options

When it comes to getting money for dental practices in the UK, thinking about both main and extra ways is important. While some people might prefer main sources like bank loans or personal investments, there are also other options that can be really helpful.

Before choosing any extra funding options, it’s crucial to understand the good and not-so-good things about them. One option is getting money from lenders or financial places that focus on dentists. These lenders know a lot about the dental field and can offer loans that fit what dental practices need.

The good things about this kind of funding are that these lenders understand dentistry well, which can lead to better loan deals. They might also be more flexible when approving loans because they understand the challenges dentists face, like irregular income or the need for new equipment.

However, there are some things to think about carefully. These dental-focused lenders might have higher interest rates compared to regular banks. They could also ask for stricter terms or things like collateral to get the loan. That’s why it’s really important to read and understand the terms of any extra funding option to make sure it matches what the dental practice wants and can do.

Another extra funding option to consider is leasing or equipment financing. This can be really useful when dental practices want to get expensive equipment or technology. Leasing lets practices spread out the cost over time instead of paying a lot upfront. It also allows practices to upgrade equipment as technology improves, without the pressure of owning it.

But there are some downsides to think about with leasing or equipment financing. Over time, leasing might end up costing more than buying the equipment outright. Also, leasing deals might have specific terms and rules, like how the equipment can be used or what happens if the lease is ended early. It’s really important to think about these things and compare them with the long-term money impact before making a decision.

In short, understanding the good and not-so-good things about extra funding options is really important for dental practices in the UK. Lenders focused on dentists can offer tailored loans but might have higher interest rates. Leasing or equipment financing is flexible but might be more expensive in the long run. By carefully thinking about these factors, dental practices can make informed decisions to get the money they need for growth and success.

Tips for successfully securing secondary financing for your dental practice

Getting extra money for your dental practice can be a big help when you want to make your business bigger, upgrade equipment, or hire more staff. But you need to approach this process carefully to make it work. Here are some important tips to help you get extra funding for your dental practice in the UK:

Make a detailed plan: Before you talk to any potential lenders, take time to create a plan that explains your goals, how much money you’ll need, and how you’ll pay it back. This will show that you’re serious and capable, increasing your chances of getting funding.

Research and compare options: There are different places to get extra funding for dental practices, like regular bank loans, government-supported programs, and lenders that focus on dental funding. Look into each option, compare interest rates, terms for paying back, and any other benefits or requirements.

Keep your credit in good shape: Lenders will look at your credit history to see how reliable you are with money. Make sure your personal and business credit profiles are good by paying bills on time, settling debts, and fixing any mistakes that might hurt your credit score.

Build relationships with potential lenders: Meeting and connecting with possible lenders can be really helpful when you’re looking for extra funding. Attend industry events, join professional groups, and talk to lenders to build trust and understanding. This can help you stand out and maybe get better terms.

Get all your paperwork ready: When you apply for extra funding, you’ll need to provide lots of financial documents, like tax records, profit and loss statements, balance sheets, and predictions of how much money you’ll make. Make sure these documents are accurate, up-to-date, and organized to make the application process smoother.

Seek expert advice: Talking to financial advisors or industry experts can give you really useful information and guidance throughout the funding process. They can help you understand complicated money terms, negotiate terms, and figure out the best funding options for your dental practice.

By following these tips, you can improve your chances of getting extra funding for your dental practice in the UK. Remember, planning ahead, doing research, and building professional relationships are key to finding the right funding solution that will help your practice grow and succeed.

Resources and organizations that can assist with finding secondary financing options

When it comes to finding extra funding options for dental practices in the UK, there are some helpful places and groups that can offer valuable support. These are specialized in helping businesses get more money beyond the usual methods.

One of these helpful places is the British Business Bank, a government organization that helps small and medium-sized businesses grow. They have programs to help businesses, including dental practices, get funding. They work with banks and partners to offer guidance and support for alternative funding options.

Another group that can be really useful is the Dental Business Support Network (DBSN). This group has experts who know a lot about the dental field. They provide business help for dental practices. They’re really good at helping practices figure out the financial side of things, including finding extra funding. Their personalized help can be super useful in finding the right solutions for your needs.

Apart from these special places, it’s important to look into local business support groups and development agencies in your area. These groups often have programs to help businesses get extra funding. They can guide you, give advice, and maybe connect you with banks or investors who know about funding dental practices.

Also, connecting with others in the dental world can be a good way to find more funding options. Joining dental associations, going to industry events, and talking to other dental professionals can give you tips and leads on extra funding that others have used successfully.

Remember, when you’re checking out extra funding options, make sure you research and understand each opportunity and its terms really well. Get advice from professionals like financial advisors or accountants to make sure you make smart choices that match your practice’s financial goals and future success. With the right help and connections, you can confidently explore the world of extra funding options for your dental practice in the UK.

Business Loans for Healthcare Businesses

We’ve been helping to fund the future of British healthcare businesses for over 20 years and our team are made up of former bankers with decades of experience in the UK’s healthcare lending sector.

You can find out more about working with Samera and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

For more information on raising finance for your healthcare business, including more articles, videos and webinars check out our Learning Centre here, full of articles and webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

How Should a Dental Practice Organise its Finances

Dental Business Guide Podcast Episode | 2nd February 2021
George Bellamy and Arun Mehra

Money Matters: Organizing Finances for Dental Practices  

Running a successful dental practice is more than just providing great dental care. It also involves managing money effectively. As a dentist, you need to keep track of your finances to make sure your practice makes a profit. Handling your money isn’t easy, especially when you have to balance taking care of patients and managing the practice’s finances.

In this article, we will talk about some tips and methods to help you organize and handle your finances better. We’ll cover everything from creating a budget and tracking expenses to looking at financial reports and managing your income. We’ll go through all the important steps to help you understand the financial side of your practice and run a successful dental business.  

Action Point

Organizing finances is crucial for running a successful dental practice. This article will provide tips and methods to help dentists manage their finances effectively, including budgeting, expense tracking, financial reporting, and income management, to ensure a profitable dental business.

Read more about the benefits of cloud accounting software.

The importance of organizing finances for dental practices

If you own a dental practice, you’re probably busy with lots of daily tasks like seeing patients, managing staff, and making sure everything runs smoothly. Sometimes, you might forget how important it is to plan your practice’s money.You’re not just the principal dentist, you’re a business owner. Organizing your finances well is highly important for your practice to do well and grow over time.

Being organized with your money helps you understand how your practice is doing financially. You can figure out where you’re making money and make smart decisions that help your practice make more money. It’s like having a strong foundation to manage how much money is coming in, how much is going out, and how to make more.

Also, when your money is organized, it’s easier to follow the rules about taxes and other legal requirements. If you keep good records and clear financial reports, you won’t get in trouble or have problems with mistakes.

Having an organized money system also helps you set goals for your practice, see how well it’s doing, and find ways to make it better. You can make important decisions, like buying new equipment or offering new services, based on what your financial info tells you.

By spending time and effort to organize your money, you can take care of your practice’s financial health and set it up for success in the long run. So, let’s dive in and explore the happy numbers that are waiting for you in the world of organized finances for dental practices.  

Action Point

Organizing finances is essential for dental practice owners. It helps you understand your practice’s financial health, make informed decisions, stay compliant with tax and legal requirements, and set goals for growth and improvement. By dedicating time and effort to financial organization, you can ensure the long-term success of your dental practice.

Contact us to find out more

Setting financial goals for a dental practice

Having clear money goals for your dental practice is really important to make it successful and lasting. When you don’t have clear goals, it’s tough to know how well you’re doing and if you’re improving. When you set money goals, it’s good to think about both short-term and long-term things you want to achieve. Start by looking at what’s happening right now. Check out how much money is coming in, how much is going out, and how much profit you’re making. This helps you understand where you are with money. Also, find out if there are any problems or risks you need to fix.

Next, figure out what you want to achieve with your money in the short term. Maybe you want to make more money, spend less, or earn more profit. Setting clear goals that you can measure and achieve over a certain time (like next month or three months from now) helps you stay on track and motivated. Think about things like getting more patients, how often leads are converted, and how much money each patient brings in. For example, you might want to get 10% more new patients in the next three months or improve how you talk to patients about treatments.

Action Point

Setting financial goals for your dental practice is crucial. Assess your current financial situation, establish short-term and long-term goals, and create a comprehensive financial plan to achieve them. Regular monitoring and adjustments will help ensure the growth and profitability of your practice.

Besides short-term goals, it’s also important to set long-term money goals that match your vision for your dental practice. These goals could be about growing your practice, buying new and better equipment, or making a certain amount of profit in a few years. Remember, your money goals should be realistic and possible to achieve. While it’s good to challenge yourself and aim for growth, setting goals that are too hard might be setting yourself up to fail. Keep checking and changing your goals as your practice gets bigger and things change.

Lastly, it’s super important to make a big plan for your money to help you reach your goals. This plan should cover how you’ll make money, spend money, pay off debts, and invest. Checking your money regularly and making changes when needed helps you stay on track to reach your goals. When you set clear money goals for your dental practice, you build a strong foundation for success. This helps you make smart choices that make your practice grow and make more profit.  

Tracking revenue and expenses effectively  

Keeping a close eye on the money that comes in and goes out is really important for any dental practice that wants to be good at managing their finances. By paying attention to these numbers, you can learn important things about how your practice is doing financially and make smart choices to make more money.

To start with, it’s really important to have a good system for recording and sorting out all the money you get and spend. You can do this using specialist software made for dental practices, or you can work with a professional who knows how dental practices work. Keeping up-to-date financial records means you can make accurate reports that show you how well your practice is doing with money.

When you’re tracking the money that comes in, it’s a good idea to separate it into different parts, like payments from insurance, money from patients, and even income from selling dental products. This helps you see which parts bring in the most money and which parts might need some improvement.

Also, keeping a close watch on all the money you spend is important. Divide your expenses into different categories like supplies, equipment, rent, utilities, and salaries for your staff. This helps you find out if you’re spending too much in some areas and where you might save money.

Checking important financial reports regularly, like statements that show your profit and loss, your financial status, and how money is moving in and out, gives you a good overall view of how well your practice is doing financially. These reports help you see patterns, find any mistakes, and make choices based on facts to make more money.

It’s also a good idea to set financial goals for your practice and keep track of how you’re doing. By setting clear goals, like making more money or spending less on certain things, you can see if you’re doing well and change things if needed. In short, keeping a close watch on the money that comes in and goes out is really important for dental practices to manage their finances well. By using good systems, recording everything correctly, and regularly looking at financial reports, you can learn important things, make smart choices, and work towards reaching your money goals.  

Action Point

Effective tracking of revenue and expenses is crucial for dental practices. Use specialized software or professional help for accurate financial records. Categorize income and expenses to identify trends. Regularly review reports for insights and set financial goals to stay on track.

Implementing a bookkeeping system for accurate financial records  

Setting up a system to keep track of your practice’s money is really important for dental offices. This system helps you record the money you make and spend, and it helps you see how well your practice is doing financially. First, you need to choose the right software to help you with your money. There are different options, from easy-to-use programs online to more advanced ones. Think about how easy it is to use, if it works with your other systems, and if it can grow with your practice.

Once you’ve picked the program, you need to set it up right. Put in all the financial information, like what patients pay and what insurance gives you. Sort your spending into categories like supplies, staff salaries, rent, and advertising. This helps you understand your money better and find areas where you can do better. Updating your money records often is important to keep things accurate. Set aside time every week or month to put in new information, check that your bank statements match, and look at your money reports. This routine helps you have the newest info and make good choices based on real data.

Also, think about connecting your money system with other software you use to manage your practice. This can make your money tasks easier and reduce the chances of making mistakes. For example, connecting your financial system with your patient management software can automatically record patient payments, saving you time and effort.

Lastly, it’s a great idea to talk to a professional accountant or bookkeeper who knows about dental practices. They can help you set up your money system, give you advice on best money practices, and make sure you follow the right tax rules for dental businesses. By setting up a good financial structure, you not only keep accurate money records but also learn important things about how your dental practice is doing financially. This knowledge helps you make smart choices, improve how money comes in, and work towards long-term success.  

Action Point

Implementing an effective bookkeeping system is vital for dental practices. Choose the right software that suits your needs and integrates with other systems. Set up the program with accurate financial data and categorize expenses. Regularly update your records to ensure accuracy. Consider integrating your financial system with other practice management software for efficiency. Consulting a professional accountant or bookkeeper experienced in dental practices can provide valuable guidance. Accurate financial records enable informed decision-making and long-term success.

Understanding and analysing key financial ratios

Knowing and understanding important money ratios is really important for dental practices to keep their business healthy and successful. These ratios help you learn important things about how well your practice is doing with money and how healthy it is overall.

One important ratio to think about is the profit ratio. This ratio helps you see how well your practice is turning its work into profit. You can find it by dividing the profit you make by all the money you get. A high profit ratio means your practice is really good at making profit from the money it gets. But if the ratio is low, it might mean you need to find ways to manage costs better or make more money.

Another important ratio is the liquidity ratio. This ratio helps you know if your practice can easily pay its bills and debts. For example, the current ratio compares the money you have right now to the bills you have to pay soon. If the ratio is more than 1, it means you have enough money to pay your bills. If it’s less, it might mean you could have trouble with money soon.

Also, there’s the debt ratio. This ratio helps you understand how much of your practice’s money is borrowed. It compares how much debt you have to how much stuff you own. If the ratio is high, it means you’re using a lot of borrowed money, which could be risky.

Another ratio to look at is the accounts receivable turnover ratio. This ratio helps you know how quickly your practice is getting paid by patients and insurance. A higher ratio means you’re good at getting paid fast. A lower ratio might mean you have problems with how you collect money.

By understanding and keeping an eye on these important metrics, dental practices can make smart choices to make their money situation better. Regularly looking at these ratios helps practice owners find ways to do better, solve money problems, and make sure their business keeps doing well over time.

Action Points

Understanding key financial ratios is crucial for dental practices. The profit ratio shows how well the practice turns revenue into profit. Liquidity ratios measure the ability to pay short-term bills, with ratios over 1 being good. The debt ratio assesses debt reliance. Accounts receivable turnover indicates payment collection speed. Monitoring these ratios helps make informed financial decisions for long-term success.

Best practices for inventory management in dental practices

Keeping track of and managing the things you use in your dental practice is really important. This includes supplies and equipment. When you manage these things well, it helps your practice be successful. It makes sure you have what you need when you need it, and it also helps you control costs and reduce waste. Here are some good ways to manage your stuff in your dental practice:

Conduct regular audits: Look at your supplies and equipment often to see what you have and if anything is missing or old. This helps you know what you need to order, when you need to order it and what affect that will have on your cash flow.

Categorize and organize: Arrange and put your things in order so it’s easy to find and restock them. Use clear labels and storage solutions to keep everything organized and in good shape.

Set par levels: Decide how much of each thing you should always have based on how often you use them. This helps you avoid running out or even facing a shortage of any items and makes sure you always have enough for your patients.

Establish a reorder process: Make a simple process to order more supplies before you run out. Keep track of what you have and get automatic alerts when things are running low. This helps you avoid last-minute rushes to get more supplies.

Monitor expiration dates: Some dental supplies can expire, and using expired things can be bad for patients and wasteful. Check expiration dates regularly and use things before they go bad.

Utilize technology: Consider using special software or tools that help you manage your supplies. These tools can help you track what you have, make reports, and show you how much you need. They make it easier to manage your supplies.

When you follow these good practices for managing your supplies, it helps your dental practice run smoothly, take better care of patients, and use money wisely. With well-organized and well-managed supplies, you can focus on giving great dental services and make sure you always have what you need for your practice.  

Action Point

Efficient inventory management in dental practices involves regular audits, organization, setting par levels, establishing reorder processes, monitoring expiration dates, and utilizing technology. These practices ensure a well-stocked and organized supply system, promoting smooth operations and quality patient care.

Optimizing insurance billing and claims processing

A big part of making a dental practice successful is making sure insurance billing and claims are done right. Handling the money side of your practice well can lead to more money coming in, less paperwork, and happier patients.

First, it’s important to have a simple and organized system for billing insurance. This means checking if patients are covered by insurance before appointments, coding procedures correctly, and sending claims quickly. This helps you avoid problems with claims and makes sure you get paid properly. Using electronic submission for claims can make this even easier, reducing mistakes and saving time.

Also, it’s crucial to keep learning about the rules and changes in insurance. Regularly updating your knowledge about billing codes and ways to do things right can help you get more money from insurance and avoid problems with following the rules. Using good dental practice software can really help make insurance billing and claims easier. These software tools often have features like sending claims automatically, checking if patients are covered in real-time, and tracking claims. This makes sure you get paid correctly and on time. Also, it’s important to stay in touch with insurance companies. Building good relationships with them can help solve any problems or delays with claims quickly, which is good for your practice and your patients.

Finally, looking at your insurance billing and claims data regularly can help you see how your practice is doing with money. Finding patterns in claim problems, payments that are too low, or claims that were missed can help you fix issues and make sure you’re making enough money. By making insurance billing and claims better, dental practices can have more money, less paperwork, and give patients a smoother experience overall.

Utilizing technology for streamlined financial management  

In today’s digital world, using technology is essential to make money management easier for dental practices. The days of doing everything by hand and using paper records are gone. With the right tools and computer programs, dental practices can make their money tasks much easier, save time and resources, and also be more accurate and efficient.

One of the big parts of money management is keeping track of the money you get and spend. By using accounting software like Xero, dentists can easily record transactions, make money reports, and see how much money is coming in and going out in real-time. This doesn’t just give a good picture of how the practice is doing with money, but it also lets you make quick decisions based on correct and up-to-date information.

Another important technology to think about is digital payment systems. Giving patients the option to pay digitally not only makes things easier for them, but it also makes collecting payments smoother. When you connect online payment systems with the practice’s computer program, you can easily handle payments, keep track of what patients owe, and even remind them to pay. This makes things easier and makes sure payments are made on time. Technology can also help with billing insurance and dealing with claims. By using electronic ways to send claims and keeping track of them, dental practices can reduce paperwork, avoid mistakes, and speed up the process of dealing with claims.

Automatic tools that check if patients are covered by insurance can also help with accurate billing and fewer claim problems. This doesn’t just make the practice’s money situation better, but it also makes patients happier by reducing problems and delays with billing. Additionally, using cloud-based storage and systems to manage documents is a good idea. This helps store and organize money records, invoices, and receipts in a safe and easy way. It gets rid of the need for physical storage and lowers the risk of losing or damaging important documents. With cloud technology, authorized staff members can access financial information from anywhere, making teamwork easier and making sure everyone is on the same page.

To sum it up, using technology is key for dental practices that want to make money management easier. By using computer programs, digital payment systems, electronic claim submission, and cloud-based storage, dental practices can make their money tasks simpler, be more accurate, work more efficiently, and ultimately have more financial success.  

Regular financial reviews and seeking professional advice  

Checking your practice’s money regularly and getting expert advice are really important steps to understand and manage the money side of your dental practice. As a dentist, your main focus is on giving good care to your patients. But knowing how well your practice is doing financially is just as important. Doing regular money check-ups helps you keep a close eye on how much money is coming in and going out. It helps you find any possible problems and make smart choices to make your practice do better financially.

When you look at financial reports, like income statements, balance sheets, and cash flow statements, you learn important things about how much money your practice is making, how much it’s spending, and how well it’s doing overall. While doing your own money check-ups is important, getting advice from a professional like an accountant or financial advisor who knows about dental practices is really helpful. They can look at your money information, find areas where you can do better, and help you make a good plan to make more profit.

Also, a financial advisor can give you useful ideas about taxes, making budgets, and planning for the future. This helps you make smart choices to pay less in taxes, use money better, and be financially secure in the long run. Remember, staying on top of your practice’s money not only makes it financially healthy but also helps you give the best care to your patients. So, make sure you do regular money check-ups and get professional advice to understand and improve your practice’s money situation and find success in your dental practice.  

Handling the money side of a dental practice might seem tough, but with the right plans and steps, you can become great at managing the numbers that make people smile. We talked about things like keeping track of expenses and planning for equipment upgrades, which are important steps to take control of your practice’s money. By using these tips, you’ll make sure your practice is financially stable and ready to grow and succeed. Remember, having a well-organized money system is the key to a healthy smile, both for you and your patients.

Dental Accounts & Tax Specialists

As dental practice owners ourselves, we know what makes a clinic tick. We have been working with dentists for over 20 years to help manage their accounts and tax.

Whether you’re a dental associate, run your own practice or own a dental group and are looking to save time, money and effort on your accounts and tax then we want to hear from you. Our digital platform takes the hassle and the paperwork out of accounts.

To find out more about how you can save time, money and effort on your accounts and tax when you automate your finances with Samera, book a free consultation with one of our accounting team today.

Dental Accounts & Tax: Further Information

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Funding Options for Dentists

Asset Finance

Asset Finance is a type of commercial funding that enables you access to vital business assets such as equipment, tools and vehicles or it could enable you to release cash from the value in assets that you already own. 

Read out samera learning centre for more information.

Asset finance includes: 

  • Hire purchase
  • Finance leases
  • Equipment leasing 
  • Operating leases
  • Asset refinance
Dentist Chair

An ‘asset’ can be anything that you own, and with a wide choice of alternative lenders across the market, you can find assets in almost anything you own from an iTero scanner to vehicles. In many cases, companies do not have the upfront cash they need which is where asset finance provides a very useful form of commercial financing. 

Read on to find out more.

Acquisition Finance

Acquisition financing is the capital that is obtained for the purpose of buying another business – like an existing dental practice. It allows users to meet their current acquisition aspirations by providing immediate resources that can also be applied to the transaction. Acquisitions and mergers finance is the commercial funding required by a business or sole trader to purchase another business. Businesses usually do not come cheap and, therefore, it is common to need to raise acquisition finance to make the purchase. 

Acquisitions can take a number of forms, such as a straightforward business purchase, or a Management Buy-Out.

Read on to find out more.

Contact us to find out more

Working Capital Finance

A business’s working capital is the amount of ready cash it has to meet its day-to-day operations and debts. Working capital finance is commercial funding specifically designed to boost the working capital available to a business. 

Working capital is calculated by subtracting the total of the current liabilities from the value of the current assets. 

cash flow finance

Businesses that cannot meet their expenses or pay their debts will probably need to raise working capital finance. It is most often used for specific growth projects such obtaining a bigger contract or investing in a new market. 

Read on to find out more.

Tax Loans

Only 2 things are certain in life, and unfortunately, tax is one of them. Taxes are an inevitable cost in any business. Every business is responsible for paying their tax bill however, this can be extremely inconvenient at times. It is normal for a business’ cash flow to fluctuate however, it is imperative that money is put aside to meet tax obligations. This is where tax loans become an ideal way to spread out a tax demand across affordable monthly repayments without becoming a huge burden on your cash flow. 

Sometimes, your tax bill can make a serious dent in your business’s cash flow. For this, and other reasons, your business may need to raise commercial funding to cover your tax bill.

Read on to find out more.

Commercial Property Finance

Commercial property finance is the funding raised by a business or sole trader to purchase a commercial property. There are a range of commercial property finance options available to you to individually suit your growth objectives and current financial circumstances, whether you are acting alone as an owner of a small business or as an established limited company. 

There are various different channels and methods of commercial funding available to businesses seeking to purchase, expand or refurbish their commercial property.

Read on to find out more.

Bridging Loans

Bridging Loans are a short-term form of commercial funding used by businesses to ‘bridge’ a gap in their cash flow. They can be useful when you need immediate capital, integrate cash flow or make necessary refurbishments. They are loans that are priced monthly rather than annually, and lenders may lend anything between £25,000 to £25m. 

Click here to read our article on The Guide to Buying a Dental Practice

They are commonly used in commercial property financing and can be a very useful way to raise quick, short-term working capital. Bridging loans are one of the most useful and viable options when you need to move quickly to buy a property. 

Read on to find out more.

Join the Buyer’s Advisory Service

If you’re thinking about buying a dental practice and you want to make sure you find the right practice at the best price, contact us today.

We strive to ensure that we find you the practice that matches your precise specifications. Simply let us know what your dream practice looks like and we’ll get to work making that dream a reality.

Business Loans for Dentists

We’ve been helping to fund the future of the UK’s dentists for 20 years and our team are made up of former bankers with decades of experience and contacts in the UK’s healthcare lending sector.

You can find out more about working with Samera Finance and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

Dental Practice Finance: Further Information

For more information on raising finance for your dental practice, including more articles, videos and webinars check out our Learning Centre here, full of articles an webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

A Guide to Tax Loans

Tax bills are a recurring expense for all businesses including dental practices that can often take their toll. This is where tax loans come in and help manage this overbearing expense by helping you take control of your cash flow. They also help ease the costs of taxes by spreading the costs of your tax bill into manageable monthly payments. 

The amount of taxation that a business incurs is based on current tax laws that determines their tax liability. Tax liability is the amount of tax debt owed by an individual, business, corporation or any other entity. Tax liabilities are therefore incurred from earning any income from a business, a gain on the sale of an asset, estate or other taxable events. 

When a business’s tax liability is due, as a dental practice, they have to ensure that they have enough cash flow at hand to meet the demand of the tax laws in place. Unfortunately owing tax isn’t an easy debt to get out of. A tax bill cannot be put off until the business itself pays the bill. HMRC do not hesitate in issuing penalties for late or non payments. The tax rules are very strict and failure to adhere to them can become very costly for you and your business. 

In some instances, late penalties are one of the more tranquil consequences that the HMRC gives out. Penalties for late payment or non payment can have very bad consequences on your business. If you default on your payments for a very long time, the interest of your tax bill increases and so does your fines. This could lead to you having to liquidate a company in its entirety or its assets in order to fully pay HMRC what is owed through your tax liabilities. 

It is normal for a business’s cash flow to fluctuate over the different seasons, however, it is imperative that funds are put aside in order to meet tax obligations. However, this is often not always the case. The cash flow may not always be there and unforeseen circumstances do occur to hinder you from being able to pay your taxes. This is where tax loans come in handy for businesses. 

VAT and corporation tax payments come around regularly but they can still be a problem if your business does not have sufficient funds. Tax loans are designed to help manage your cash flow. Tax loans can fund personal tax, corporation, capital gains, inheritance tax amongst other overbearing tax bills you may incur. Tax loans allow you to spread the cost of your tax demand into more affordable monthly payments, allowing you to pay your tax bill comfortably. 

Contact us to find out more

What is VAT funding?

When quarterly VAT payments are looming for your dental practice and there is limited cash in the business to secure paying this bill, access to additional finance is very useful. 

VAT funding enables businesses to pay your quarterly VAT payments over the course of an agreed term (usually 12 months). This will be paid back over a series of monthly payments. This loan provides the liquid funds needed for businesses to settle their VAT bill without provoking any consequences from HMRC. Obtaining this loan will boost the company’s overall cash flow position as well as pay your VAT bills smoothly. 

As a business owner, there are a few things that may be worrisome for you. Owing the government funds can unfortunately often be part of that worry. A lot of business owners are not aware of the options that are available to them when they do not have enough working capital to pay the necessary bills. 

Businesses try to optimise their profits and strive to have working capital to reinvest and take advantage of business opportunities. For this reason, tax loans are becoming increasingly popular. These loans allow businesses to free up cash flow while meeting the demands of HMRC on time.

Forfeiting a tax payment or paying late is something you must try to avoid at all costs. Owing a debt to the HMRC is not something to be taken lightly. Often those who default on their tax payments are dealt with enforcement actions being taken against them. 

Regardless of what your business is, taking out a tax loan can be the financial solution that you need as it will enable you to spread out the cost of your tax bill over the course of  a 6-12 month term helping businesses navigate through the costs of tax while avoiding the wrath of HMRC and racking up late payment charges. 

Why are tax loans useful?

Tax loans are incredibly helpful and convenient to help pay your tax bill on time. On the one hand, it is in your best interest to stay within HMRC’s good graces by paying all your tax bills on time while on the other, you also want to leave yourself available cash for the essential day to day running of your business. Tax loans help you do both, very comfortably. 

Many lenders design your loan specific to your needs, there are loans that are specifically designed to pay tax bills. In some cases, funding a VAT bill can have tax benefits. This is because interest payments are often offset against corporation tax later in the financial year. 

Benefits of tax loans

  • Improved cash flow as well as control of cash flow
  • Easy, fixed monthly repayments
  • Flexible repayment terms
  • Easy quick and simple to arrange
  • HMRC receive payments directly and on time
  • Protects existing bank facilities
  • Keeps your bank funding lines open
  • Fixed rates
  • Fast decisions and fast funding
  • Personal service and dedicated account manager 

Many tax loan facilities operate in ways to enable you to receive the funds you need in a simple and timely manner. The main benefits tax loans have to businesses is that this loan will allow their cash flow to remain in their control, lift the weight of their tax bills by spreading out the costs into manageable monthly payments and avoiding any late payment consequences. 

How do I apply for tax bill funding?

As a dental business owner, VAT or tax payments can be detrimental to your business profits. Time constraints are very common, especially when it comes closer to the time to pay your tax bills. This is why the process of applying for funding is quite quick and simple. 

Unlike many other loans, detailed business plans and security assets are not needed, nor is it necessary to make long winded appointments to discuss the security of your loan. Many processes are flexible and quick with great affordability and transparency. 

Tax refund

Loan against tax refund

Taking out a loan against your tax refund is also known as a refund-advance loan. It is a type of secured loan. This means that you need to put up something in this loan to use as collateral. Usually this would mean an asset or an estate but in this case collateral refers to your anticipated tax refund. 

Tax refund loans are short term loans that must be repaid when you receive your tax refund. You will often receive this loan as a deposit into your bank account . When you get your tax refunded, it will be deposited into that same bank account and the loan amount will be deducted from the amount given. Interest and other fees will also be deducted from the amount of tax refund given to you. 

Pros and cons of tax refunded loans

Here are a  few things to consider before you take out a tax-refund loan. 

Pros of tax-refunded loans

Fast funding

When you apply and are approved for a ta-refund loan, the funds are available to you as little as 24 hours after you are approved. Usually the time it takes from your tax to actually be refunded to you is a minimum 21 days. 

Cons of tax-refunded loans

Fees

Unfortunately getting a tax refund loan may often involve paying interest on said loan. This is not the case with all tax refund loans, there are some lenders that are able to give you an interest free loan. However, even with an interest free loan, there still may be fees you will need to pay, for example, administrative fees that are associated with transferring your refund.

High risk 

There are potential risks with this kind of refund loan. The key risk being that the amount of the loan is based on how much you anticipate getting back in the refund. This may not accurately represent how much your tax refund will actually be. There are several factors that could impact that amount you are expected to receive and the actual amount you are given. 

An example of this is that if you owe a state debt such as a student loan or back taxes. These debts will be taken from your tax, therefore, your tax refund will be reduced. This will result in you receiving less funds than you had anticipated when taking out the loan. 

Tax refund loans

While tax refund advance loans can be a helpful and timely option to get the quick cash flow you need, there are many factors you must keep in mind before you decide to apply for this type of loan. 

If you do decide to apply for a tax-refund advance here are a few things we advise: 

Proceed with caution:

These loans can often come with a high interest rate and hidden fees.

Read the terms and conditions carefully:

To allow yourself to make the most out of this loan, you must ensure that you fully understand the terms and conditions of the loan and all the costs in their entirety. This includes any contractually included late fees or any prepaid card costs associated with the loan. 

Contact us to find out more

Corporation Tax Loan 

Corporation tax is the one of the most important taxes your business, however large or small, will pay. If you are unable to pay your corporation tax bill, you will be hit with penalty charges which will increase the longer you default on your payment and will exceed the overall amount you originally owed, fundamentally resulting in you being in a worse financial situation.

Charges begin from the day your payment is late, the interest of the lay payment will also continue to rack up over time so it is important to meet your payment deadlines.

If you are unable to pay your tax bill because the time for paying your taxes has come at a very inconvenient time for you, then a corporation tax loan would be ideal for your situation. It is an effective way to spread your tax demands across monthly repayments that are affordable for you.

What is corporation tax?

Corporation tax is a tax that all limited companies must pay. It is a tax that is payable against the profits the company makes. A corporation tax bill is based on the level of income a business has earnt through trading. It is the income derived from taxable events throughout the tax year such as asset sales. You are liable to pay corporation tax if your business is a member’s only club, a trade association, a limited company, a trade or housing association, or a group of individuals outside a partnership operating as a business. 

The current rate in the UK for corporation tax is 20%. This also applies to any companies you may have overseas but have an office or branch residing in the UK. HMRC usually calculates your corporation tax bill roughly 9 months after the business accounting year comes to an end. 

If your tax liabilities are not paid on time, similar to your business tax expenses, there will be penalties issued by HMRC. If your tax bill is quite high, the business itself could be forced to liquidate completely in order to pay your tax bill. The real truth for many businesses is that they sometimes simply are not in a position to be able to pay their bill which is why corporation tax bills can be very useful. It is important to note that HMRC will not send reminders about your tax bill until you are overdue.

This is a difficult situation to be in, especially if your current available capital does not allow you to meet the demanded amount of the corporation tax bill. Ideally, the best option is to set aside funds during the year to meet your tax bill however, It is normal for cash flow to fluctuate over the year based on different activities. This makes it hard to put a large amount of money aside especially when you have unexpected costs to pay. This is why corporation loans are becoming increasingly popular to help regulate cash flow and pay for a business’s tax bill. 

Who pays corporation tax?

All limited companies are liable for corporation tax. The tax is also aligned to the financial year of the business. However, there are a few exceptions such as when a new business changes its year end accounting date. 

Businesses are bound to pay taxes on any profits the business makes in its financial year. Corporation tax is also due on any money the business makes from investments and any chargeable gains. 

Benefits of a corporation tax loan

Corporation tax loans improve a businesses cash flow which is why they are increasing immensely in popularity amongst many different types of businesses. This added stable cash flow allows businesses to take advantage of this added capital to their business to fund unexpected costs or any drops in income.

A major benefit of a corporation taking a loan is the added cash flow to your business. The loan also helps avoid the risk of high and very costly charges for late or non payment of your taxes. The loan itself will improve the flow of your capital, this means that when your next corporation tax loan is due, you will be in a much better position to comfortably pay the bill. 

Regardless of the type of business you operate, it is possible for you to qualify to apply and receive a corporation tax loan. The loans have various options that are flexible for you and they will enable you to spread your tax bill over the course of several months. You will have fixed monthly or quarterly payments to repay your loan. 

There are a variety of lenders who specialise in commercial finance loans. They are able to design a plan that is flexible and suited to your specific repayment abilities to ensure that you will be able to pay your tax bill comfortably with monthly installments. 

Using corporation tax funding allows businesses to avoid the potentially costly HMRC penalties for late or non payments. You can usually get a decision on your corporation tax loan inquiry within as little as 24 hours in most cases. 

Where to apply for a corporation tax loan

There are a number of lenders who specialise in finance loans specific to paying tax such as corporation tax loans, which gives you many options to choose from. There are various online comparison tools that will be perfectly aligned to the needs of your business. These comparison tools and websites will also help you filter through different loans that are best suited to you with the lowest interest rates. 

Click here to read our article on How to finance a healthcare business.

Business Loans for Healthcare Businesses

We’ve been helping to fund the future of British healthcare businesses for over 20 years and our team are made up of former bankers with decades of experience in the UK’s healthcare lending sector.

You can find out more about working with Samera and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

For more information on raising finance for your healthcare business, including more articles, videos and webinars check out our Learning Centre here, full of articles and webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

A Guide to Bridging Loans

What is a Bridging Loan?

Bridging loans are a short term financing option that are quite different from a standard bank loan. They are often used by property buyers to essentially ‘bridge’ the financial gap between the sale of their current home and the final sale of their next property investment. However, these loans can be very helpful in many ways for businesses to use immediate funds to obtain quick capital for their dental practice, integrate cash flow or make necessary refurbishments. They are one of the most useful and viable options when you need to move quickly to buy a property. 

Bridging loans are usually offered between 1-18 months, with the loan repayable in full at the end of the term. An open bridging loan does not have a repayment date, but will still be a short term loan. For example, a 12 month bridging loan must be repaid on the 12th month or before the 12 month period ends. It is in your interest to repay the loan as early as possible in order to save on interest payments.

Bridging loans are very easily accessible and immediate financing which means that they typically have high interest rates and fees. 

What is Bridging Finance?

Bridging finance is a kind of commercial property finance which is usually used by companies and sole traders to quickly fund the purchase of a property. Traditional commercial mortgages often take months to arrange. Bridging finance companies can lend money much faster. This type of funding allows clients to obtain immediate funds to complete the purchase of a property or to bridge the gap between selling and buying a new estate. The loan will usually be secured against a charge of the property you are purchasing. 

How Much Can I borrow with a Bridging Loan? 

The amount that you can borrow is solely dependent on the value and the type of security property that you use. Bridging lenders will quote a maximum loan to value (LTV), this is usually between 65-80%. You are able to get a bigger loan depending on your exit strategy. 

Bridging loans are only meant for short term periods, so attempting to get a very large amount of money through a bridging loan without an adequate exit strategy is quite unlikely. 

Why is Bridging Finance Useful?

Bridging finance is useful for dental practice businesses because it is a loan option that is fast and flexible. This short term property loan option can be approved and released so quickly that it could be done in a matter of days. In many cases, this is a very valuable asset to obtain in the property industry. 

These loans are a highly useful tool for businesses to bridge the gap between two property transactions. Bridging loans are a practical solution for those who need extra time to sustain suitable long term finance. 

Contact us to find out more

What is Bridge Capital?

Bridge capital is temporary funding that helps businesses cover its costs until it can get permanent capital. The repayment terms for bridge capital vary on the individual, but usually payment is made in full when the loan reaches the end of the term. Usually, by this time, the company receives the necessary capital from their investment or a longer term loan. Bridging loans are typically secured on any real estate asset a borrower can offer. This can include commercial or mixed-use properties. 

How do I get a Bridging Loan?

Bridging loans are not widely available and are not offered by a lot of high street banks. Bridging loans are usually highly available from mortgage brokers and advisers. 

Although bridging loans are generally quicker to arrange than a mortgage, do not make the mistake that they are easier because lenders are less thorough. Lenders still make thorough checks of your current finances, the value or your perspective property and your current home. 

How Much do Bridging Loans Cost?

Bridging loans can end up being very expensive because they charge you a range of fees as well as interest. You will be charged monthly interest on your loan. Your lender will not quote the annual percentage rate (APR) as most bridging loans do not even last a whole year. 

You will be charged interest on your loan in 1 of 3 ways:

  1. Monthly interest: This is the most common way interest will be added to your loan. You will pay the interest each month, and it will not be added to the balance of your loan. You will pay off the full balance at the end of the term.
  2. Rolled up interest: This is when you pay all of the interest including your original loan, at the end of the term. The interest will be added each month and accumulated this way, however you will just pay the full amount when your term comes to an end.
  3. Retained interest: Your lender will calculate the amount of interest you will have to pay over the time-frame of your term when you first take out your loan. You will borrow the interest amount from the bridging lender when you apply for your loan including your initial figure. This will cover the monthly interest payments for a set period. You will then pay the loan back and the end of the term including the extra money borrowed for interest payments. 

Exit Strategies for Bridging Loans

An exit strategy is the term used to explain how the bridging loan will be repaid at the end of the term. A strong exit strategy is a vital part of any bridging loan application. It is having a strong exit strategy that makes the process of the loan application faster and lenders to be more flexible with your requests. 

Why is an Exit Strategy Important?

Having a preplanned and strong exit strategy is very important on a bridging finance provider’s checklist. These loans are based on an interest only basis. How you plan to settle the end of your loan at the end of its term is the most crucial part of your loan.

When your term has come to an end, your lender will expect your loan to be paid back in full as agreed. In the case that you are unable to do this, your account will then be put into default. If this happens it could affect your credit record. In order to avoid this situation you will need to resolve the situation as quickly as possible.

Here are a few options for you:

  • Extend your loan with your lender. This may mean that you will continue to add interest on your current loan if you are near your maximum loan to value. It is also important to note that your lender may not agree to renew the loan. If they do agree, they may charge a higher interest rate in exchange for the renewal.
  • Refinance to a new lender. This option could get very expensive for you as you will have to restart the process and pay all setup costs again. 

Remember that if you do refinance your loan, you still need to consider what your exit plan is for your new loan. Refinancing blindly is a temporary solution, you will just be delaying the inevitable unless you plan a way to properly pay back the loan.

What if I can’t Pay Back the Loan by the End of the Agreed Term?

Bridge loans in their nature are arranged for short term requirements and the lender expects all clients to contractually abide by the terms of repayment within the set time frame agreed. 

Bridge loans, like many other loans, are set up with a set plan to arrange how the loan will be repaid. Usually, the lender will not allow the loan to proceed if there are any hesitations about your ability to repay the loan. 

When you hit the end of your term, you are expected to repay the loan in full. Acceptable exit methods are usually sale of property or refinance. There are a range of different exit strategies that may work for you. 

Loans are a contractual agreement, however, it is inevitable that some loans will overrun the agreed term. The lender will often contact you (the borrower) at least 3 months prior to the end of the agreed term to examine how things are going for you and determine whether you will be able to pay back the loan in time of the agreed term. If the lender believes that it is not likely, they will usually recommend other steps that you can take to ensure that you can get back on track and eventually, you will be able to fully repay your loan.

The lender will obviously want the loan repaid as and when agreed but they will normally work with borrowers who have over run their term only if the borrower is open about their situation and is in continuous regular contact with the lender. This way you and your lender are able to work out a plan to get you back on track together. 

We always recommend that when taking out a bridging loan, you opt for the longest term available as many plans can over run the expected timeframe. 

How Long Can I Take Out a Bridging Loan for?

The average term for a bridging loan is approximately 6-7 months. In different circumstances, longer terms can be discussed and arranged. It is often dependent on how much your loan is for that your term can be extended. 

Are Bridging Loans Regulated?

A bridging loan becomes ‘regulated’ when the loan is secured against a property that is or will be occupied by the borrower. A regulated loan can be secured by a first or second charge, the bridging loan will be regulated by the FCA. 

Bridging loans that are unregulated are usually associated with commercial buy-to-let properties. 

Can I Get a Bridging Loan Without a Credit Check?

No. Like most other loans, bridging finance involves a thorough check into the finances of the borrower. 

Applicants with clean credit history are often more attractive to lenders which results in these applicants receiving favourable rates. However, good credit is not only what lenders look for. There are other aspects and details of your loan that will help you get approved by your lender even though you may have a bad credit history. 

Can I Still Get a Bridging Loan if I Have Credit Issues?

Although thorough checks into your credit history will be taken before you take out your loan, bridging loans can still be available to you even if you have a poor credit rating. Your bridging finance is often determined by the security of the property being offered as well as the exit route. Your lender will also take into account the size of your deposit and the assets you put up as security. 

A lender’s biggest concern is that having poor credit history will prevent you from repaying the loan at the end of the term. It is highly dependent on what you put up as security and what your exit strategy is. If you have a strong exit strategy such as, to sell the property or another estate, then there is a lesser chance to have an impact on you taking out the loan. 

Closed-Bridge and Open-Bridge Loans

What is a closed bridging loan?

A closed bridge loan is for people who have set a fixed date to repay the loan. A closed bridging loan includes a feasible exit strategy as part of the lender’s application. If you are able to produce proof to your lender that you are able to repay the debt as soon as your transaction is completed, then a closed bridging loan is the most effective and sensible option for you. They are defined by the set repayment date and are the most common type of bridging finance option available. Closed loans are usually offered with lower interest rates and have the highest rates of approval.

What is an Open Bridging Loan?

An open-bridging loan differs from a closed bridging loan as an open loan does not require a clearly defined exit route in place to provide to the lender.

Due to the unpredictable nature of repaying an open bridging loan, they are a lot harder to arrange. However, if this is your preferred loan type, it would be in your best interest to be able to provide enough security, so that it is more likely that you are able to be approved for this type of finance. 

What is the Interest Rate on a Bridge Loan?

The interest rate on a bridge loan is generally between 1% and 1.5% per month. That being said, there are some lenders who have better rates than others. Because of this, it is always useful to shop around or use the services of brokers in order to get the best possible deal for your loan. 

How Much Can I Borrow for a Bridging Loan?

You are usually able to borrow from 80% – 100% of the property value purchase price with bridging loans. It is important to understand that all lenders are different and have different terms. If you are looking to borrow more, you may need to offer additional security in the form of an additional property or several other properties. 

Contact us to find out more

How Much Does a Bridging Loan Cost?

There are four main factors that will impact the cost of your loan and they are:

  • The term of your loan
  • The amount borrowed
  • The lenders agreed interest rate
  • Start up fees 

The general trend with bridging loans is that your costs will generally increase the longer your term is. This is also the case the larger your loan is. 

To minimise the cost of your loan, it will help your expenses if you compare the total cost of borrowing the funds, not simply the interest rate and arrangement fees on their own. 

There are many fees that are charged in addition to the interest and arrangement fee. Different lenders include their own fees. Here are some common fees charged in addition to your interest rates.

  • Exit fees
    These exit fees are payable on repayment of the loan. There are some lenders that do not charge an exit fee where some others charge from 1 to -1% month’s interest.
  • Valuation fees
    These fees are payable for surveyor’s costs in order to ensure your property is suitable security. Some lenders do not require a valuation.
  • Legal fees
    These fees are to pay lenders own legal costs while they are setting up the loan.
  • Admin fees
    These can also be labelled as asset management fees. These are costs that are payable to the lender as they handle the setup of your loan. 

Pros and cons of Bridging loans

Pros of Bridging Loans:

Bridging finance is quick to arrange. Applications can be completed and authorised quickly allowing you to obtain the funds you need quicker than you could with any other type of loan. Many property deals are highly dependent on factors that are rapidly changing within the business. Being able to obtain funds quickly can be a major attraction.

Bridging loans allow you to complete a property transaction that would otherwise not be possible.

You are able to get funds up to 100%. Usually the most you are able to borrow is 80%, however, provided the security put in place is sufficient, lenders will allow you to borrow up to 100%.

Often with bridging loans there are no monthly repayments, this allows the loan to raise capital for your business where cash flow is tight, while you have assets that can pay back the loan. 

Cons of Bridging Loans

Your home / property you put up as security is at risk if you do not keep up repayments on a bridging loan. 

There are usually several fees which you will have to pay which makes bridging loans more expensive than traditional mortgages. These fees include an arrangement fee, broker fees, valuations fees and sometimes even legal fees, before you are able to take out your loan. If you are borrowing for a long period of time, the interest charges are a lot more expensive than a standard loan.

As most loans are short term, if you have issues with your repayment method, you could potentially face major issues. Failure to repay your loan at the end of the term could have major repercussions. It could lead to your property being repossessed. 

When Would you Need a Bridging Loan?

When a buyer pulls out on an investment into your property, your finances on the offer of your next home and potential deposits could be put in jeopardy. A bridging loan will be able to tide you over until your home is back on the market and is under offer again. 

Bridging finance allows you to buy a second property before selling the first. 

As long as you can provide your lender a valid exit strategy, the money you obtain for a bridging loan can be used for a variety of business reasons from providing your business with working capital to covering cash flow issues. 

Auctions: Bridging loans allow you immediate funds when you are bidding for properties at an auction.

Bridging loans could also be used if you wanted to buy a property with a short lease. You could use the loan to buy the property, then add value by extending the lease. This would also provide a valid exit strategy. 

Refurbishment projects: You can use residential bridging loans for cash flow to refurbish a property before full capital is available.

What is a Commercial Bridging Loan?

Commercial bridging loans are similar to residential bridging loans, they are used when there is a gap in financing that needs to be filled quickly. 

For a commercial bridging loan, the overall use of the property has to be more than 40% commercial. This means that retail units with residential flats on top or at the back have to occupy more than 40% commercial space of the property.

The exit strategy for residential bridging loans usually include landlord or landlord companies to refinance the loan into a buy-to-let mortgage. This is usually done after the loan is used for renovations to make the property more attractive or suitable for rental.

For commercial units that are bought specifically by using a commercial bridging loan, the exit strategy usually involves selling or refinancing the property on to a conventional commercial mortgage after buying or refurbishing the property.  

What is a Bridge-to-let Loan?

This type of bridging loan is specifically aimed at the buy-to-let market. The loan is used to secure a property that is fully intended to rent out without having a basic mortgage organised. This loan would be based around your ability to obtain 100% rental income. This means that your potential rental income should equal your payments. 

You can use this type of bridge loan for both residential and commercial properties. The exit strategy would be to refinance the property on to a conventila buy-to-let mortgage and gaining capital by renting the property out either in part or fully. 

Contact us to find out more

Defaulting on your Bridging Loan

With all bridging finance, you have to put up security therefore, defaulting on your loan will not only affect your credit score, but will also put your asset at serious risk. Even though bridging loans are able to be authorised quickly, all lenders are very thorough with background checks and legal rights.

There are a variety of legal options your lender has at their disposal in order to compel you to pay what is owed to them. This not only includes the right to your security asset but could also include county court judgments, or statutory demand letters which would ultimately force your company into liquidation. 

Breaching the Terms of your Bridging Loan

Bridging loans have many terms and conditions that are different to standard mortgage loans.  A lot of lenders are at liberty to insert their own terms and conditions which is why it is imperative to read the fine print carefully before signing all contracts to understand the fees, repayments, charges and when they are all due. 

Click here to read our article on How to finance a healthcare business.

Business Loans for Healthcare Businesses

We’ve been helping to fund the future of British healthcare businesses for over 20 years and our team are made up of former bankers with decades of experience in the UK’s healthcare lending sector.

You can find out more about working with Samera and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

For more information on raising finance for your healthcare business, including more articles, videos and webinars check out our Learning Centre here, full of articles and webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

A Guide to Commercial Mortgages

The world of commercial loans for dental practices is now more varied than ever. Commercial property finance has many different variants, sometimes making it quite difficult to understand.

There are different platforms that each suit different projects. The usual issue is finding out which one best suits your dental business needs.

Here is our guide to understanding all there is to know about commercial property finance.  

What is commercial property finance?

Commercial property finance is the money that an individual or company obtains in order to fund the purchase or the development of a property. It is very rare for a company or an individual to always have the cash means ready to purchase a commercial property. Therefore, needing to raise money is common, especially in these cases, from a bank or other lender.

Commercial property finance can additionally be used for business expansion (adding more practices) or improvements to a property or even to help with relocating the business. 

A commercial property is one that is primarily used for non-residential purposes. For example, dental practices, surgeries, offices, factories, retail stores and restaurants. Properties that can be used either fully or semi commercial.

A fully commercial building is a building that is wholly used for commercial purposes. A semi commercial building is one that is used for both commercial and residential purposes. For example, a dental practice with flats above it.

There are different types of commercial property finance. Commercial finance was formerly known to come from mainstream lenders, usually banks, but now, there are many alternative modes of finance available too. 

Each type of building in the commercial property market is made up of five main categories. 

These five categories include: 

  • Offices
  • Retail (Stores, shopping centres, shops)
  • Industrial (Warehouses, factories)
  • Leisure (Hotels, pools, cafes, sports facilities, restaurants)
  • Healthcare (Medical centres, dentists, hospital, nursing homes)

A commercial mortgage is any loan secured on a property that is not your residence or intended for residential purposes. 

Why will I need a commercial mortgage for my dental practice?

Commercial finance ensures that your dental business, regardless of size, are able to thrive and hit their targets, rather than miss out purely because they aren’t able to generate enough revenue to expand. 

A dentist might seek commercial finance when a point of growth is impending. Sometimes the obstacle in the way of expanding your dental practice is funding, that is where commercial loans come in handy. 

There are a number of reasons as to why a company or sole trader may wish to raise commercial property finance. A few key reasons that may need to take out a commercial property loan are if you experience growth in your company, through staff or inventory, or you have purchased new equipment or you may need to extend your commercial property.

You may even need a loan in order to purchase a completely new property. Commercial finance allows a way to essentially provide working capital for dental practices.

Better access to commercial finance has paved the way for small dental practices to generate capital through these loans. If your surgery or office has become run down or needs a renovation, you may also need to raise commercial property finance to fund this. There may be cases where you need to build extensions to an existing property or grow your property portfolio.

When these purchases or improvements cannot be funded by existing assets, you may need to consider raising commercial property finance. 

Commercial loans can be used for more than just buying your business a new home, it can also be used to: 

  • Develop new property 
  • Develop existing property 
  • Extend current premises
  • Buy land
  • Commercial developments and projects 

Contact us to find out more

When will I need a commercial mortgage?

There are a number of reasons why a dentist or dental practice owner may wish to raise commercial property finance. If you experience growth in your company, perhaps your staff or inventory has grown or you have purchased new equipment, you may need to extend your commercial property. You may even need to purchase a completely new property. 

If your surgery or office has become run down or needs a renovation, you may also need to raise commercial property finance to fund this. There may be cases where you need to build extensions to an existing property or grow your property portfolio, 

When these purchases or improvements cannot be funded by existing assets, you may need to consider raising commercial property finance. 

How much can I borrow for a commercial property?

Commercial property loans are used to help raise funds for many purposes, such as buying estate for your business. The minimum amount for a commercial property finance deal is usually £150,000 and has no maximum figure. Provided you have all the requirements your lender needs when you are applying for the loans you should have no issue sourcing the funds you need to make your purchase. 

When are commercial mortgages used?

Commercial mortgages generally take over very large amounts that business loans do not allow for. For these kinds of large amounts needed for commercial mortgages, lenders need security in order to reduce risk to themselves. 

What security will I need to provide to the lender?

The main form of security that lenders like for you to provide is property types which are suitable for the lender such as residential or a commercial property. 

The lender will usually require a legal charge over the property put down as security that the finance is being raised for. Depending on the sum of the loan, some lenders consider additional security to support the loan. This could mean that you will be able to borrow up to 100% of the purchase price of the property in question. 

Commercial Mortgages Key Features

Commercial mortgages are similar to regular mortgages in many ways, but there are a few key features that make them slightly different.

There are usually no fixed rates for commercial mortgages. Your rate will be dependent upon how much your loan is and how long you wish to pay it back – amongst other factors your lender will decide on. 

You will usually pay a higher interest rate on commercial mortgages rather than regular residential ones as these types of mortgages are of high risk to lenders. However, due to this high risk you usually need to provide a property as collateral which will allow your lender to give you a better interest rate, as you have put down security. 

If you have a bad credit score you may still be able to apply for a commercial mortgage. However, you may have to pay a higher interest rate in order to make up for the high risk you are to the lender. 

Mortgages are a type of secured loan in which the property itself is often used as security/ collateral by the lender, this means that if you default on any payments, you may lose ownership of the property in question. 

Deposits for commercial loans or mortgages can be quite hefty. So before you apply for your commercial loan you need to ensure that you will be able to pay both the deposit and monthly installments comfortably. 

Lenders prefer to invest in someone who they can be assured will pay them back timely, including interest. If you have not got a lot of experience in trading, many investors / lenders will see that as a high risk. When you have markers that identify yourself as high risk such as lack of experience in trading or a low credit rating, lenders may request for personal guarantees to further ensure that they will not be losing their money.  

Types of commercial finance 

There are several types of commercial finance, the benefits and disadvantages of which depends on your needs and situation. 

Real estate loans are never one size fits all. There are various types of loans that have very different terms, rates and uses. The type of commercial loan you need to get depends on the goal of your loan and how it will be repaid. Loans are broken down into different categories from lenders. Here are some of the more common options on the market.

Refinance loan 

As a dental business owner, you can take advantage of available lower interest rates through commercial real estate refinancing loans. There are various additional fees and costs involved when you are refinancing which can make this option more costly for you. However, when you do a cost benefit analysis, they are usually quite minimal in comparison to your overall savings through lower monthly repayments and less cumulative debt (to banks/ lenders).

Refinancing can boost your profit flow through improvement or expansion of commercial properties. It can also help to pay off any pending expenses you may have.

Property Development Finance

Property development finance is usually used to cover development and building costs, refurbishment costs, but can also be used to purchase a property before renovation. Terms will vary depending on your situation and requirements. However, it is common for lenders to fund up to 70% of development costs over a 24 month term. 

Property Portfolio Finance 

If you have a number of properties in your portfolio, perhaps you own several offices or rent out several apartments, it is likely that you have several, unrelated outgoing loan payments covering all of your properties. Since handling several different loan payments schedules, you may wish to consolidate all your commercial property loan payments into one payment. Property portfolio finance can make it easier for developers and landlords to manage their outgoing debt payments.

Hard money loan

Hard money loans exclusively come from private investors. These investors will be willing to take lending risks based on the value of the commercial property itself rather than the person they are investing in. Banks base their lending on many factors of the business owner themself including their credit score to base their judgement on getting repaid. 

While most commercial loans are made to be long term, especially because of the large amount of money being loaned, hard money loans count as short term financing. They have brief loan terms from just 6 to 24 months. People often turn to hard money loans due to urgency of their situation, which often means that the interest rates of the loan are very high. It can range from 10-18% interest along with costlier up-front administration fees and deposits. 

Bridge loan

A bridge loan is a short-term loan, usually up to one year. These types of loans also have a short approval time which makes them extremely useful when you need immediate funding. It allows the client to meet existing obligations as they provide immediate cash flow. 

Bridge loans are preferable for short term investments for commercial renovations or construction. Bridge loans are also known to have relatively high interest rates and usually need a form of security.  

Term loans (long term fixed interest commercial mortgage): 

These loans are the most standard types of loans you can get. These usually come from a bank or lender and they work similarly to a home mortgage as they carry fixed rates and monthly or quarterly repayment schedules including a set maturity date. 

A term loan usually lasts between 1 and 10 years. When you apply, you need to assess how much money your business needs and how long you will take to repay the commercial loan. 

Short-term loans 

Short term business loans are best for when you need smaller amounts of money that are typically able to pay back within 18 months or less. As these loans are smaller, they have a faster approval process than term commercial loans. Short term loans can even be approved after one day! 

These types of loans are best and most useful for handling emergency repairs, restocking inventory and meeting payroll, amongst a variety of other necessary costs. 

Commercial real estate loans

Commercial real estate loans are for borrowing large amounts of money and have the longest length. These types of loans are for lending very large amounts of money and will help expand your business when you need to buy a new property, such as a warehouse or a secondary office. They are also secured by the property that your business is buying. 

Contact us to find out more

Equipment loans

This loan refers to buying an expensive piece of equipment or other assets for your business. Equipment loans are able be secured by the asset itself, therefore, your business will not have to put up any other forms of collateral. 

Line of credit

With a commercial line of credit, the lender approves your business for a maximum borrowing amount, such as £10,000. After your business has been approved you can then borrow up to this amount whenever you would like. After you repay the funds, you are able to borrow up to this same amount again. This is not a one time loan, line of credit gives you the option to borrow at your convenience. 

Commercial mortgages

A commercial mortgage is simply a mortgage used to purchase a commercial property. They are available to both limited companies and sole traders. Commercial mortgages tend to last for around 25 years and can fund up to 75% of the mortgage. The terms of the mortgage will depend on several factors, such as the profitability of the business. 

Types of Commercial mortgages

There are three main purposes that commercial mortgages can be used for:

Owner-occupied

Commercial mortgages for owner-occupiers either means that a company wants to purchase the current premise in which they operate in or they want to buy a new property to move into. 

Residential buy-to let

A common scenario for commercial mortgages is the purchase of an estate in order to be let out residentially. This is usually used by professional landlords as well as buy-to-let limited companies that are essentially set up for the same purpose. 

Commercial buy-to-let

You can use commercial mortgages for commercial buy-to-lets as well. This means you may want to buy a warehouse in order to let it out to another business to use it for commercial use not residential. This type of mortgage is very similar to residential buy to let, however, the lender will look at various more factors as it can be more difficult to rent out commercial properties to residential properties. 

Advantages of commercial property finance

A key advantage of commercial property finance loans is that you will be able to continue to have sole ownership of your dental practice. You will be able to get a large amount of money for your business without having to give up any equity. Obtaining a commercial loan is not bringing in an investor who will invest in your practice in exchange for a percentage of it. Your money will be upfront, and you will usually have to repay your borrowed money with monthly payments including interest. 

While interest rates on commercial loans are higher than most loans due to the large amount of money, anything that you pay in interest on your loan will be tax deductible. 

Commercial property finance loans usually extend over a long period of time. This gives you a number of years to pay back your loan. Often lenders are more flexible with the repayment schedule to suit your needs.

Commercial loans have a fixed repayment schedule that is suited to you and how much you are able to pay back monthly. There is no risk of unexpected increase of this repayment. The only increase added to your loan will be interest. 

The immediate benefit of a commercial property finance loan is that your dental practice will immediately obtain the money it needs to expand. This enables you to invest in your commercial property immediately, allowing you to substantially build your capital. Property value increases over time, therefore, when your property gains value, your business’ capital will also increase. 

Commercial mortgages have fixed monthly repayments. As the repayment schedule is divided over a long period of time, your repayments are designed to be  manageable for you, even if your loan is a large amount. This means that your loan will enable you to plan and grow your business accordingly, enabling you to structure the finance of your business with certainty. 

When you buy an estate with additional space, there is potential for rental income. You are able to monetise that space by renting out the surplus space in order to generate more income. Subletting any extra space in the property should be done after obtaining lender permission first. 

Disadvantages of commercial loans

A key disadvantage for commercial property finance is that a substantial amount is needed for a deposit on a commercial property loan. 

As the property you invest in will be solely yours, all maintenance, developments and general upkeep costs of your practice will need to be taken care of by you. Unfortunately this can often end up being very costly.

Property prices are continuously fluctuating and can sometimes affect the value of your property which can result in reduced capital. This could also affect your finances and future borrowing capabilities. 

If you have a variable rate mortgage on your commercial property, then any rise in interest rates will result in your monthly repayments becoming more expensive for you. 

Types of commercial real estate

Apartment buildings 

Apartment buildings are classified as commercial real estate if they have five or more living units. Any buildings that have four or fewer units inside are classed as a residential property.

Retail buildings

Retail buildings are any buildings that are selling goods. This includes stand alone shops as well as larger commercial properties such as malls and shopping centres that have multiple stores inside the property.

Office buildings

Office buildings are usually the most sought after when they are up for sale, they are also usually the most expensive. Most office buildings are located in urban business districts, which makes them prime locations, which is why they are so expensive. The further your property is from the commercial business district, the further down the prices go. 

Medical facilities 

Medical facilities include dental practices, GP doctor surgeries, hospitals (with large staffs and 24 hour, round the clock care), surgical centres, urgent care clinics (walk ins) and nursing homes (long term accommodations). 

Hotels and resorts

This category includes hotels and luxury resorts as well as casinos, big corporate chains and independent ins. 

Land developments

Land development refers to commercial real estate developers. This is turning raw, empty land into a space for future construction. If this is done correctly, there is a lot of potential for a significant financial return. 

How do commercial loans work?

If you choose to go for a commercial loan, you need to understand that you will need to pay back the loan over time as well as interest. Before your lender will invest in your business venture, whether it is a private lender or a bank, they will need to see proof that your business will be able to make its repayments. 

In order to increase your chance of getting a commercial loan, prepare documents of your income and revenue in order to support your application. Your financial statements, profit and loss margins, will help your lender be drawn to you as a successful low risk client. You may even need to value your assets to use as security to put as collateral to ensure you receive your loan.

How long does it take to secure a commercial loan?

Smaller loans are usually easier to obtain. If you have a good credit history and have all the necessary financial documents ready for your loan to get approved, it is able to get approved within a matter of days. 

For a larger commercial loan, your application may take a lot longer. It could range from a couple weeks to a couple months. It is highly dependent on the amount you want to borrow and the length of the term. For a very long term loan, the lender often would wish to perform extensive examination of your financial records to confirm the financial viability of your business over the term of the loan. Loans of very large amounts often require security as well as a deposit. 

What type of security do I need for commercial property loans?

The most common things that are offered as security for commercial loans are vehicles, property and shares. The property you put up for collateral could be your business premises or your personal property. Many traditional lenders accept only these options as types of security.

The asset you put up as security acts as protection for the lender against a potential loss if your business falls through or your are default in your payments. The assets you put up for security compensate for the unreturned borrowed money.

Contact us to find out more

How to avoid funding your business from personal assets

Commercial loans are one of the most efficient ways to fund a particular project, business venture or acquisition. You can get this loan on the simple basis of your business plan and how likely your business is to succeed. You do not need to put your personal assets in the mix to fund your estate. 

With a commercial loan it is also simply just borrowed money with interest added. Commercial loans allow you to fund your business with a loan without having to get an investor or partner to share your business with minimising your profits. The only personal assets that should be involved are the ones that you put up for security with your lender.

What is bridging finance?

Bridging finance is a type of commercial property finance which is used by companies and sole traders to quickly fund the purchase of a property. Traditional commercial mortgages can take months to arrange. Bridging finance companies can lend money much faster. The loan will usually be secured against a charge of the property you are purchasing.

How much can I borrow?

It is highly dependent on the type of property being purchased, you can borrow up to 85% of the purchase price or valuation for residential properties. You can borrow up to 80% if you are purchasing a commercial property. 

Should I compare business mortgages?

Comparing different mortgage deals will help educate you on the different types and terms there are out there. There are often people and websites who will be able to compare for you to ensure the best and cost effective solution for your business. 

Alternatively, use a commercial finance broker to do that hard work for you!

Click here to read our blog on How to finance a healthcare business

Business Loans for Healthcare Businesses

We’ve been helping to fund the future of British healthcare businesses for over 20 years and our team are made up of former bankers with decades of experience in the UK’s healthcare lending sector.

You can find out more about working with Samera and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

For more information on raising finance for your healthcare business, including more articles, videos and webinars check out our Learning Centre here, full of articles and webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

A Guide to Working Capital Finance

What is working capital

Working capital is the amount of available money a business has at its disposal for its day-to-day operations and expenses. Working capital is not the same as the overall value of your dental practice. It is not calculated by adding up everything the business owns.

Working capital is the cash or cash equivalents your dental practice has, or can raise in a year. Working capital is calculated by subtracting the value of the business’s liabilities from its assets. It is essentially the amount of money left over once a practice pays all its standing debts. 

If your dental practice is unable to meet its debts with your existing assets, you may need to apply for working capital finance.

Working capital reflects the short-term financial health of your dental practice, as well as its ability to conduct regular operations. Without adequate working capital, your practice will be unable to meet its everyday obligations. 

For instance, staffing costs, rent on the premises, marketing and taxes should all be covered by the business’s available cash – its working capital. Ant given business should not need to sell off long-term assets or borrow money to meet these responsibilities. Its ability to do so is dictated by the amount of working capital. 

Working capital represents the liquid cash which isn’t tied up in its long-term assets.

The most common definition is; the difference between the business’s current assets and its current liabilities.

Working capital vs cash flow 

Although they are similar, related concepts and are often confused, working capital and cash flow are not quite the same thing. 

Your dental practice’s cash flow is the amount of cash that moves through the business over any given period. It is the amount of money that your business can generate. Cash flow does not take into account your liabilities. Working capital, on the other hand, takes into account all your current liabilities, as well as current assets. 

A working capital ratio is a representation of the financial health of your dental practice as a business overall. It is a broad picture of your business’s ability to pay off debt in the short-term. Cash flow is more concerned with the cash that can be generated. This means you could have a weak working capital but a strong cash flow. Your business is generating a lot of money, you just owe nearly as much as you make.

Therefore, even with a strong cash flow, low working capital can make it difficult to pay your debts off on time. If this is the case, you may benefit from raising working capital finance.

How to Calculate Working Capital.

Working capital is the amount left over once your dental practice has met all of its financial obligations. Working capital can be calculated with one fairly simple equation. 

That equation is: current assets minus current liabilities equals working capital. 

The number left over is the amount of ready cash that a business could feasibly spend without having to sell off long-term assets or borrow money from a financial institution. It can often simply be the value of the entire inventory of your dental practice added to the current bank holdings. 

For example, lets say your business has £10,000 in a business bank account, a customer owes £1,000 and the business’s inventory totals £10,000. Your business has current assets totalling £21,000.

Let us also assume that the business owes £15,000 in total, spread across suppliers, debts and tax bills. 

Once the business has paid off its £15,000 current liabilities from its £21,000 in current assets, there is £6,000 left over as working capital. Although the business could raise more money by selling off more long-term assets, this £6,000 is the amount it can liquidise within a 12 month period. Therefore, the entire dental practice has a working capital worth £6,000.

Current Assets

Current Assets vs Fixed or Long-term Assets

Current assets are not to be confused with the long-term assets of a business. Long-term assets are the assets that your dental practice will expect to keep for longer than 12 months, which could include a lot of necessary dental equipment. They are essential parts of the business that cannot just be sold off to pay the tax bill. They also include assets that cannot be sold off for liquid cash in a year. 

They are sometimes known as fixed assets.

Although a piece of heavy machinery or a company car is an asset to the business, it is not included as a current asset in the working capital calculation as it cannot be quickly sold off for cash. It would also disrupt the day-to-day business operations to do so.  

Long term assets include items such as land & property, machinery & vehicles and intangible, soft assets such as copyrights and patents. Inventory will usually be included as a current asset, since it can often be expected to be sold in 12 months. However, heavier pieces of inventory may not be included and will have to be judged individually. 

Current assets, on the other hand, are the assets which can be, or will be expected to be, sold off or otherwise liquidised within a 12 month period. 

Examples of current assets include:  

Cash and bank balance 

Most businesses have some form of account with a bank or similar financial institution. Most also have some form of ready cash available. This could range from a small petty-cash stash in the office to a locked safe containing thousands of pounds. These are immediate, liquid cash which can be instantly used to fund business operations. 

Inventory 

Certain pieces of inventory are often considered current assets. Whether inventory items will be listed as a current asset or not depends on whether it can be sold off for liquid cash within a 12 month period (or before the end of the business cycle).

For instance, a warehouse full of food can be reasonably expected to be sold within a 12 month period. Therefore, it is a current asset, since within a year you know that your business will exchange those foodstuffs for liquid cash. 

However, the heavy machinery that the business used to process or harvest that food may not be expected to be sold off within that same 12 month period. Therefore, it would usually not be included as a current asset. Likewise, the property your business owns may be its most valuable long-term asset. However, you are not going to sell it off to pay a quick bill. Therefore, it is not considered a current asset. 

Contact us to find out more

Accounts Receivable 

Accounts receivable are the bills owed to your business (but not yet paid) for goods or services already rendered. For example, if you sell a customer a car and the deal includes them not having to pay any money for the first 6 months, you have an account receivable. This can often include long term dental services that can be billed at the end of a treatment.

Although you do not have the money in your business’s bank account at the moment, it is owed to your business. You may not be able to call it in earlier, but you know that it will be in your bank account in 6 months – unless the customer defaults! 

As long as accounts receivable are expected to be paid within a 12 month period, they are considered current assets. 

Marketable securities. 

Your dental business’s marketable securities are the debts and securities that you can expect to redeem or trade in with a 12 month period. If they are not redeemable within that 12 month period they are considered a fixed asset. They are financial instruments which can be easily liquidated into their market value in cash in one year.. 

Examples of marketable securities include things such as Government bonds and treasury bills, certificates of deposit and stock. 

Prepaid expenses 

Prepaid expenses are the expenses paid by the business before a good is received or a service is rendered. For example, leasing a piece of equipment or office space, or even insurance payments are considered prepaid expenses. 

Prepaid expenses are considered current assets if they are expected to be completed within 12 months. If your business leases a piece of equipment for less than 12 months, it is considered a current asset. If it is leased for longer than 12 months, it will be considered a fixed asset. 

Since the expense has already been paid, this means other working capital can be used for business operations. If you prepay £12,000 for 12 months rent at £1,000 a month, that £1,000 still shows up on the balance sheet. However, since you have already paid it, you essentially have £1,000 extra as working capital.

Current Liabilities 

Current liabilities are the financial obligations a business has that it is expected to pay back within a 12 month period. These are the debts that a business needs to pay back within a year, in other words, the business expenses. Debts that you are not expected to repay within that year are not considered current liabilities, they are known as long-term liabilities. 

Current liabilities are normally paid off using the current assets. Most businesses will have several current liabilities owed at the same time to suppliers and creditors. Most of the everyday costs of operating a business are paid monthly or as needed, and are therefore considered current liabilities. For instance, utility payments for the offices or warehouses, materials and supplies or business loan repayments. 

Examples of Current Liabilities 

Accounts payable

Accounts payable are the debts owed by your business for goods or services that have been already received or rendered. They are the outstanding invoices to your suppliers and vendors that are due to be repaid within 12 months. 

Any debt that is due within that period is considered a current liability. Debts that are not expected to be repaid in a year will not be listed on your balance sheet as current liabilities. 

Accounts payable will cover debts such as supplier invoices, utility bills and invoices from external companies such as legal and marketing services. 

Short term debt

Short-term debt, otherwise known as operating debt, are the short-term financial obligations your business has. Operating debt usually takes the form of short-term loans from a high street bank or another financial lender. They can also be issued as commercial paper. 

These debts are normally taken out to cover short-term operating costs of the business, such as supplies, bills and invoices. If the debt is expected to be paid within 12 months, it will be considered a current liability. 

If you have debt with a loan term of 10 years, that is considered a long-term debt. However, in that final year, it will appear on the balance sheet as a current liability since it is due within 12 months. 

Dividends payable

If your dental practice has shareholders who are paid dividends, they may be included are current liabilities on your balance sheet. Once it has been decided that a certain amount should be paid in dividends to the shareholders, they are considered current liabilities until they are paid. 

Accrued expenses

Accrued expenses are the expenses which the business knows will have to be paid within a year. They are listed as expenses on the balance sheet but have not yet been paid. Therefore, they are considered current liabilities. 

Accrued expenses can cover a range of different payments. For instance, accrued expenses could cover interest payments, including interest for long-term debts, payroll and tax.

Working capital ratio 

It is common for a dental business’s working capital to be expressed as a ratio, the working capital ratio. This is a numerical expression of the financial health of the business. A healthy working capital ratio would be between 1.2 and 2.0. 

Working capital ratios are calculated by dividing your business’s current assets by its current liabilities. For example, let’s say your business has current assets totalling £750,000 and your current liabilities come to £500,000. We divide the two and get a working capital ratio of  1.5. 

If the same business’s liabilities raise to £650,000, the working capital ratio changes to about 1.15. This business is approaching negative working capital, i.e. having more in liabilities than it does in assets.  This business may need to apply for working capital finance to pay its debts.

However, if the liabilities fall to £250,000, the working capital ratio is 3. Although it may appear at first sight that the higher the ratio the better, this is not necessarily the case. With £500,000 more in assets than it does in liabilities, this business has an excess of working capital that it should be using to grow the business. 

What can cause changes to working capital

A dental practice’s working capital is affected by a wide range of different factors. You can expect your working capital number or ratio to change almost daily. 

The most obvious are times when you makes large short-term purchases or sales for your practice. Purchasing new inventory or office supplies will cause your working capital to decrease by increasing the current liabilities. Likewise, selling off property or inventory will increase your working capital ratio by increasing current assets. 

The ratio will also change due to long-term assets and liabilities changing in status. For example, a 25 year mortgage is a long-term asset until the 24th year. In that final year the remainder is expected to be paid within a 12 month period, therefore making it a current liability.

There are also instances where customers default on their debts and you may not be able to bring in the accounts receivable that you had planned on. Changes to markets may also mean that your inventory is subsequently valued at less than you purchased it for. This reduces its value and creates a discrepancy with the balance sheet. 

If your practice is struggling to pay its debts, whether this be due to an increase in the liabilities or a decrease in the asserts, you may need working capital finance.

When you will need Working Capital Finance

Working capital finance loans are those loans taken out by any business including dental practices to cover short-term expenses. They are not taken out to cover purchases of long-term assets or investments such as property. Businesses apply for working capital finance loans when their current assets and cash flow cannot cover necessary short-term payments. 

For instance, a business may take out a short-term working capital loan to cover expenses such as payroll, tax payments, interest payments or inventory purchases. 

In a perfect world, all businesses and dental practices would use their own liquid cash or cash equivalents to cover these expenses. However, if a business has a weak cash flow or insufficient working capital in the form of current assets, they may choose to borrow the money to make payments in the form of working capital finance. 

Alternatively, businesses may not wish to relinquish any of their current assets to pay liabilities and may prefer to borrow money to do so. 

Businesses that experience a high degree of seasonality in their operations, for instance hospitality companies or businesses based in a tourist-centric region can often benefit from working capital finance. If they are unable to cover expenses in their off-season, a working capital loan can allow the business to make necessary purchases. 

Dental practices looking to grow quickly, or in the process of doing so, may also apply for working capital finance loans. 

Contact us to find out more

The term working capital loan is essentially an umbrella term for any short-term business support loan used to cover business expenses like payroll and tax.

As such, there are several different types of loans and methods of financing that can raise the working capital required to make important purchases and payments.

Options for raising working capital finance include: 

Commercial Loans 

Commercial loans are perhaps the most common form of working capital finance. These are simply commercial loans that have been received from a financial lender such as a high street bank.

Any loan that is intended to be used to make short-term purchases, as opposed to long-term investments, can be considered a working capital finance loan.

Equity Finance

Many dental practices choose to use equity financing to fund short-term payments. Equity finance is when a business sells part ownership of the business itself in the form of shares in exchange for capital. 

Although you can raise a lot of quick capital with equity financing, you will lose at least some control over the operations and strategy of the business. 

Equity finance can be raised in a number of ways. For instance, venture capital investors or business angels will purchase shares in exchange for capital. Similarly, you can float the business publically and offer shares out to the wider public. 

Mezzanine Finance

Mezzanine is a hybrid form of financing that acts as a middle ground between traditional commercial loans and equity finance. Mezzanine finance takes the form of a normal commercial loan that is guaranteed with business equity. 

In other words, you receive a loan in return for regular payments with interest. If you are unable to meet these payments, the lender has the right to receive payment in the form of equity. You will give up part ownership of your business to the lender if you are unable to repay in full. 

Overdrafts

It can be possible to obtain a business overdraft from certain banks and sources of alternative lending.

Overdrafts of your dental practice are, in effect, a form of unsecured loan. However, being unsecured does limit how much you can borrow. You will need to demonstrate a strong credit history and ability to repay loans on time to be able to secure meaningful funding in this way. 

However, should you be able to do so, overdrafts can be a good way to quickly raise short-term capital. 

Revolving credit facilities 

Revolving credit facilities can be another way to raise short-term working capital finance for business growth and necessary payments and are similar to overdrafts. A revolving credit is essentially a line of credit offered to businesses from banks and other financial lenders. 

A certain limit of credit will be agreed upon between the business and the lender. The business in question, i.e. your dental practice can proceed to then borrow anything up to this limit at any time. Interest is charged on the outstanding debt until it is paid. 

Revolving credit facilities are ongoing agreements between creditor and debtor, they are not a fixed loan amount like a traditional commercial loan. 

Revolving credit facilities can be a great way to regularly and reliably raise short-term capital.

Invoice finance

Invoice financing is a way for dental businesses to free up working capital that is currently tied up as a current asset in the form of outstanding invoices. 

When businesses sell to customers, this is often done so on credit. This is especially true for larger businesses who do not expect customers to pay immediately or for big dental treatments that are paid in instalments or after the treatment has been completed to its end. Instead, the customer is issued an invoice and they pay on or by an agreed upon date.

However, since the goods or services have already been purchased, their value is now tied up in that invoice. Until the invoice is paid, that value is absent from the business. 

Invoice financing is a way to free up that working capital by selling the invoice to an invoice factoring company. These companies buy the invoice for a charged percentage. The owed business can then be paid the value of the invoice quicker than if they had waited for the customer to pay on the due date. 

This frees up working capital that would otherwise be tied up as a current asset.

Asset Refinancing

Asset refinancing is a way for dental businesses to free up working capital that is currently tied up in their long-term assets which many dental practices usually have in spades. Through asset refinancing, your business can gain access to some of the cash value of the asset without having to sell it off. 

Refinancing allows you to borrow money against equity in the asset. This means that you can borrow money against assets you do not fully own. Your loan will be valued against the value of your equity. 

When you refinance an asset, you transfer ownership of it to the lender. However, you still maintain the use of it and the lender does not take it away. Once the loan has been fully repaid, full ownership of the asset is returned to you or at least your portion of equity is returned to you. 

If you are unable to repay the debt, the lender takes full control of the equity you laid against the loan. 

Asset refinancing can be a great way to gain access to value currently tied up in your fixed assets, whilst still keeping them in the business. 

Merchant cash advances

Merchant cash advances are a relatively new method of accessing working capital finance. Merchant cash advances allow businesses to borrow money valued against their average monthly profits. The loan is then repaid as a percentage of revenue each month. 

If a business makes lots of transactions using a credit card, merchant cash advances allow lenders to forward money based on the monthly credit card takings. This makes them a great option for retail businesses that have a good cash flow but not that much in the way of valuable assets. 

If your business made £10,000 last month, lenders will usually agree to lend you the same amount. You usually cannot borrow more than you make in an average month as you will be less able to pay the loan. 

Once the money has been advanced, the balance is paid back each month as a percentage of revenue.

Government support

In certain cases and in certain healthcare industries (including dentistry), you may be able to apply for government support to help cover working capital finance for your dental practice.

Many local councils offer financial support and advice to local businesses. It is worth contacting your local council to find out what support and signposting services they offer. You may qualify for a grant or loan directly from them. In other cases, they may direct you to external organisation who may be able to help.

The UK Government is also currently offering help with working capital finance to exporting businesses. The Export Working Capital Scheme aims to help businesses who are operating in the UK but exporting goods outside of the nation by assisting access to working capital finance.

The UK Government will guarantee up to 80% of risk to the lender to help fund pre and post shipment costs.

Click here to read our blog on How to finance a healthcare business.

Business Loans for Healthcare Businesses

We’ve been helping to fund the future of British healthcare businesses for over 20 years and our team are made up of former bankers with decades of experience in the UK’s healthcare lending sector.

You can find out more about working with Samera and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

For more information on raising finance for your healthcare business, including more articles, videos and webinars check out our Learning Centre here, full of articles and webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

A Guide to Start Up Finance

Your knowledge of the dental industry itself as well as the knowledge, skills, and the energy you put into your dental practice, are all vital components to enable your business to be successful. However, the success of your dental start up is also dependent on your funding.

Having the right start up finance is crucial if you plan for your start up business to succeed. 

Startup loans from Banks

For many dentists starting out on their own with their own practice, especially ones that have equity that can be borrowed against (e.g. a house), a bank loan might seem like the most logical option for you.

If a business opportunity presents itself to you as a dental associate, but the only thing you need is a substantial cash injection in order to take it up, then there are many banks offering various options of unsecured and secured start up loans. It is worth remembering that banks are strict about lending to start ups so be sure to be fully prepared when applying for one. 

Don’t be afraid to shop around (or use a commercial finance broker). You may have been with the same bank for years, but that does not mean that they will be available to provide the best deal for your business loan. Look at what every bank has to offer you, they all offer different perks and terms while taking out loans and some may be better than others, which is why it is best to shop around and find what is best for you. 

Banks such as Barclays are ready to explore different loan alternatives that are right for you if your business plans prove to be viable. If you are approved for a loan up to £100,000, you will usually have the money within 48 hours of signing the paperwork, giving you the means necessary to take your business to the next level.

These types of startup loans are helpful if you need a quick and straightforward way to finance your business. Most banks give you a fixed rate for the life of the loan so there is no need to worry about any sudden changes in interest rates. Repayments are spread over the course of 1 to 10 years. 

Click here to read our article on 5 Reasons to Use a Commercial Finance Broker

Government-backed startup loans

There are many government grants and loans available to small businesses and dental start ups, helping save money, lower start up costs and helping small enterprises grow. Government backed start up loans are not the same as grants. It is important to note that with government loans, you will have to pay all the money back, often including interest. 

These loans differ from small business bank loans as they are personal loans for business purposes. They are also unsecured loans which means you do not have to put up any assets or estate as security to receive the money. 

Borrowers can access between £500 and £25,00, payable over one to five years at a fixed 6% interest per annum. 

Government supported start up loans are available for entrepreneurs looking to start a business. The scheme itself is designed for individuals over the age of 18 who have a viable business plan, but no access to capital to fund their ideas.

A start up loan is a type of finance that is specially designed to help new businesses that have been trading for less than 24 months. A start up loan is in its basic form a type of personal loan except it is solely for business purposes and is also backed by the government. The loan is available to individuals looking to grow a business in the UK. The scheme can provide loans to businesses in every sector. 

When you apply you are usually paired with a dedicated and skilled business advisor who will support you throughout your application. If your application is successful, the loan comes with the option of 12 months free mentoring. 

How much does it cost to start up a business in the UK? 

Unfortunately, there is no whole figure that we can give you to determine how much money you will need to finance your start up business in the UK. Costs can vary greatly depending on the location and industry you want to get into, amongst many other factors; all of which you need to consider before you begin.

Once you have the answer to the location and industry and you have a viable business plan, it is important to figure out whether you have access to the start up finance that you will need to not only get your business started but also keep it running. 

The Office for National Statistics (ONS) disclosed that less than half of the UK businesses that started up in 2011 were still going five years later. The two main reasons for the high rate of business failure is due to unexpected costs and poor budgeting. So here are a few of the most important costs you will face and have to be prepared for when raising start up finance. 

More often than not these are costs that some people may class as ‘hidden costs’. These are some of the costs many dental practice owners forget to factor in when first starting up their practice henceforth giving them financial trouble further down the line. 

Many new business owners do not realise that they need to factor in professional business and legal advice to their start up finance before beginning their new venture, especially when the start up is in the healthcare industry.

It is worth researching what kind of fees you will need to pay for these services and also consider how much money you will need to set aside on legal advice and accounting services. All of which services are vital to many businesses, including any start ups. 

There are many solicitors and accountants that will give you a free consultation, this allows you to pre-plan and budget for the fees that you will need to pay them in the future. If you expect your finances to be particularly complex, it may be a good idea to pay an accountant a retainer fee so you can consult them whenever you need advice. 

Contact us to find out more

Business Premises

Unless you are planning to run your dental practice from your home, you will need to find yourself business premises. There are usually very few new businesses and start ups that will already own their own premises. It is more common to lease or rent from a commercial landlord. Therefore, you will often need to consider commercial property costs when applying for start up finance.

Commercial leases often operate on a quarterly rather than monthly basis, especially those for retail premises. This payment method means that instead of facing a smaller bill every month, you are faced with a hefty bill every three months. This can end up being quite a big expense for many new businesses and is one of the main reasons retail businesses run into financial difficulties therefore, it is imperative that you plan for these expenses beforehand. 

Read more about commercial property financing here.

Company incorporation 

You might want to set up a limited company, depending on your circumstances. Doing this directly through Companies House is relatively quite cheap. However, most people choose to use an intermediary firm to complete the paperwork. 

The process in itself can start at less than £10 for basic online services but usually can run up to hundreds of pounds, especially if you choose to use a registered office. 

It is also important to note that The Companies Act requires company directors to provide their ‘usual residential address’ to Companies House. It is important to note that if you do choose to provide your home address, this will be on public record. Another option would be that you could choose to use an address hosting service with a solicitor or formation agent however, this will often incur another fee. 

If your business is in need of an office space rather than retail premises a good option for you may be serviced office leases. These leases offer you shorter agreements, ability to pay monthly, as well as a lot more freedom and scalability. Serviced leases do include business rates, which can be an added financial burden over a regular lease. 

It may now seem that working from home will be the cheapest option for you but even while working from home, there will be setup costs. These will include computer equipment, office furniture and the addition to your monthly utility bills as you will be at home most of the day. 

Marketing

Marketing is one thing that many new businesses overlook as an expense when raising start up finance. To make sure that your new venture receives the attention and cash flow it needs to get off on the right foot and succeed. You need to make sure that people know about your business and what it offers.

Old fashion techniques such as word of mouth won’t help you drive sales in the way you need them to take your business off the ground in the first couple months of your business. You need to ensure whatever marketing option you decide, it gets the message out there and makes people know about your business and what it offers. 

There are various types of marketing available to you and the costs of each varies considerably. Online marketing such as PPC is one of the most effective types of marketing in this day and age and many online marketing techniques are fortunately quite cheap while many offline marketing methods such as billboards and direct mail involve big initial outlays.

However, there are also quite expensive online marketing techniques to also keep in mind such as social media ads and influencer sponsorships that are proven to be very effective marketing techniques.

An example of a cheap effective way to market is to optimize your website to make sure that you are well placed in search engine results. This is a very low cost but highly effective way to generate business. 

There are so many businesses that do not allocate enough budget towards marketing and that is usually the fund that gets cut when when start ups are strapped for cash. You may think that dentistry is an service that is always need needed and will therefore always provide revenue, unfortunately with so much dental competition out there, marketing your dental practice and dental services is mandatory for your dental practice to succeed, sometimes this means hiring marketing experts to help.

It is important to note that you may be right with thinking that your money will be better spent with tangible aspects of your business that seem more important such as buying stock, leasing an office or buying equipment. But, your business venture will struggle to attract customers and make money unless you make them aware of your business to begin with. This is why you should think very carefully before you cut your marketing spend.

Remember, you need to spend money to make money!

Equipment, stock & tools

If the business you are trying to start up is a retail business, stock is most likely to be one of your biggest expenses. However, if your business is a dental practice, you will need to set aside funds for equipment that you will need. Most suppliers will offer you 30 days credit, some will even offer more depending on the circumstances. You can take this credit period and use it to your advantage to help ease any cash flow problems during your first month of business. You may also want to put off buying stock until the last possible moment to ensure you make the most of your credit period. 

The amount you spend will depend on the nature of your business. Regardless of whether your business is in the retail sector, or the healthcare dental industry, it is important that you shop around first to ensure that you get the best deal from suppliers. 

Again, regardless of the sector that you are operating in, tools and equipment is necessary for all businesses, even if it is just a computer and some desks, and they can be a big upfront expense that you will need to consider and budget for in your start up finances.

Read more about Asset Finance here.

Business travel 

Often, travelling comes with starting your own business, dentistry doesn’t necessarily require many flights and long road tips but while you are travelling for meetings to seeing clients, it is important to factor travel costs into your business expenses, remember, you are able to claim back any deductible costs in your tax bill

Business travel includes the costs of public transport, or maybe even buying a commercial car or van. If you are buying a new vehicle for business purposes, remember that you need to include all these associated costs in your cash flow plan. Buying a new vehicle is a big financial spend that is accompanied with other expenses such as fuel, road tax, insurance, breakdown cover and loan repayments; to name only a few.  

Business Insurance  

For most businesses, you will need insurance from the first day you begin operating. Without it, you may risk hefty financial expenses if you are ever in the unfortunate position that something goes wrong. Business insurance isn’t always very expensive, but it is important to get the right type of insurance to cover your business just in case. 

The main types of insurance to consider are public liability insurance, emperors liability insurance, and professional indemnity insurance. There are also other insurance options available to you that can protect your assets such as tools and equipment as well as your premises. 

What is a business plan?

In the simplest form, a business plan is essentially a map of your business that outlines the journey of your business venture, your goals and specific details on how you plan to achieve all the goals you have set. Do not get caught up with the idea that a business plan has to be a long, formal document as if it is some type of essay that will get graded.

Maybe that was the way it was once upon a time but, that just isn’t the case anymore. You don’t need the business plan to be excessively long with big words that make you sound fancy and smart. Your plan needs to be succinct, to the point and you need to make sure that whoever is reading it understands that you have thought of every possible expense, and every single small subset that will potentially be part of your business. 

At its heart, a business plan is just a plan of working out how your business will actually work and become profitable. It will also include clear steps of how you’re going to make it succeed. 

To be clear, in your business plan, especially for start ups, you need to define your business goals. From the beginning, establish clear objectives with actual, realistic, measurable results. Link high-level goals and initiatives that are realistic and achievable to upcoming work, show how the work you will do will deliver value. The sole purpose of your business plan is to help break any uncertainty in the reader’s mind about your potential business. Including aspects such as sales projections, expense budgets and carefully thought through milestones.

It will help to include how you have articulated the foundational elements of your business strategy. Visualise where your company is headed and base it solely on real numbers and statistics. As mentioned earlier, you need to set budgets and add financial data to your plans. Estimate revenue, costs and projected business value. These figures will allow you to make better, more informed expense decisions and report investments in a meaningful and accurate way. 

It will become pretty obvious to certain people that you don’t know how much money you need and when you need it if you haven’t categorically laid our projected sales, costs, timing of payments and expenses on your business plan. Whether you need to convince friends and family to invest in your new venture or investors and banks, these numbers need to be included to ensure that you are someone who is worth investing in. 

For start up companies, the business plan should be focused on explaining what the new company is, what it is going to do and how it is going to accomplish the goals you have set out. The most important aspect that your business plan needs to include is why and how you are the right person to achieve your goals. 

Contact us to find out more

Starting a business with poor credit history 

Accessing capital is necessary for business ideas that are looking to grow and become profitable. Usually, start-up loans or line of credit is the most usual, traditional and obvious place to find the funding that you need but many new businesses find themselves knocked back from funding applications because of their poor credit history. The first step you need to take is to know whether you have a poor credit history or bad business credit. 

Firstly, it is important to understand that having bad credit is not the same as having no credit at all. If you have no credit history, lending becomes lightly simpler for you. You just need to demonstrate that you have a viable business plan for your dental practice that is worth investing in. A poor credit rating can affect your ability to get a start up loan from mainstream lenders, such as banks. Luckily, here are various alternative ways to secure a business loan as well as repair your bad credit history so finding funding in the future is easier for you to obtain. 

A start up loan usually means that you have no previous trading history. 

Can I qualify for a small business loan with bad credit?

YES!

While poor credit will hinder your chances of securing start up finance with many traditional lenders, it does not end your quest for funding. Having bad credit history means that you need to change who you go to get your financial capital from, it doesn’t put you out of the game for good. There are still plenty of start up finance options available to you now more than ever, even if you have a bad credit history. You need to be mindful that while some lenders will still lend you money, due to your credit history extra security may be needed to put in place as collateral as well as higher interest rates. 

Who lends to start up businesses?

There are many different kinds of lenders who will help fund start up dental practice; both traditional and more contemporary lenders are now available to suit your individual needs best. It’s a great time to be a start up right now because, thanks to online lending companies and a pledge from the UK government to support small businesses, there are so many options available to you beyond traditional high street banks for start up finance.

Where can I get start up funding?

There are a few different options available to you other than tradition banks to help fund your startup. Here are a few: 

Banks 

A bank loan is capital that you borrow from a bank over a fixed amount of time. Applying for start up finance through a bank is still the most traditional way to obtain a loan to help start up your business. These loans can be secured or unsecured, depending on your circumstances and business plan, both options may be available to you. 

Bank loans protect your cash flow from the impact of large purchases and help your business get off the ground with fixed monthly repayments. Banks are no longer like robots with cue cards reading off a script to decide whether you are worthy of a loan or not. Most banks look at your business plan, your previous relationship with them (E.g debit/credit accounts) as well as you as an individual and give you a personalised quote from that. In most cases you can find out whether you are likely to even get approved before you apply. 

Remember, an amazing business plan is not just pivotal for you to create a clear vision for your practice but is instrumental if you are to win funding from the bank. Ensure you provide as much information as possible about how the money will be used. 

A huge benefit from borrowing from banks is that you retain full equity in your company and the bank does not have a say in how it is run. Most banks also offer complete applications that can be carried out online and if you are approved, you can receive the funds immediately during working hours.

Government scheme

The government start-up loans scheme has already lent for £100 million in funding start ups. This scheme not only gives money to these businesses, it also understands that being an entrepreneur may mean that you lack some necessary business experience to help your company become profitable which is why the scheme pairs applicants with a Delivery Partner.

This individual who you are paired with is accompanied with the skills necessary to help the start up business become approved and as successful as possible. This individual will help in creating a business plan and will continue supporting the business even after the application process. Those of whom are granted the loan will be paired with another individual who will become their mentor to guide them as they start their business. As this is a loan, not a grant, the loans must be paid back within five years, often with interest.

Crowdfunding 

Crowdfunding is becoming an increasing popular way to raise capital for start up funds. If you are unfamiliar with crowdfunding, simply it is a way for businesses to get small amount of funding from a lot of people to raise the funds they need rather than traditionally borrowing a large sum from one or two lenders. 

By listing on crowdfunding websites such as kickstarter or indiego.com, your proposal can be seen by masses from hundreds to thousands each of whom can pledge as much or at little money to your business as they want. Essentially it’s similar to donating however, crowdfunding is not a catch-free capital. 

Equity based crowdfunding means that in return for someone’s investment you trade equity in your business and there is also reward based crowdfunding where you have to offer something to your investors in return for their investment, this could be anything from free tickets to your launch event or sending them your product for free to try. 

Loans from not-for-profit lenders

There are organisations that provide an alternate source of funding. Dental businesses can apply for up to £25,000 in funding and similar to the government start up loan scheme, individuals will be paired with an experienced mentor/ business advisor who can help them with their application as well as any further guidance needed. 

Peer to peer lending

Peer-to-peer lending is another fairly new way to obtain the funds you need for a startup. It is similar to crowdfunding where there are a number of investors on an online platform that you can reach. The majority of these peer-to-peer lenders have online loan applications and also have loan calculators so you can set the loan amount and term that suits you best and you can see beforehand what your monthly repayments will look like.

After you have applied to peer-to-peer lending for start-up funding you can find out if your application has been successful, with most lenders, within as little as 24 hours. If your application is successful, your loan will be posted on their website where investors will be able to pledge if they would like to invest. The funds will then be released to you and you’ll start monthly repayments. 

Click here to read our blog on how to finance a healthcare business.

Business Loans for Healthcare Businesses

We’ve been helping to fund the future of British healthcare businesses for over 20 years and our team are made up of former bankers with decades of experience in the UK’s healthcare lending sector.

You can find out more about working with Samera and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

For more information on raising finance for your healthcare business, including more articles, videos and webinars check out our Learning Centre here, full of articles and webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

A Guide to Acquisition Finance

What is Acquisition Finance?

Acquisition finance is the capital that is obtained for the purpose of buying another business. 

Obtaining acquisition finance is a vital part of the natural cycle of many businesses. It is often necessary to require acquisition finance when a dental practice has successfully started up and grown its client base to a point when it is then time to grow the business by purchasing another practice. It then needs to raise funds in order to complete the transaction. 

By acquiring another company, a smaller company can increase the size of its operations and benefit from the economies achieved through the purchase. An acquisition can help your dental practice in many ways. For example, it can help your dental practice: move into a new market segment, increase the client base, expand, gather knowledge, and improve their output. However, these opportunities often come with big expenses. Bank loans, lines of credit and loans from private lenders are all common choices for acquisition finance. Other types of acquisition finance also include start up loans (government funded), debt security and owner financing.

The business market is always changing and has gone through many significant changes over the last decade however, the biggest changes within the dental industry have occurred within the last year due to the pandemic. There are now various new lenders available for acquisition finance, new deal structures and new lending criteria. 

How to raise acquisition finance

There are many ways to finance dental practice purchases. Most purchase transactions are structured using some of these methods. It is perfectly viable to only use only one method if that is sufficient enough for you however, in many cases, some of these options are used in conjunction to finance a business acquisition. The methods you chose will be the ones that best suit your needs and business transaction.

  1. Using your own funds

    To use your own cash reserve is one of the simplest ways to finance a business acquisition. These funds can come from your savings, estate income or home equity.

    Although using your own funds is a very effective debt free way to complete the purchase, it is uncommon for an individual to acquire a business using their funds alone for the purchase. Instead most buyers use their personal funds in combination with business loans or with seller financing. The large personal funds of an individual or company can work as leverage to them allowing them to purchase larger, more established dental practices.
  2. Government loan

    Another option to source acquisition finance is to get a loan or grant that is certified from the UK government, available dental practices as well as many other businesses and industries. These loans are often referred to as start up loans with the intent to help your dental businesses grow. Unlike a business loan, this loan is an unsecured personal loan. They are government backed loans and charge a fixed rate of 6% per year. The term to repay the loan can range over a period of 1 to 5 years. The advantage of this type of loan is that there are no application fees and no early repayment fees either.
  3. Bank loan

    Getting a conventional loan such as a term loan from a commercial bank to raise acquisition finance can often seem like the easiest option to fund your practice purchase, but it can be very difficult. Usually, as a rule, banks lend funds against existing assets rather than against business plans. Therefore, to get a loan from a bank, you usually must have substantial assets and a good credit history at the least. For most conventional borrowers, the best option available to allow them to get the funds they need is to get a bank loan guaranteed by their existing assets.
  4. Leveraged buyout (LBO)

    A very common financing structure to buy a smaller dental practice is a leveraged buyout. Leverage buyouts are the acquisition of another company using a significant amount of borrowed money in order to meet the cost of acquisition. The assets of the company being acquired are often used as collateral for the loans, along with the assets of the acquiring company. In a leveraged buyout (LBO), there is usually a ratio of 90% debt to 10% equity.
  5. Seller financing

    Another common way to source acquisition finance is to ask the seller themselves to provide financing. In this case, the seller provides you with a loan that is amortised over a period of time. The proceeds that you retain from the business will be the funds that allow you to pay back the loan. Business buyers like seller financing because it is a lot easier to obtain than conventional financing, with the bonus benefit that it can also be cheaper.

    On average, sellers are usually willing to finance 30% to 60% of the agreed upon sale price. There are very few sellers that will finance more than that. However, it is highly dependent on what type of buyer you are. If you are a strong buyer with substantial assets as well as a large down payment, then there is a chance that there will be a seller that will be willing to finance a higher percentage.

    Like any other type of finance, the seller will only provide financing for you after they have done their due diligence on you. Your credentials such as your credit, assets, business plan and experience will all be assessed before you will be provided any funding. Experience within the dental industry itself is vital, having experience being a dental practice owner will work very well in your favour.
  6. Assumption of debt

    There are two common ways to acquire a business. You can either purchase the assets or the stock. Buying the assets ensures that you the only thing you are purchasing are the assets themselves without any of the ‘bad liabilities’ for example, future lawsuits. However, if you buy the stock, you get all the assets of the company, its liabilities as well as all the risks involved. 

    Most asset purchases involve the transfer of some assets and liabilities. This point is important because part of your payment to the seller may be the assumption of existing business debt. This process can sometimes get complicated, as you often need the approval of the debtors before assuming the debt. 

Contact us to find out more

What is a “No-Money-Down” Opportunity?

There are often entrepreneurs who look to acquire businesses for “no money down.” This means that these entrepreneurs are hoping to get 100% external lender or seller financing. To clarify, for all intents and purposes, these transactions do not exist.

From a seller or lender perspective, they would need a pretty big incentive to be giving someone 100% financing.

While some transactions could meet this criteria, the odds are as likely as winning the lottery. In other words, “possible, but not probable.” It’s best to prepare yourself to put a substantial amount of money down.

Acquisition Finance and Closing Costs 

It is important to remember that getting financing for your dental practice usually increases your closing costs. These closing costs will include your contribution to the purchase of the business and will directly come from you, the buyer. The size and type of business you are looking to acquire is heavily dependent on the amount you need to budget for closing costs. The costs vary but as a rule it is best to budget at least 10% of the purchase price for closing costs however, if you are able to allow for 20%, that would put you in a much better position. 

What is a management buy-in (MBI)?

A management buy-in (MBI) is the acquisition of a business by a management team or individuals external from the current company on sale.  

MBIs usually require external funding from banks, private lenders or private equity investors. After these investors contribute to the acquisition of the company, they will be entitled to a share of the profits if the company becomes profitable. 

A management buy-in team often competes with other purchasers to buy the company. The competitors often vary but it is usually in the best interest of the company to allow an internal acquisition (MBO) rather than external (MBI) to take place.

After the acquisition goes through, the buying managers may replace the current board of directors with their own representatives. An MBI can vary from 100% acquisition of a business to a majority controlling stake in the company. 

The process of MBI

The first step that will need to be taken is that an external team will need to gather all the necessary information about the company it intends to purchase. This includes an in depth market analysis of the company as well as its buyers, products, suppliers, sellers and its competitors.  

An important part of this step is to find out about any other competing buyers who are interested in purchasing the target company; many dental practices for sale often have a lot of competitive buyers. Once this step is completed, the external management will begin negotiating appropriate selling prices with the vendors. 

Advantages of Management Buy-Ins

In the case that the current owners and management team of the practice in question are not able to effectively manage the company, then an MBI can be a convenient win-win situation for both buying and selling parties. The new management will be able to offer new insights into growing your practice further and may also have better knowledge and experience which they can use to revitalise the company. 

Having experience and knowledge of the sector of the company you are looking to acquire will benefit you immensely, this is why many associate or principle dentists succeed exponentially when they move on to being practice owners. This knowledge will enable you stand out and make you appear to be a great candidate amongst competitors if you have that experience and knowledge behind you.

New management will bring new contacts and opportunities for a company, often bringing in new management and ideas to a dental practice will help revive it and bring new clientele. 

A new management regimen may also motivate current employees as well as bring in ‘new blood’ especially within heath care practices. The change of management could change the entire company morale and client/ patient experiences, particularly if the company is performing poorly.

Disadvantages of Management Buy-Ins 

The reason that an MBI is needed is usually because management lacks the financial power to buy a business outright, which is very common. This usually means that if management do decide to buy, then they might require additional financial help. This typically comes from a bank or private equity fund, which then introduces additional debt to the company and spreads equity thinner amongst investors. 

Debt repayments can reduce profits significantly, they also reduce the money available to pay dividends to shareholders. 

Many investors tend to want to exercise some level of control over the company. In turn, this results in management having to give up some control over the company for investors to be able to have their say. 

Man with credit card borrowing money online

Although having new management can help change things in a company for the better, it can sometimes also have the adverse effects. The new management may fail to bring the necessary growth of the company that was expected by their arrival.

As new management comes in, a management style change is inevitable. In some cases, existing employees do not appreciate the change. It could decrease morale and make them feel demotivated creating further problems down the line. 

Contact us to find out more

Business Acquisitions Often Use Multiple Sources of Funding

It is common to use more than one source of acquisition finance to purchase a business, a lot of the time it is necessary. In addition to the funding needed to acquire the company, partners may want to include a line of credit or a factoring line to handle cash flow after the sale closes. There are other ways that you can potentially structure the transaction depending on the nature of the business and its assets. 

Funding a Management Buy-In 

Most MBIs are financed through a combination of debt and equity. There are other sources such as deferred loans that could also be used. 

Equity will typically comprise ordinary shares and redeemable preference shares. The investors and management of a company will usually subscribe to shares in the holding company in a typical private equity transaction and its subsidiary will act as the bank debt.

The cost of a complete management buy-in is comparable to what it would cost to buy the entire company. It is very rare that a management team will have the funds without needing external funding to aid them in buying a company. 

Acquiring such businesses does produce high costs, however it may be assuring to know that lenders may be sympathetic to new owners. You should aim to invest in a dental practice that is already performing successfully as you can avoid the costs and risks of setting up a new venture in its entirety. By taking over a practice that is already operating successfully, you can avoid the liabilities and costs that may come when taking over a business.

There are a few ways to deal with these costs after a price has been agreed. Usually to fund the transaction, it requires a combination of debt and equity derived from either the buyers, seller or financiers and can be agreed in numerous ways. Many of these funding sources can also be used in conjunction with one another.

Buyer contribution

These are funds that come from the management team themselves. Usually they are required to put up their own personal funds initially to prove their commitment to the transaction. The buyer’s contribution can be raised by selling assets or gaining a second mortgage on an estate that they own.

Asset Refinance

Putting up the assets of the company such as premises and stock or dental equipment (x-ray machines) can generate a high level of funding. Using the leverage of these assets of the company to buy the company itself can prove to be particularly effective especially to businesses with large investments in property. A re-mortgage on a commercial property can raise considerable finance for a business and an additional benefit is that the costs can be spread over 20 years.

Vendor Loan

The vendor themselves can help provide acquisition finance to fund the transition if they choose to donate a sum of their equity as a loan to the company, this will eventually be repaid to them at a future time.

Private equity

Although private equity firms may be able to advance acquisition finance for an MBI transaction, they may also be at liberty to impose strict terms and conditions attached to their financing. These could involve them controlling how certain parts of the practice should be run.

Business Loans:

There are business lenders who may be able to offer acquisition finance as unsecured loans that are repayable over the course of three to five years. A larger amount of money would then be transformed into a secured loan which necessary security of assets from the business would be to be added. 

MBIs and private equity 

A vast majority of buyouts are financed by private equity. MBIs will almost certainly involve private equity. MBIs usually always involve a private equity backing because they represent a higher risk to an investor than a MBO. 

It is common for a private equity loan to involve a loan component as well. Private equity funds invest money in an MBI in return for a proportion of the shares in the company. 

It is important that management teams are aware that private equity funds may have different goals. Private equity backers have the sole intention to make a return on their investment, usually in three to five years. This contrasts to management, they tend to hold a longer term view as this could potentially be their entire career.

Private equity backers like many others, will also want to conduct extensive due diligence before making an investment. 

Contact us to find out more

What is BIMBO?

A BIMBO is a buy-in management buyout, It is a form of leveraged buyout (LBO) where both incoming and existing management are involved in acquiring a company. The existing management represents the buyout portion while the new management represents the buy-in portion. 

What are the disadvantages of BIMBO?

In order for BIMBO to work, new and existing managers must be able to get along. It is natural for new managers to have new ideas and plans that they wish to implement right away while existing managers will try to maintain their business like they always have. These differences between managers can often cause a lot of friction. This can often result in many complications. Pronounced conflicts between managements will distract from the core business and will result in inhibiting profits.

The disadvantage of BIMBOs is that they usually involve an increase of debt of a company. Management needs to ensure that after the acquisition of the company, the fundamentals of the business are adequate enough to service the debt acquired and not cause any further financial stress for the company. 

What is a Management Buy-Out (MBO)?

A management buy-out (MBO) occurs when the management team of a dental practice collectively uses their own assets to buy all or a significant amount of shares in the company they work for. The buy-out is usually achieved through each member’s own funds, however it is common for individuals to require external financial aid from banks or private investors. This could further entitle external parties to a share in the companies profits, should the company make any gain.

Why do MBOs happen?

Often MBOs occur when a shareholder is about to retire or give up/ sell their shares. This gives the management team the perfect opportunity to become shareholders within the same company. 

MBOs are usually a quicker and more efficient option for maintaining a business than to sell the business to a third party. It is also in the best interest of the business itself as the management team already knows the business well, this ensures that they will be able to take over the dental practice completely and continue its growth.

Having an existing management take over requires less time to conduct due diligence, and it presents a relatively low risk path to owning the said business. The current management understands what the company needs to be successful going forward. 

Advantages of MBOs 

The process of an MBO offers advantages to all parties involved. In particular, it allows for a smooth transition of ownership with little impact on the continuity of the business itself; the dental practice can resume its business continuously as normal. 

The management knows the company already, this reduces the risk of failure or unanticipated problems that an MBI acquisition would usually have. 

Current employees are less likely to have a problem with the acquisition change of the company as the status quo is likely to be maintained during the takeover. 

If the company was to be sold through a third party, management may not wish to continue with the business therefore an MBO might prove to be the only mutually acceptable sale route that would benefit the company. 

Disadvantages of MBOs

Management usually lacks the financial power to buy the company outright. This means that a third party seller may be harder to attract. If management decides to buy in then they usually require additional financial funding from banks or private equity funds. This extra funding is typically needed in MBO acquisitions. 

Although it is needed, the extra funding needed for MBOs introduces debt to the business and spreads equity a lot thinner amongst investors. 

Debt repayment affects the books significantly! The repayments may also hinder the company’s ability to pay dividends to shareholders. 

The more equity is spread, the more likely it is that investors want a more controlling say in the company, resulting in management depleting their control in the company in the future. 

MBOs need a lot of working capital to allow the company to be successful in the future. For an MBO to be sustained, the company will need strong fundamentals. This means that the practice itself will need to generate adequate profits on a day to day basis to sustain itself as it develops and provides adequate return for stakeholders, as well as being able to support ongoing capital expenditures. 

What are the differences between MBO and MBI 

The main difference between a buy-out and a buy-in is that the management is external to the company. Simply, this just means that during an MBI, there will be a lot more due diligence required than an MBO. 

Usually, it is thought that the management that is internal to the company will be advantageous as these employees are already experienced and well versed in the company’s affairs. While a management taking over that is external to the company, will usually not be as informed as an MBO offer would be.

Although there are character differences between MBOs and MBIs, the legal structure between the two types of acquisition are usually very similar. 

Contact us to find out more

Finance operations 

Unfortunately, obtaining acquisition finance to buy the business is just the beginning. You will still need to ensure that you have enough funds to effectively operate the business successfully once you acquire it. It is common that people will need additional operational funding however, it can be very difficult to try to get funding immediately after purchasing the business. To ensure you have the funding that you need, it is best to negotiate it while you are negotiating the purchase. 

This section discusses common ways to finance operations.

Line of Credit

An effective way to access acquisition finance is by using a business line of credit. This revolving facility allows you to borrow the money as and when you need it and it can be paid down as your cash flow improves. Although qualifying for line of credit can be very challenging, it is one of the most flexible ways to finance the operations of a business. 

Self-Funding

One of the easiest ways to finance operations is to use your own cash reserve. This reserve can initially fund your acquisition however, it should eventually be financed by the cash flow of the business. Rather than paying suppliers and shareholders immediately, you can also improve your cash reserve by paying your suppliers on net-30 or net-60 day terms.

Invoice Factoring

Lastly, one of the more common reasons businesses experience cash flow problems is due to their cash reserves running low. This problem is common for companies that sell to commercial clients. This setback can seriously impact operations.

The solution to improve your cash flow is by using invoice factoring. It is easier to get than other types of funding and can work well with corporate acquisitions. This solution finances your slow-paying invoices as well as improving the overall cash flow of your business.

What is a leveraged buy-out?

A leveraged buyout, commonly referred to as an LBO, is a type of transaction that companies use to acquire other businesses. Through LBO the business is purchased with a combination of equity and debt. The company’s cash flow is the collateral used to secure and repay the borrowed money. Essentially the buyout is funded with debt. 

The deal is structured so that the target company’s assets and cash flows are used to pay for most of the acquisition finance cost. The purpose of an LBO is to allow a company to make the acquisition they want without having to commit a lot of capital to it. 

Advantages of a Leveraged Buyout

The main advantage of a leveraged buyout is that the buyer gets to spend less of their own money.

An LBO can also lower a business’ taxable income, so the buyer will see tax benefits that they have never previously had. 

The buyer will see a bigger return on equity than any other financing buyout scenario as they are able to use the sellers assets to pay for the financing costs rather than their own. 

An LBO can improve a company’s market position and even save it from failure. 

For the seller, a key advantage of an LBO is the ability to the company even if it is not at its peak performance. As long as it still has a cash flow it can be sold. 

Disadvantages of a Leveraged Buyout

From a buyer’s perspective, LBOs have some risks. The main disadvantage is that there is a very slim margin for error, if the company is not able to pay the debt, they will get no return at all. 

If the returns of the acquired company do not exceed the debt financing costs or the cash flow is not sufficient enough to handle the high interest rates exacted by the LBO, there is a high bankruptcy risk. LBOs are especially risky for companies in highly competitive markets. 

LBOs have high fixed costs of debt. Often LBOs result in having to downsize a company.

LBOs are not appropriate for firms with high growth prospects or high business risk. 

Click here to read our article on How to finance a healthcare business.

Business Loans for Healthcare Businesses

We’ve been helping to fund the future of British healthcare businesses for over 20 years and our team are made up of former bankers with decades of experience in the UK’s healthcare lending sector.

You can find out more about working with Samera and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

For more information on raising finance for your healthcare business, including more articles, videos and webinars check out our Learning Centre here, full of articles and webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

A Guide to Asset Finance for Dentists

Asset Finance for Dentists – Webinars and Podcasts

What is Asset Finance?

Asset finance is the funding raised by a company to either purchase or hire assets. Dental practices all require some kind of asset in order to operate. Whether this be general office equipment, specialised machinery or even furniture.

In many cases, companies do not have the up front cash required to purchase these assets, especially since most of the necessary equipment can be quite expensive. This is especially true of start-up businesses that have not had time to build up reserves of capital.

It is also true of more established businesses that are experiencing cash flow issues, or maybe wish to purchase extremely expensive equipment. 

Fund the Purchase with Asset Finance

In these circumstances, many dental businesses will approach commercial finance providers to attempt to source asset finance to fund the purchase. Asset financing can work in a number of ways and the terms of the loan will vary depending on the provider. 

For instance, the asset finance provider may provide you the money to buy the asset outright. On the other hand, they may prefer to buy the asset themselves and then loan the asset to your company.

At the end of the loan term the asset could become property of the borrowing company. On the other hand, the asset finance company may wish to keep the assert themselves once the loan term is completed.

Asset Finance vs Asset-based Finance.

Asset finance is similar to, but not to be confused with, asset-based finance. Asset finance is the money raised by a business to purchase or hire equipment for the company. However, asset-based finance refers to the security put up against a loan as a guarantee. 

Asset-based lending is often used by companies which need short-term lending to alleviate problems in cash flow, such as payroll issues, and to keep the business running on a day-to-day basis. 

Secure a loan using an asset

Asset-based finance is a method commercial finance lenders use to guarantee their investments. Asset-based finance is, in essence, a process whereby a lender will secure their loan using one of the company’s assets. 

Lenders will usually use assets such as specialised equipment or machinery, company vehicles, any property the company may own and even accounts receivable.

These assets are used to guarantee the loan repayment. In other words, if the borrowing company is unable to pay back the loan in full or on time, the asset-based finance lender will seize the asset (or assets) and sell them in order to recuperate their loss.

Asset and Asset-based Finance Together

Asset finance and Asset-based finance can also be used in tandem. If you are a start-up dental practice with minimal working capital, or perhaps an established practice struggling with liquid capital or cash flow problems, you can use asset-based finance to purchase equipment. 

In these cases, businesses use the asset itself which they are borrowing to buy as the collateral. For instance, you may be a dentist opening your first dental practice and you need to purchase expensive x-ray machines.

What do you do if you don’t have tens of thousands of pounds lying around to buy it? 

You would use asset-based finance to raise the money you need to purchase the machine. However, the lender is also using that x-ray itself as the collateral asset. This means that if you are unable to pay back the loan, the lender will seize that x-ray and sell it on to recoup the loan. 

Contact us to find out more

What is an asset?

To understand asset finance it is important to understand what an asset is.  An asset is essentially any piece of property owned by a business, not including land or a building.

The assets a business owns will vary from company to company and industry to industry. 

Most businesses will need general office supplies such as desks, chairs, IT equipment and even smaller items like stationary. A dental surgery will have dentist chairs, special lighting and a lot of specialist equipment. These are considered business assets and can be purchased using asset finance or asset-based finance. 

Company vehicles can also be purchased using asset finance. These vehicles could be large lorries and trucks used to haul heavy goods or equipment around the country. They could also be small private cars intended solely for business related travel. 

Industry-specific companies will also need to purchase specialised machinery and equipment for their day-to-day operations and these are often incredibly expensive.

For instance, a dentist’s private practice will need surgical chairs, the medical equipment and general office supplies.

However, there will be incredibly expensive, specialised machinery such as x-ray machines, scanners and digital imagery equipment, machinery for manufacturing dentures, implants and retainers and much more! 

Durable, Identifiable, Moveable and Saleable

That is not to say that lenders will fund any product you tell them you wish to purchase. Generally speaking, to be eligible for asset finance, an asset must meet criteria known as the DIMS criteria. 

DIMS stands for – Durable, Identifiable, Moveable and Saleable. These criteria are used by asset finance lenders to determine whether the asset being purchased is suitable for asset financing and, thus, a safe investment for their money.

Assets eligible for financing are often split into 2 categories. Hard and soft assets. 

Hard Assets

Hard Assets are those assets which are durable and have a good resale value at the end of their term with your business. Hard assets are most often used as security against asset-based finance due to their high resale value.

In other words, if you fail to pay the debt, hard assets will be able to pay it off instead. Hard assets include items such as heavy machinery and vehicles. 

Soft Assets

Soft assets are those assets which have a greatly reduced resale value at the end of their lease term. Due to this fact, soft assets may require additional security on the part of the borrowing party to lower the risk of the borrower, and thus secure the loan.

Soft assets include things such as IT software and medical equipment which cannot be reused. 

Very few businesses, especially newer start-ups, will be able to raise the funds themselves necessary to purchase this much equipment. Established dental practices will a healthy client base will find it easier to fund new equipment with their cash reserves.

However, expensive equipment can eat up entire emergency cash reserves and it may be advisable to borrow the money instead to protect the day-to-day running of the business. 

Vehicle Finance

Vehicles are a very common asset purchased through asset financing. Vehicles are expensive but necessary aspects to many businesses. However, it can be difficult to raise enough money to buy one, let alone an entire fleet. 

Most vehicle dealerships will offer their own payment structures and schedules. However, it may be more economical to purchase the vehicle outright using an asset financing company and paying them instead.

This is because asset financing companies are usually more flexible on the kind of loan terms they can offer. 

Asset finance can make a lot of sense when purchasing vehicles for several reasons. Firstly, businesses have the option to purchase expensive assets without having to raise the full amount first.

Additionally, since many asset finance terms mean that the finance company retains ownership of the vehicle, companies are protected from maintenance fees and depreciation. 

Why use Asset Finance? 

Asset financing is used by all kinds of businesses but is especially helpful for dental practices as it helps aid the purchase of necessary equipment for their operations. Limited companies, social enterprises, charities and sole traders are all eligible to apply for and secure asset finance.

Historically, asset financing was mostly used by larger companies. However, in recent years the threshold for the amount that can be applied for has lowered.

Borrow money to buy an asset

There are a multitude of reasons why a company or sole trader may use asset finance to grow their business. The simplest reason for most businesses is that they cannot afford to buy the asset outright.

The more expensive assets such as specialised heavy machinery, cutting-edge technology and vehicles can be almost impossible to purchase in one lump sum for many businesses.

This is especially true of newer start-ups and small to medium enterprises (SMEs). Without the large reserves of capital that the more established businesses have, it can be extremely difficult to fund the early purchases of necessary equipment.

Spread payments over a number of months

In these situations, it might make more sense to apply for asset financing. This spreads the cost of the asset over a more manageable term. 

Instead of paying out a large lump sum, asset financing allows you to spread the payments out over several months. This allows you to better plan and budget your company’s cash flow.

Save capital for an emergency

Even if your company, or you as a sole trader, have the cash available to purchase an asset, you may still wish to apply for it via financing. One of the reasons for this is, simply, that you may need that money for other things.

The asset in question may be essential to your business however, purchasing it immediately with your only available cash reserve is not essential.

Why give up your rainy day fund or disrupt your company’s cash flow when you can apply for asset financing and spread the cost?

What happens if you purchase a new company car with your reserve of capital and the next day your first company car breaks down.

Now you’re back to only having one car. Only this time you don’t have that rainy day fund to get it repaired.

However, if you had purchased or hired the new car on asset financing, you’d still have the ready cash to take the broken car to the garage! 

Contact us to find out more

Advantages of Asset Financing. 

There are several advantages to using asset finance to purchase or loan equipment, as opposed to using your own capital. 

Reduce upfront costs

Using asset finance reduces the upfront costs incurred by your business by spreading the payments for the asset over a period of months.

This helps to keep your business’s cash flow stable by splitting the cost into smaller lumps, instead of incurring one large payment.

Plan your financial year

Since these payments are then fixed, it makes it easier for you to budget and plan your year financially. Spreading the cost also frees up your business’s capital to be used in other areas of growing the business. 

If you’re purchasing a high-value hard asset, you can also benefit from using the asset itself as security for the loan.

Secured loans

As we mentioned earlier, you do not need to put up additional security for the loan in many instances. This is especially true of expensive, hard assets.

Instead of putting up extra collateral for the asset, you simply hand the asset over to the lender in the eventuality that you cannot make the payments.  

You don’t pay for maintenance

Another great advantage of using asset financing is that any servicing, maintenance or repair costs that need to be undertaken during the life of the asset are incurred by the provider.

This protects your business from sudden, unforeseen costs when things break down or go wrong. 

Using asset-based finance can also allow your business to secure better loan terms than they otherwise would.

Secure better terms than traditional lending

Using your company’s assets to secure a loan with an asset finance provider can help you secure far better terms (for instance, in terms of interest rates or payment structure) for a loan that you would from a high street lender such as a bank.

Don’t pay for depreciation

Most assets suffer some level of depreciation during their lifetime – in other words, a reduction in their value. This is true for everything from machinery to vehicles.

Since most companies and individuals will not pay full price for an item that is second hand, you will not be able to recuperate the full value of an asset.

A common saying is that a car loses around 10%-20% of its value the second you drive it off the lot. In many cases, the asset purchased via asset financing is in fact owned by the commercial finance lender.

The lender purchases the asset and then leases it to the business. Therefore, the loss in value is in fact incurred by the lender, not your business. As the actual owner of the asset, they actually suffer the loss in value. 

Disadvantages of Asset Financing

Despite its advantages, there are some drawbacks to using asset finance that must be highlighted. 

If you cant pay, they’ll take it away

Firstly, the most obvious drawback is that you will lose the asset should you be unable to make your payments, which if happens, will be an obvious hinderance to your day to day dental practices.

Whether you have purchased the asset and have simply borrowed the money to do so, or your lender has purchased the asset and you are leasing it from them, you do stand to lose the asset in the eventuality that you cannot meet the loan terms. 

You may not own the asset

Similarly, since many asset finance structures mean you do not actually own the asset, you do not always have full control over its usage. This can mean that modifications may need to be approved by the lender.

This also means that if you need to raise some quick cash for your business, you will not be able to sell the asset on.

Therefore, the asset does not provide quite as much financial security than it otherwise would have if you had bought it yourself. 

It’s not a short-term fix

On top of this, asset financing is primarily used as a long-term solution for cash flow issues when it comes to purchasing assets. Short-term asset financing is incredibly rare.

Most agreements are termed for at least 1 year. If your business is looking for short-term financial assistance then asset finance would not be a workable option in most circumstances. 

You may need extra insurance

Lastly, although any servicing or maintenance work that is covered by the agreement will be funded by the lender, not all such repair work will be covered.

If your asset is damaged in a way that is not covered in your agreement, your business will incur the costs of any work that needs to be done.

You may need to buy additional insurance on top of your loan payments to protect against this. 

Contact us to find out more

Different types of Asset Finance

Generally speaking, asset finance is split into 3 categories; Hire Purchase, Finance Lease and Operating Lease. However, there are several other types of asset finance alongside these. 

Hire Purchase

Hire Purchasing in asset finance is an agreement whereby the borrowing company pays for the asset in instalments over time and retains the option to purchase the asset at the end of the term.

In other words, you hire the asset until the end of the loan term when you then purchase it. 

During the loan term period, the asset finance company will have ownership of the asset. Until the loan has been fully paid off, your company will only be hiring the asset.

Terms can usually last between 1 and 5 years and it is common for a 10% deposit and the full VAT to be paid upfront. Once the loan has been paid off, your company will have the option to purchase the asset outright.

Under some hire purchase agreements you can show the asset on your balance sheet at the beginning of the loan term.

There are several benefits to using Hire Purchasing for asset finance. Firstly, it allows your business to purchase necessary equipment and supplies without the need to pay huge amounts upfront.

Since you are spreading the cost of the asset over a 1 – 5 year loan term, you can avoid unnecessary disruptions to your company’s cash flow.

You can also often benefit from fairly low (10% is quite common) deposit payments. Additionally, the loan is secured against the asset itself. You will very rarely require any added form of collateral to guarantee the loan.

Finance Lease

A finance lease agreement is a type of asset financing whereby the asset finance provider purchases the asset outright and then leases it to the borrowing company.

This differs from hire purchasing in that the borrowing company never gains full ownership of the asset, they only ever rent it. Once the asset is returned to the asset finance company, it is either sold off or leased off again.

Finance lease agreements usually last from 1 to 5 years. During this time, the borrowing company will have full control and responsibility for the asset.

Unlike hire purchasing, where the asset provider is liable for maintenance and servicing, the borrowing company is liable under a finance lease agreement.

In other words, the borrowing company takes on all of the risks of owning the asset, alongside all of the rewards i.e. usage. 

Finance leases usually cover the usable life of the asset. At the end of the loan term, there are generally 3 options.

  1. Return the asset to the asset finance company. 
  2. The borrowing company enters into a second lease arrangement 
  3. The asset is sold off and proceeds split between both parties. 

Operating Lease

An operating lease is a business contract hire which allows companies to lease an asset for just part of its usable life.

Whereas finance leases last for the economic lifespan of the asset, operating leases only last for a fraction. This means that there is much greater resale value at the end of the lease period. 

Since they are shorter term leases, operating leases allow businesses to loan assets for shorter periods of time. This makes them good options for companies who need to regularly upgrade equipment or who only need quick usage from an asset.

The shorter loan term also means that the borrowing company takes on none of the ownership risks associated with the asset. All servicing and maintenance costs and responsibility rests with the asset finance provider.

Another advantage is that since the asset appears as a rental on the business balance sheet, it can be offset against company profits. 

At the end of the rental agreement, the asset provider will take back ownership of the asset. This can either then be re-hired in a second loan agreement or loaned out to a new company. 

Contact us to find out more

Asset-based Refinancing 

Refinancing is a process businesses can use to raise capital against their assets, using them as security. Businesses can sell their assets to a refinancing company for a lump sum.

The refinancing company then loans the asset back to the original owners. The business then pays back the lump sum (plus interest) by effectively renting the asset back from the refinancers. 

Refinancing is used by businesses who are rich in assets that need to raise quick liquid capital. By refinicaning against their assets, they can raise money without losing the use of their equipment.

Most assets with a high value can be used as security to refinance. Since the loan terms depend purely on the value of the asset, the company’s financial situation and credit history will rarely affect the loan terms. 

Balloon Finance

A Balloon Loan is one that allows the borrowing company to pay back a large lump sum as part of their payment schedule, usually towards the end of the loan term.

Smaller monthly payments are made, as per a regular loan agreement. However, Balloon Loans include a much larger amount at the close of the term. 

Balloon Loans allow companies to keep their initial deposit and monthly payments lower than they otherwise would be. By paying off the majority (or at least a large portion) of the loan towards the end, you can keep initial costs down.

This makes balloon financing a great option for businesses that have limited capital initially, but are confident of raising enough to pay a larger amount at a later date. 

Balloon Financing is a great way for start-ups and early-stage businesses to purchase the assets they need to grow their business. 

Click here to read our blog on how to finance a healthcare business

Annual Investment Allowance

The Annual Investment Allowance scheme allows businesses to claim back tax relief against assets they have purchased. If the assets qualify for the scheme, you can claim back 100% of the value of the asset in tax relief.

It is important to note that you may need to pay tax if you then sell the asset after claiming Annual Investment Allowance. 

You can claim Annual Investment Allowance on most assets purchased, such as heavy machinery.

However, some assets cannot be claimed. You cannot claim AIA on company cars and other vehicles, assets gifted to the business or items purchased before or for reasons other than usage in the business. 

The Annual Investment Allowance amount can change from year to year so it is advisable to contact your accountant or check the UK Government website here.

Annual Investment Allowance can only be claimed during the period in which you purchased the asset.

If the asset has been purchased in a hire purchase agreement, you can claim for as yet unmade payments before you actually start using the item. It is important to note that you cannot claim on interest payments.

Join the Samera Alliance Buying Group

The Samera Alliance is our growing network of dentists, practices and leading industry suppliers, designed to help you save money, grow your profits and build a better dental business.

Join today for free to be a part of our dental buying group, which gives you access to exclusive discounts and offers on the consumables, equipment and products you need to run a successful dental business.

You’ll also get better rates and terms for a wide range of services like HR, IT, utilities, insurance, legal services and much more!

Business Loans for Healthcare Businesses

We’ve been helping to fund the future of British healthcare businesses for over 20 years and our team are made up of former bankers with decades of experience in the UK’s healthcare lending sector.

You can find out more about working with Samera and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

For more information on raising finance for your healthcare business, including more articles, videos and webinars check out our Learning Centre here, full of articles and webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

11 Top Tips to Manage your Cash Flow in a Crisis

In times of financial instability, small businesses are usually one of the earliest and hardest hit. There are many issues that can arise from global uncertainty, but amongst the most problematic are disrupted cash flows.

A cash flow crisis can be caused by any number of factors. Disruptions to supply lines, a reluctant customer base or increased expenses.

In the midst of a global emergency such as the Covid-19 crisis, all of these factors can strike at once.

With a cash flow crisis looming for many small businesses, these top tips should help mitigate some of the risks and help manage the cash flow in your business.

Borrow money

One of the simplest ways to manage problems with cash flow in your business is to borrow money to cover the shortfall.

As long as your business has the required credit, you can borrow emergency funds in the form of a short-term loan from a number of different lenders.

You may need to secure your loan with business assets. Consumers are constantly being warned not to panic buy. Similarly, you as a business should not panic borrow!

Always shop around for the best price and seek expert advice when you need it so you get the best deal you can.

Although borrowing money can be a good way of covering unforeseen emergencies, it is not a sustainable fix if you have a prolonged or systemic cash flow problem.

If your cash flow problem is on-going and not caused by sudden, external changes, borrowing money will only delay an inevitable crisis. 

Action Points

During periods of financial instability, small businesses often face cash flow crises due to disruptions in supply chains, hesitant customers, or increased expenses. Amid global emergencies like the COVID-19 crisis, these challenges can intensify. To manage these risks, businesses can consider borrowing money through short-term loans, provided they have the necessary credit. However, while borrowing can address immediate needs, it’s not a long-term solution for sustained cash flow issues. It’s crucial to compare offers, seek expert advice, and explore other strategies to mitigate risks and safeguard business operations.

Man with credit card borrowing money online

Apply for a Bounce Back or CBILS Loan

If your business cannot avoid cash flow issues, you may need to obtain a loan to inject some cash into the business.

Although there are several avenues you can try, the UK Government are currently offering 2 loan schemes to struggling businesses – Bounce Back loans and the Coronavirus Business Interruption Loan Scheme (CBILS).

Coronavirus Business Interruption Loan Scheme (CBILS)

The CBILS was launched by the UK Government to provide financial support to small to medium enterprises who have been negatively affected by the Coronavirus and subsequent lockdown.

The scheme is only open to businesses based in the UK with an annual turnover of up to £45 million.

Under the CBILS, businesses can apply for support loans up to a value of £5 million.

However, to be eligible for support your business must prove that it would be financially viable if it were not for the current circumstances regarding COVID-19 and that it has been negatively affected by the virus and lockdown.

You will also need to prove that your business was not classed as a ‘business in difficulty’ on December 31st 2019.

CBILS loans are currently being offered through the normal lending channels.

You can apply by approaching your usual lending platform, such as the high street banks. Over 50 lenders currently participate in the CBILs, and this includes the main retail banks. 

Bounce Back Loans 

The Bounce Back loan scheme was recently introduced by the UK Government following criticism of the CBIL Scheme. Businesses have struggled to obtain funding under this scheme for a number of reasons.

One of the main reasons for this has been the information and documentation required, as well as the financial checks, to obtain the loan. Many businesses are being rejected for funding through the CBILS.

In response, the Bounce Back loan scheme has been launched as a simplified and quicker way for businesses to secure emergency funding. 

Through the Bounce Back Loan Scheme, businesses can apply for funding between £2,000 and £50,000.

The UK Government will guarantee 100% of the loan and you will not be required to pay any interest, or make any repayments during the first 12 months. Loan terms will be offered at up to 6 years. 

Small to medium enterprises who are based in the UK and have been negatively affected by the pandemic are eligible to apply. 

Like the CBILS, the Bounce Bank Loans Scheme is being offered through the regular financial lending channels, such as the major retail banks. 

Action Points

If your business is facing cash flow issues, consider applying for a loan through the UK Government’s schemes – Bounce Back loans and the Coronavirus Business Interruption Loan Scheme (CBILS). CBILS offers support loans of up to £5 million to UK-based businesses with turnovers up to £45 million, provided they demonstrate viability without COVID-19 impacts. Meanwhile, Bounce Back Loans offer simplified, faster funding between £2,000 and £50,000, with the government guaranteeing 100% of the loan and a 12-month interest-free period. Both schemes are accessible through regular lending channels, including major retail banks, and aim to provide relief to small to medium enterprises affected by the pandemic.

Contact us to find out more

Seek investment capital 

Similarly to borrowing money, you can seek investors who are willing to buy equity in your business.

Although this differs from borrowing money in that your business does not take on debt, it does mean that you will be giving up some level of control or ownership of your business – depending on how much capital you raise.

It is important to remember that you are in effect taking on a business partner. It is essential that you find the right partner to invest in your business!

Do not rush into any agreements, do your research on your potential partner and understand that this partnership may be permanent. 

Action Plan

Consider seeking investment capital as an alternative to borrowing money, where investors purchase equity in your business. While this avoids accruing debt, it involves relinquishing some control or ownership. Choose investors carefully, as they become long-term partners in your business. Conduct thorough research and ensure alignment of values and goals before committing to any partnership agreements, as they may be permanent.

Get paid quicker

Solving a cash flow crisis does not necessarily mean getting more money into the business.

You can also alleviate cash flow problems just by streamlining the flow of money within the business.

By making processes smoother and more efficient, you can more effectively move money through the business and ensure you have a steady cash flow.

One way to do this is to speed up how money flows into the business.

If you do not already have some form of online payments set up for your customers, you need to provide this functionality as soon as possible.

Not only do most consumers expect online payment as standard nowadays, instead payment can ensure you are not waiting on customers or banks for money you have earned. 

You can also start requesting deposits for payments. If you already request deposits, you may also think about increasing the amount.

Charging deposits means you get some instead, ready cash into the business for a product or service – even if it is not the full amount! 

Another way to speed up payments is to send your invoices earlier and more frequently than you would otherwise do.

Sending invoices immediately after services rendered decreases the amount of time you spend waiting on payment.

You can also negotiate to send incremental invoices over a period of time, rather than a final invoice upon completion of the service or product.

This will allow you to keep up a smaller, steady stream of funds within the business. 

Action Points

To improve cash flow, streamline processes for faster money movement. Offer online payments, request or increase deposits, and send invoices promptly. Negotiate incremental invoicing to maintain a steady cash flow. These strategies ensure a consistent flow of funds and mitigate cash flow challenges.

Pay money slower

Another way to improve your cash flow is to delay money leaving the business.

If you have regular expenses then you may need to think about renegotiating the payment structures you currently have in place.

If, at the moment, you pay for a particular service monthly, you may be able to revise this to a quarterly payment structure.

This can help buy time by letting you keep much needed money within the business until absolutely necessary. Do not pay bills and invoices until they are due.

Paying early may earn you goodwill (and you can use this to negotiate a better payment schedule), but it will not help you in a cash flow crisis. 

Contact your utilities providers (such as electricity and internet) and see if you can negotiate a better deal. Remember, most businesses want your business.

If you let them know you are thinking of moving to a competitor, they will usually try to get you a better deal to keep your custom. Try it out! 

Action Point

Delaying outgoing payments can help preserve cash flow. Renegotiate payment schedules to pay expenses less frequently, such as switching from monthly to quarterly payments. Avoid paying bills before they’re due, as this drains cash unnecessarily. Negotiate better deals with utility providers by leveraging competition. Holding onto funds longer ensures greater financial flexibility during cash flow challenges.

Ask for a payment holiday

Another way to reduce your monthly outgoings is to ask for a payment holiday from your lenders. This can include any financial institution to whom you currently owe monthly payments, such as your banks.

Some banks are currently offering 3 month holidays on certain loan terms, others are even offering 6 months! 

Of course, whether or not you can agree to a payment holiday will depend on your bank and your loan term.

However, many banks and financial lenders are being fairly generous and understanding at the moment so it is certainly worth trying! 

You can also try asking for a payment holiday from your landlord. Again, whether or not you can get your landlord to agree to a deferred payment will depend on your landlord and your ability to negotiate.

Like the banks, some landlords are being generous at the moment so it is worth contacting them and seeing if a deal can be reached. 

For instance, you may offer to pay monthly instead of quarterly to ease cash flow. Alternatively, you may ask to pay smaller amounts each month and agree to make up the balance when lockdown ends. 

It may be a long shot for some, but it is worth everyone trying!

Action Plan

Requesting payment holidays from lenders and landlords can ease financial burdens during tough times. Many banks offer three to six-month breaks on loan repayments while negotiating with landlords for deferred rent payments or adjusted schedules is also helpful. Proposing alternative payment arrangements, like monthly rent installments or partial payments with future settlement plans, may be advantageous. Though results vary, exploring these options can provide much-needed financial relief.

Smiling couple agreeing a bank loan

Explore alternative supply chains

Whilst you are trying to renegotiate prices with your suppliers for a better deal, you may also want to think about exploring different supply routes.

To take the Covid-19 crisis as an example; if some of your supplies come from China, you may want to think about finding an alternative source.

Not only do socio-political crises have huge impacts on trade and supply, consumers may also be put off by the idea of their goods coming from an affected region.

Try to make sure your products and resources are brought in via safe, stable and affordable supply chains. 

Increase prices

Another obvious way to improve cash flow is to increase the cash. One of the easiest ways to do this is to increase your prices for goods and services.

Naturally, a lot of small businesses are wary of increasing prices for fear of driving away customers.

This is especially true of newer businesses. If you have a reliable and returning customer base, you may be surprised at how many are willing to accept a price increase.

If your customers appreciate your business and what it offers, they will be willing to pay a little bit extra.

You can also make a big deal about lowering your prices again once the problem has subsided!  You could also offer a VIP or Gold Service option for your services or products.

By offering a little bit of exclusivity to your services, a small percentage of consumers will be willing to pay a large price for the VIP treatment. 

Make sure you do your research into your competitors. Do not price yourself out of the market and keep your business competitive. 

Action Point

Exploring alternative supply chains can mitigate risks during crises like Covid-19, ensuring stable access to resources. Increasing prices, albeit cautiously, can boost cash flow, with loyal customers often accepting moderate hikes. Offering premium services at higher rates and promoting eventual price reductions post-crisis can attract select clientele. However, competitive pricing adjustments are essential to maintain market competitiveness.

Cut expenses

A quick, easy win for solving cash flow problems is to cut unnecessary expenses. It is essential that you regularly review your business expenses even in times of calm.

In times of crisis, it is doubly important. There is no business out there that does not have unnecessary expenses. If you can find them and cut them, you can save yourself a lot of money.

Conduct a review of every single penny your business spends. Ask yourself; do I need to spend this money, or do I need to spend this much money?

Cutting expenses doesn’t have to mean ceasing entire initiatives. Saving a small percent in several areas can result in a huge savings.

Cutting down on lighting and heating when not being used, decreasing office supply wastage, limited employee expenses – a small reduction in several key areas can free up vital cash.

Try replacing costly measures with cheaper alternatives For instance, video meetings work just as well as face-to-face meetings without all the added costs like travel and refreshments. 

Action Point

Trimming unnecessary expenses is vital during financial challenges. Regularly evaluate all expenditures, identifying and eliminating non-essential costs. Even small reductions across multiple areas can accumulate into substantial savings. Consider cost-effective alternatives, like video meetings instead of in-person gatherings, to further curtail expenses while maintaining productivity. Prioritizing efficient resource allocation is essential for safeguarding cash flow and bolstering financial resilience.

Sell non-essential assets and reduce inventory

Most businesses own assets and most assets are necessary for the day-to-day running of the business. However, there will almost certainly be assets in your business that are non-essential and can raise much-needed funds. 

Take a full inventory stock of your business. Include everything the company owns and sort everything into essential and non-essential items.

Take a look at your non-essential list. Some of these assets you will be able to do without completely. In these cases, your best bet is to simply sell them.

You may end up selling for less than you bought the item. Although you want to try and get the best price you can, your goal is to free up cash, not turn a profit. 

If your business involves selling large quantities of items, you may need to think about reducing your inventory.

Make sure you factor this into your stock flow management to ensure you do not face a shortage of essential materials and goods. Try and keep as small of an inventory as possible to ensure your cash is not tied up, immobile in your stock. 

Action Point

Consider selling non-essential assets to generate much-needed funds during financial challenges. Conduct a thorough inventory of your business assets and distinguish between essential and non-essential items. Items deemed non-essential can be sold to free up cash, even if it means accepting a lower price than their original purchase value. Additionally, evaluate your inventory levels and consider reducing them to prevent excess cash from being tied up in stock. Maintaining a lean inventory ensures liquidity and agility in managing your business finances.

Balance sheet for cash flow management

Contact us to find out more

Do a Cash Flow Statement 

The best way to manage your money is to keep track of it and know exactly where it is at all times.

It is essential that you know exactly how much money is being brought into the business each month and, more importantly, where it is all going. 

The most efficient way to do this is to create a cash flow statement. By listing out every expense your business has, you will find it far easier to manage your money. 

Cash flow statements allow you to better identify where the majority of your money is going and the best areas of the business to make savings.

You may find that you are spending more than you thought in areas of the business you hadn’t considered, or in areas that could afford to be underfunded for a few months. 

Cash flow statements allow you to plan your budget, identify when you may need additional capital in the business and keep track of exactly how much money the business has.

By properly using a cash flow statement, you will be able to keep cash flow shortages to a minimum.

Action Plan

Craft a cash flow statement to monitor your business finances closely. This tool helps track cash inflows and outflows, providing valuable insights into spending patterns. By detailing expenses, you can identify areas to cut costs and prioritize expenditures. Use the statement to plan budgets, forecast capital needs, and maintain financial clarity. With diligent oversight, you can mitigate cash flow gaps and optimize resource management.

Download our cash flow statement template for free below:

How to use the cash flow template

By clicking the link below, you can download our template for a cash flow statement. With a few adjustments, this template can be adapted to be used by almost any business.

The template is currently filled in with example information to illustrate what a finished forecast may look like. Please feel free to delete these numbers and replace them with your business’s own figures.

To calculate your business’s incoming cash, please fill in the ‘CASH INFLOWS’ section with your gross turnover (including VAT), your standing debtors and the value of any furlough receipts you may have received from HMRC. Cells labelled ‘other’ have been left blank for you to include any other revenue streams.

To calculate your business’s outgoing cash, please fill in the ‘CASH OUTFLOWS’ section with your standing creditors and the various expenses currently listed. Again, cells labelled ‘other’ have been included for you to add any additional expenses you may have.

The forecast spreadsheet will then show you the net movement of your business’s in-comings and outgoings. By also entering in your starting bank balance, the forecast then shows your business’s cash balance at the end of each month for the next year.

Action Point

  • Download the template.
  • Replace example numbers with your business’s figures.
  • Enter cash inflows and outflows.
  • Review net movement.
  • Input starting bank balance.
  • Determine cash balance for each month.

Managing Cash Flow: Conclusion

As the effects of the Coronavirus crisis are felt throughout the world’s economy, businesses across the globe will feel the pinch. Cash flow will become problematic for all manner and size of business, so it is essential to be prepared.

Making small savings in several areas can result in a huge saving across the business.

Additionally, planning your cash flow with a cash flow template can help you identify and avoid problems before they happen.

If you are experiencing unavoidable cash flow issues, you may benefit from applying for one of the Government-backed support schemes.

Using these tips, you can try to save as much money as possible while ensuring the smooth operation of your company. 

Click here to read our articles.

Join the Samera Alliance Buying Group

The Samera Alliance is our growing network of dentists, practices and leading industry suppliers, designed to help you save money, grow your profits and build a better dental business.

Join today for free to be a part of our dental buying group, which gives you access to exclusive discounts and offers on the consumables, equipment and products you need to run a successful dental business.

You’ll also get better rates and terms for a wide range of services like HR, IT, utilities, insurance, legal services and much more!

Business Loans for Dentists

We’ve been helping to fund the future of the UK’s dentists for 20 years and our team are made up of former bankers with decades of experience and contacts in the UK’s healthcare lending sector.

You can find out more about working with Samera Finance and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

Dental Practice Finance: Further Information

For more information on raising finance for your dental practice, including more articles, videos and webinars check out our Learning Centre here, full of articles an webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Free Templates for Financial Documents

Applying for finance from a lender can be a complicated process. There can be so many hoops to jump through, i’s to dot and t’s to cross that it can be a daunting task.

We have tried to make raising finance as easy as possible for you.

Below you will find a list of all of our free, downloadable financial document templates.

From cash flow forecasts to business plans, we have drawn together a selection of free, downloadable financial document templates to help you when creating the most important documents for your business.

If you are applying for finance from a lender, using these financial document templates can help make sure your business’s documents contain all the vital information, are formatted correctly and give you the best chance of being successful in your application.

Download Our Free Financial Document Templates:

Cash Flow Forecast Template

How to use the Cash Flow Forecast

This Cash Flow Forecast can be utilised by any business to help plan and manage their monthly expenditure and income, better enabling you to maintain a budget and keep control of your working capital.

The template is currently filled in with example information to illustrate what a finished forecast may look like. Please feel free to delete these numbers and replace them with your business’s own figures.

To calculate your business’s incoming cash, please fill in the ‘CASH INFLOWS’ section with your gross turnover (including VAT), your standing debtors and the value of any furlough receipts you may have received from HMRC. Cells labelled ‘other’ have been left blank for you to include any other revenue streams.

To calculate your business’s outgoing cash, please fill in the ‘CASH OUTFLOWS’ section with your standing creditors and the various expenses currently listed. Again, cells labelled ‘other’ have been included for you to add any additional expenses you may have.

The forecast spreadsheet will then show you the net movement of your business’s in-comings and outgoings. By also entering in your starting bank balance, the forecast then shows your business’s cash balance at the end of each month for the next year.

Debt Structure Template

Use this free debt structure template to help manage and document your business’s standing debts.

Many commercial finance lenders will require information on your business’s standing debts to assess your application for financial support in the form of a debt structure document.

This template allows you to list and document:

  • Lender
  • Facility type
  • Secured against
  • Initial amount borrowed
  • Amount outstanding
  • Term remaining
  • Monthly outgoing
  • Interest rate (and other fees)

Business Plan Template

Please download and use this free sample business plan template. Business plans are essential to the good running of a business. They allow business owners to set out their goals and document how they intend to achieve them.

Creating an accurate and detailed business plan is also an important step in raising commercial finance for your business. The vast majority of commercial loan companies will require a detailed business plan as part of your application process.

This business plan example template has been created with a dental practice in mind and is intended to show what a finished article may look like.

This template lays out the Executive Summary and the Narrative sections. Financial and appendices are not included here.

Business Continuity Plan

Please download and use this business continuity plan template to help your business plan and document how it will deal with an unforeseen crisis, such as the COVID-19 pandemic.

This template has been filled in with a dental practice in mind to show what a finished article may look like. Please feel free to download and replace the information with your business’s own details.

This plan lays out what issues will arise in a crisis, what contingency plans need to be implemented, how they will be implemented and who is responsible for it.

Useful financial document templates during COVID-19

Letter to Landlord Template

If your business is struggling to make rent payments, you may be able to negotiate a payment holiday with your landlord.

Of course, this will vary from landlord to landlord but many have been willing to defer rent payments to allow businesses the chance to room to breath.

If you could benefit from a rent payment holiday then please download this template letter requesting a postponed rent payment.

Asset Finance and Loans Provider List

Please download this list of asset finance and business loan providers to find out what kind of assistance they are currently providing to struggling businesses as a result of COVID-19.

This list also documents the best contact details for each financial lender, as well as details on the financial documents they will need to be provided with an application or request.

Commercial Loans for Healthcare Businesses

We’ve been helping to fund the future of British healthcare businesses for over 20 years and our team are made up of former bankers with decades of experience in the UK’s healthcare lending sector.

You can find out more about working with Samera and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

For more information on raising finance for your healthcare business, including more articles, videos and webinars check out our Learning Centre here, full of articles and webinars like our How to Guide on Financing a Dental Practice.

For all our previous webinars and video updates, subscribe to our YouTube channel and follow us on Facebook and Instagram.

Refinancing During COVID-19

Can refinancing help your cash flow?

It has always been difficult for business owners to predict when issues will arise in their operations. What’s more, they are usually on the lookout for internal issues that crop up within their own business.

However, in the last few months, all businesses have been hit by a global issue that has occurred outside of their business through no fault of their own. Not only that, but the impact itself has been absolutely huge across the board. 

The important thing now is how businesses face this issue and deal with the challenges it raises.

So what should I do?

Having worked through 3 recessions, a global meltdown and now COVID-19, the advice is act now, not later.

It is essential that businesses plan for their immediate and long-term futures through detailed and thought-out business plans and cash flow strategies.

You need to look at your assets and decide what is essential to your business and what is surplus to requirements.

Click here to find out more about Asset Finance.

So how do I do that?

  1. Review your past business  
  2. What assets do I need and what don’t I need
  3. What can I change in my costs
  4. What can I change in my income 

So, what does this all mean?

  1. Obtain up-to-date management information on what your business has been doing and complete the accounts for the year early. Where did custom  come from in terms of sales channels and market demographics? What services or products were in demand? Was demand seasonal or dependent on external factors? 
  2. Review your previous plans for buying. Do you need that new car this year? Do you need some new equipment to deal with the changes? Are you going to need more supplies or inventory? 
  3. What costs can you change? Review your outgoings and find the reasonable savings that can be made.
  4. Can I change my income. Can you raise your prices? What can you offer to make your returning customers convert or purchase more often? What products or services can you upsell to them?

Your accountants and/or business advisors will be able to help in providing management and accounting figures. It is important that you use accountants and advisors who have experience in your industry.

You need to look seriously at what you intended to buy. Do you need it now, is it essential to your business operations? How were you going to finance this or were you buying this cash? How does your plan to purchase affect your cash flow projections? What do you need going forward to deal with social distancing etc.

Review all your costs. You will not be able to change a lot of them. But most businesses will be able to make some savings in some areas – and these can add really up! 

Cash is King

An incredibly old phrase but one that is true in times of trouble – if you have cash you can usually weather a downturn.

The cost of finance

Finance costs feature in most businesses, either to assist with acquisition or to assist with growth projects, existing equipment purchases and future purchases.

This is one cost that most people do not look at once they have taken the finance. However, circumstances change so these should be reviewed regularly.

Are you paying too much for your goodwill loan?

What rate and payment are you making on asset finance?

Could you restructure your borrowing to make it more cost-effective?

Review your own home mortgage as well, make sure you are getting the best rate!

Questions we are asked to help with

  1. I have short term debt that I took to cover a cash flow issue last year which is expensive, can I refinance? Yes
  2. My business acquisition/start-up loan has a high interest rate, can I refinance the goodwill now? Yes
  3. Can I buy my premises? Yes
  4. Is my asset finance rate competitive? Can I change? Yes
  5. I have lots of asset finance, could I change this to a goodwill loan at a lower rate? Yes

These (and a lot more) are asked during normal times. Looking forward, you may need to finance new equipment, cover a period of reduced income or make changes to your practice.

We are happy to have a discussion with you about your needs and whether any changes can be made that will reduce costs.

Action Plan

  • Act Early: Plan for both immediate and long-term business strategies, including cash flow management.
  • Asset Review: Assess your business assets to identify essential needs versus surplus, potentially freeing up resources or identifying refinancing opportunities.
  • Cost Management: Examine and adjust costs where possible, focusing on essential spending to maintain operations efficiently.
  • Income Adjustment: Explore opportunities to adjust pricing or enhance offerings to boost income, considering customer conversion and upselling strategies.
  • Financial Review: Regularly review finance costs and explore refinancing options to ensure they remain cost-effective, including loans, asset finance, and mortgages.

Click here to read our blog on How to finance a healthcare business.

Surviving a Financial Crisis

Our healthcare business consultants are experts at helping medical health providers and their businesses survive a financial crisis. We can help with cash flow management, raising finance and optimising your accounts and tax structure.

Book a free, no-obligation consultation with one of our team to find out more about how we can help you and your business.

For more information financial crises and your business, including more articles, videos and webinars check out our Learning Centre here.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Managing Cash Flow to Keep Your Dental Practice Going

The storm isn’t coming – it’s here.

Businesses across the world are facing cash flow problems, and there are some tough decisions ahead!

In this webinar, Arun and Nigel discuss your options for managing cash flow in a dental practice.

Further Information on Accounts & Tax

Our team of specialist accountants and tax experts can help manage, process and structure your business’s finances. From management accounts and payroll & pensions to tax planning and cash flow management, we can take care of the full back-office function of your business.

Book a free, no-obligation consultation with one of the team to find out how we can make your accounts & tax easier, quicker and cheaper.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Using a Commercial Finance Broker

Starting and growing a business costs a lot of money. For most business owners, getting money and managing it can be really hard. That’s where business finance brokers come in to help. In the UK, a business finance broker can help you understand the complicated world of money. They can connect you with many ways to get money and give you advice that’s right for your business. In this blog post, we’ll talk about why it’s a good idea to work with a business finance broker in the UK. They can help you get money, give you expert advice, and make deals with banks that are better for you. We’ll also explain what makes business finance brokers different from other money advisors and how they can open up money opportunities for your business.

Introduction to commercial finance and its importance

Money plays a big role in making businesses successful. Whether you’re a small startup or a well-established company trying to get bigger, having the right financial help is really important to reach your goals.

Business finance means special money services and products made just for businesses. These can be things like loans, credit lines, using your assets to get money, factoring your invoices, leasing equipment, and more. Unlike regular personal money stuff, business finance focuses on giving companies the money they need for things like starting new projects, growing, buying equipment, managing money coming in and going out, and paying bills.

Business finance is super important because it helps businesses bridge the gap between the money they have right now and what they need to grow. So, whether you need money to launch a new product, buy another business, or invest in research and development, business finance is there to help.

One great thing about business finance is that it’s flexible. Unlike personal money options that can be strict, business finance can be customized to fit the specific needs of each business. This means that businesses can get the right funding that matches what they need, which keeps them financially stable and helps them grow.

But, dealing with the world of business finance can be tricky for companies. This is where business finance brokers come in.

A business finance broker acts as a middleman between companies looking for money and the banks or financial institutions that provide it. They really know the business finance market and have a big network of lenders, so they can find the best financial options for their clients.

By choosing a business finance broker in the UK, companies can open up lots of financial opportunities they might not find on their own. These brokers can help figure out how much money a business needs, show options from different lenders, negotiate deals, and ultimately get the best funding deals.

In short, business finance is super important for companies that want to grow and succeed in today’s competitive world. With the help of a reliable business finance broker in the UK, companies can discover a world of financial opportunities and make sure they have the money they need to achieve their goals.

The role of a commercial finance broker

When it comes to understanding the complicated world of business finance, having a knowledgeable and experienced professional by your side can make a big difference. That’s where a business finance broker comes in.

A business finance broker acts as a middleman between companies looking for funding and the banks or financial institutions that provide funding options. Their job is to understand the unique financial needs and goals of their clients and then connect them with the most suitable banks and financial products available in the market.

One of the main advantages of working with a business finance broker is their extensive network of lenders. These brokers have established relationships with various banks, credit unions, private lenders, and other financial institutions, giving them access to a wide range of funding sources. This means they can help you explore multiple funding options and find the best fit for your business.

Additionally, business finance brokers are well-versed in the different types of funding available, such as business mortgages, business loans, asset finance, invoice financing, and more. They have in-depth knowledge of the lending rules, terms, and conditions for each option, allowing them to provide expert guidance and advice tailored to your specific situation.

Contact us to find out more

Another important aspect of working with a business finance broker is their ability to negotiate on your behalf. They understand the intricacies of the lending process and can use their expertise to secure favorable agreements, potentially saving you money in the long run. Moreover, brokers can help streamline the application and approval process, ensuring that all necessary documentation is in order and increasing the likelihood of a successful funding outcome.

In summary, the role of a business finance broker is to simplify the complex world of business finance and provide businesses with access to a wider range of funding options. By leveraging their expertise, industry connections, and negotiation skills, they can help you unlock financial opportunities and make informed decisions that align with your business goals.

Click here to read our article ‘Why was my business loan denied?

Benefits of using a commercial finance broker in the UK

Using a business finance broker in the UK can bring many advantages that can greatly improve your financial opportunities. Whether you are a business owner seeking funding for expansion or a property developer looking for support for your next project, a business finance expert can be a valuable partner in dealing with the complex world of money.

One of the big benefits of working with a business finance expert is their knowledge and experience in the field. They specialize in understanding the complexities of the financial market and have extensive networks and connections in the industry. This means they are well-equipped to find the best funding options for your specific needs. They can analyze what’s available, evaluate different loan products and lenders, and provide you with personalized recommendations that align with your goals.

Another advantage of using a business finance broker is the time and effort they can save you. Researching and comparing various loan options can be a time-consuming and overwhelming task. A broker, on the other hand, can handle all the hard work for you. They will gather the necessary information, complete the paperwork, and negotiate with lenders on your behalf. This allows you to focus on running your business or managing your investments, while the broker takes care of the funding process.

Additionally, business finance brokers often have access to exclusive deals and rates that may not be readily available to individuals or businesses. Their connections with banks and financial institutions can provide you with access to better agreements, potentially saving you money in the long run. They can also provide valuable insights into the current market trends and help you make informed decisions about your financial strategy.

Moreover, using a business finance broker can improve your chances of getting approved for a loan. These experts have a deep understanding of the lending criteria and requirements of different lenders. They can help you prepare a competitive application that highlights your strengths and addresses any potential weaknesses. By presenting your case in the best possible light, a broker can increase your chances of securing the funding you need.

In summary, choosing to work with a business finance broker in the UK can bring a range of benefits to individuals and businesses seeking financial opportunities. From their expertise and industry connections to the time and effort they can save you, partnering with a broker can simplify the funding process and enhance your chances of success. If you’re looking to unlock financial opportunities and navigate the complex world of money, teaming up with a business finance expert is a wise choice.

Click here to find out more about bridging loan finance.

?

Did You Know?


  1. Regulatory Oversight: In the UK, financial brokers are typically regulated by the Financial Conduct Authority (FCA). Make sure the broker you choose is authorized and regulated by the FCA. You can verify this information on the FCA’s official website.
  2. Independence vs. Tied Brokers: Some brokers are independent, meaning they can recommend products from a wide range of providers, while others are tied to specific financial institutions or companies. Consider whether you prefer an independent broker who can offer a broader selection of options or a tied broker who specializes in a particular area.
    Samera are an independent broker.
  3. Commercial finance brokers arranged over £100 billion in loans and other forms of finance for UK businesses in 2022. (Source: National Association of Commercial Finance Brokers)
  4. The average value of a commercial loan arranged by a broker is £250,000. (Source: National Association of Commercial Finance Brokers)

Access to a wide range of financial products and lenders

When it comes to understanding the complex world of business finance and finding the right financial solutions, it’s crucial to have access to a wide range of financial products and lenders. This is where a business finance expert in the UK can be incredibly valuable.

Unlike traditional banks or lenders that often have limited options, a business finance broker has a vast network of lenders and financial institutions at their disposal. This means they can provide you with access to a diverse range of financial products tailored to meet your specific needs and requirements.

Whether you’re seeking a business mortgage, business loan, asset finance, or any other form of funding, a broker can help you explore multiple options and find the most competitive rates and terms available in the market. They have established relationships with various lenders, including mainstream banks, specialized lenders, private investors, and alternative finance providers.

By working with a business finance broker, you can save time and effort that you would otherwise spend searching for suitable lenders on your own. They will do the hard work for you, using their expertise and industry connections to present you with a well-organized list of options that align with your financial goals.

Additionally, a broker can provide valuable insights and guidance throughout the funding process. They possess a deep understanding of the lending landscape and can assist you in selecting the most appropriate financial product for your specific business needs. Their expertise can also improve your chances of securing funding, as they can help you prepare and present strong aspects of your business to lenders.

In summary, choosing to work with a business finance broker in the UK gives you access to a wide array of financial products and lenders. This enables you to explore a broader range of options, secure better terms, and ultimately unlock the financial opportunities that are best suited for your business.

Click here to read our article ‘How much can I raise?’

Expertise and industry knowledge

When it comes to finding financial opportunities, having the right knowledge and industry expertise can make a big difference. This is where a business finance expert in the UK can really help. These professionals understand the complexities of the financial world and keep up with the constantly changing market.

By choosing a business finance broker, you gain access to a wealth of knowledge and experience that can be valuable in dealing with the complex world of money. These experts have a deep understanding of various industries and can offer valuable insights tailored to your specific needs and goals.

Whether you need funding to start a new business, expand your current operations, or invest in new ventures, a business finance broker can provide expert advice and guidance. They can help you identify the most suitable funding options available, whether it’s a traditional bank loan, alternative lending solutions, or government-backed programs.

Moreover, business finance brokers have established connections with a wide network of banks and financial institutions. This means they can leverage their relationships and negotiate on your behalf to secure the best possible terms and rates for your funding needs. Their industry knowledge allows them to understand the subtle details of different lenders and their specific requirements, ensuring a smooth and efficient funding process.

In addition to their expertise, business finance brokers also stay up-to-date with the latest market trends and regulations. This ensures that you receive accurate and timely information that can impact your financial decisions. They can advise you on any changes in lending rules, interest rates, or government schemes that could affect your funding choices.

In summary, choosing a business finance broker in the UK gives you access to a wealth of expertise and industry knowledge. Their ability to navigate the financial landscape, connections with lenders, and capacity to navigate complex funding options make them a valuable partner in unlocking financial opportunities for your business.

Click here to read our article on ‘How to make sure your loan application is successful’.

Time-saving and convenience

When it comes to finding money opportunities for your business, time is precious. As a business owner or entrepreneur, your time is really valuable, and spending it on figuring out the complicated world of business finance can be overwhelming and take up a lot of time.

That’s where a business finance broker in the UK can be a game-changer. By choosing to work with a professional broker, you can save valuable time and enjoy unmatched convenience throughout the whole process.

A business finance broker acts as your trusted advisor, guiding you through the complexities of various financial products and lenders. They have extensive knowledge of the market, access to a large network of lenders, and the expertise to match your specific business needs with the right financial solutions.

Contact us to find out more

Instead of spending countless hours researching different banks, comparing interest rates, and filling out numerous applications, a business finance broker streamlines the entire process for you. They do the hard work, conduct thorough research, and provide you with personalized options that align with your financial goals.

Moreover, a broker can often expedite the approval process, as they understand the requirements and preferences of different lenders. This means you can access the funds you need more quickly, enabling you to seize time-sensitive business opportunities and drive your growth.

The convenience provided by a business finance broker goes beyond saving time. They can also handle negotiations on your behalf, ensuring that you secure the most favorable agreements. With their expertise and industry connections, they can often secure better interest rates, flexible repayment options, and higher loan amounts than you could obtain on your own.

Furthermore, a business finance broker can offer personalized guidance and support throughout the entire funding journey. They can help you navigate complex paperwork, decipher financial jargon, and provide valuable insights into the best strategies for managing your business finances.

In summary, choosing a business finance broker in the UK offers significant time-saving benefits and unmatched convenience. By entrusting the task of securing financial opportunities to a professional, you can focus on what matters most – running and growing your business – while having confidence that you are making informed financial decisions.

Click here to read our guides on managing your cash flow.

Tailored financial solutions for your business

When it comes to handling the money side of your business, one solution doesn’t fit all. Every business has its own unique financial needs and challenges, and finding the right solutions can be a daunting task. That’s where a business finance expert can make a big difference.

A business finance broker in the UK specializes in understanding the financial landscape and the specific requirements of businesses in various industries. They have the expertise and knowledge to assess your situation and goals, and then create financial solutions that are specifically designed to meet your needs.

Whether you need funding to start a new business, expand your operations, invest in new equipment, or manage cash flow, a business finance broker can guide you through the available options and help you make informed decisions. They have access to a wide network of lenders and financial institutions, allowing them to find the best possible deals for your business.

By working with a business finance broker, you can save valuable time and effort that would otherwise be spent researching and comparing various financial products and services. They will do the research for you, presenting you with a range of options that align with your business objectives. This personalized approach ensures that you receive the most suitable financial solutions that address your specific challenges and help you unlock new opportunities for growth.

Moreover, a business finance broker can also provide valuable support and guidance throughout the application and approval process. They understand the complexities of financial paperwork and can help you prepare the necessary documentation to improve your chances of securing funding. Their experience and industry connections can also expedite the approval process, allowing you to access the funds you need more quickly.

In summary, choosing a business finance expert in the UK offers your business the advantage of tailored financial solutions. With their expertise and access to a vast network of lenders, they can help you navigate the complex financial landscape and find the best possible options for your unique needs. By partnering with a business finance broker, you can unlock financial opportunities that will drive your business forward and ensure its long-term success.

Click here to read our guides on different types of finance solutions.

Navigating complex financial processes and requirements

Understanding complex financial processes and needs can be a challenging task, especially for businesses in the UK seeking financial opportunities. This is where the expertise of a business finance broker becomes crucial.

Business finance brokers are specialists who focus on helping businesses with their financial needs. They have a deep understanding of the intricate processes and requirements involved in securing funding or managing financial transactions. From securing loans and mortgages to negotiating lease agreements and restructuring debt, a business finance broker is well-versed in the complexities of the financial landscape.

One of the main advantages of working with a business finance broker is their ability to navigate the maze of regulations and paperwork that often accompany financial transactions. They stay up-to-date with the latest industry trends and regulations, ensuring that businesses are compliant and well-informed at the same time. This expertise can save businesses significant time and effort, allowing them to focus on their core operations.

Contact us to find out more

Moreover, business finance brokers have access to a vast network of lenders and financial institutions. This network enables them to identify the most suitable financial opportunities for each business’s unique needs and circumstances. Whether it’s securing competitive interest rates, finding flexible repayment terms, or exploring alternative funding options, a business finance broker has the connections and experience to negotiate favorable deals on behalf of their clients.

Additionally, the financial landscape is constantly evolving, with new products and opportunities emerging regularly. A business finance broker stays up-to-date with these changes, ensuring that businesses are aware of the latest financial options available to them. By providing tailored advice and guidance, they help businesses make informed decisions that align with their long-term financial goals.

In conclusion, navigating complex financial processes and requirements is a daunting task for businesses. By choosing a business finance broker in the UK, businesses can benefit from their expertise, industry knowledge, and extensive network of lenders. With their guidance, businesses can unlock financial opportunities and pursue sound financial decisions that contribute to their growth and success.

Click here to read our article on ‘Secondary Sources of Finance.’

How to choose the right commercial finance broker in the UK

Choosing the right business finance broker in the UK is crucial to unlock the financial opportunities your business needs. With so many options available, it can be overwhelming to figure out which broker is the best fit for your specific needs. However, by considering a few key factors, you can make an informed decision and secure the expertise and support necessary for your financial success.

First and foremost, when selecting a business finance broker, assessing their experience and expertise in the industry is important. Look for a broker with a proven track record of successfully helping businesses obtain suitable financial solutions. A broker with deep knowledge and understanding of the UK business finance market will be better equipped to navigate the complexities and find tailored solutions that align with your unique requirements.

Moreover, consider the broker’s network and connections within the industry. An established broker will have strong relationships with lenders, financial institutions, and other key players in the market. This network can provide you with access to a wider range of funding options and increase your chances of securing favorable terms and rates.

Transparency and trust are also important considerations when choosing a business finance broker. Ensure that the broker is transparent in their communication, providing clear and comprehensive information regarding fees, terms, and conditions. A reputable broker will prioritize your best interests and maintain open communication throughout the entire process.

Furthermore, it is essential to evaluate the level of personalized service and attention you will receive from the broker. A reputable broker will take the time to understand your business goals, financial situation, and specific needs. They will then tailor their approach, offering customized solutions that align with your objectives and help you achieve long-term financial success.

In conclusion, seek testimonials and reviews from previous clients to gain insight into the broker’s reputation and customer satisfaction. Positive feedback and recommendations can provide confidence and trust in your decision-making process.

By carefully considering these factors, you can choose the right business finance broker in the UK, ensuring you have a trusted partner who will help you unlock the financial opportunities your business deserves.

Click here to book a consultation with one of our commercial finance brokers.

Using a commercial finance broker

So, why should you be using a commercial finance broker to help you raise finance for your business? Because they give you the best chance of getting the best deal on the market. 

Commercial finance brokers have the contacts and know-how to ensure that your application is as likely to succeed as possible. Hey know exactly how banks want applications to be formatted and what they want them to include. They know a good business plan when they see one and they know a viable investment opportunity when they see one and they know a bad loan deal when they see one. A commercial finance broker can help make sure your loan application is more successful than if you had applied on your own. 

If you need help with your loan application, or if you want to make sure you are getting the best possible price on the market for your loan, contact us today! Our brokers have a network of contacts throughout the UK’s financial institutions to make sure your business is getting the best funding at the right price. 

Our Expert Opinion

“I cannot stress how important it is to have a commercial finance broker to help you. But not all brokers are equal, you need someone who understands you, your industry, your financial situation. A good broker will find you a deal, a great broker will get you many deals and then help you evaluate the best option available to you.”

Business Loans for Healthcare Businesses

We’ve been helping to fund the future of British healthcare businesses for over 20 years and our team are made up of former bankers with decades of experience in the UK’s healthcare lending sector.

You can find out more about working with Samera and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

For more information on raising finance for your healthcare business, including more articles, videos and webinars check out our Learning Centre here, full of articles and webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Why Was My Business Loan Denied?

How to make sure a business loan application is successful

Why was your business loan application denied?

If you have recently applied for a business loan and your application was declined, it may feel insulting or demeaning, but the first thing you need to understand is that it is nothing personal. There are several potential reasons for having a business loan denied. 

It is important to note that there are many lenders out there with different lending conditions which means that if you get rejected for a certain reason by one lender, you may get accepted elsewhere because a different lender has different loaning options. There are various options that are available to you in order to improve your chances of getting approved the next time you apply. 

There are many reasons as to why you may have had a business loan denied, the good part is that it is not at a lender’s discretion to explain why. Usually, you will receive what’s called an adverse action letter from the lender explaining the reasons why you were rejected for a business loan. 

There are usually two main factors that lead to lenders denying business loan applications, these are predominantly problems with credit and problems with income. 

Here are some of the reasons you might have had a business loan denied.

Poor credit history

Lenders primarily look at your borrowing history which is reflected through your credit scores. This is because lenders want to know if you are able to pay back the loan, seeing a solid history of borrowing and repaying will put the lenders at ease to know that their loan will be repaid back to them.

However, if you have not borrowed much in the past, your lack of credit history may lead to your loan being declined or if you have experienced complications with repaying loans in the past.

Brief credit history

The length of your credit history is important to show your creditworthiness to lenders. They need to be able to see that you have an established history with credit products. No history does not reflect a good history. No history means nothing to base the fact that you will be a responsible borrower.

If you keep up responsible habits such as consistently paying off your bills with a credit card or any other form of credit, in time your score will reach its full potential. This can help reduce the chances of having a business loan denied.

Bankruptcy

Bankruptcy will affect your credit rating therefore making it quite difficult for you to get a loan from many lenders. It is also against the law to borrow more than £500 from any lender without telling them that you are bankrupt until you are discharged from your bankruptcy.

Insufficient/unverified income

Lenders look at your work, investments, and other sources of income in order to assure them that you will be able to repay the loan. With some loans, lenders are required by law to calculate your ability to repay the loan through your income.

Even if you have a good credit history, if the numbers do not add up in the end, lenders may decline your loan for that reason. Either because you don’t earn enough to repay the loan or your income cannot be verified with the information you have provided.

Debt-to-income ratio

This ratio is the comparison of how much you owe each month to how much you earn. Most lenders use your own debt-to-income ratio in order to determine whether you will be able to handle the repayments after the approval of your loan.  You may see your business loan denied if the numbers add up and it looks like your business will not be able to handle any new debts.

Collateral

With some loans, you are able to personally guarantee the loan with your lender by essentially pledging a personal asset as collateral that is valued at the same amount of the loan. If you have a poor or brief credit history as well as no collateral, the chances of getting approved for a loan are much lower.

Contact us to find out more

Too many credit inquiries

You may think that applying for several loans at once with different companies may increase your chances of getting approved, but think again. When you apply for more than one loan or credit within a short period of time, it negatively impacts your credit rating. There is no limit or rule to determine how much credit you can apply for or the number of applications you wish to make however, there are consequences to your credit rating if you are making multiple applications for credit.

Making multiple loan applications also makes it seem like you are desperate for money which does not sit right with a lot of lenders, the argument is that, if you look like you need the loan so badly, you may struggle to repay it. As this will also reflect badly on your credit rating, it will make it difficult for you to receive credit or loans in the future as with any loan that you apply for, the lender will complete a credit check.

Change in income

The figure on your pay check every month does not affect your credit score. But lenders look at your income to determine whether that income will be sufficient enough to repay the loan. Therefore, affecting your eligibility for certain new credit accounts.

Recent late payments

You may be very responsible when it comes to paying your monthly credit card bills and you may have done it for years, slowly building up your credit score, but you had an off month and out of nowhere you accidentally miss a few payments. Unfortunately this can affect you pretty badly. The higher the score, the harder it falls when something occurs to hurt your credit rating. This, in some cases, can hurt your loan application more than consumers who had poor credit to begin with.

Foreclosure

Usually, for conventional borrowers, there is a waiting period of typically seven years after a foreclosure for the borrower to be eligible for another loan. For mortgage loans, the waiting period is a minimum of three years until you will be able to apply for a mortgage, this is three years from the time that the foreclosure case has completely ended.

Other issues

In some instances, you can have a business loan denied for less obvious reasons. This could include mistakes such as submitting an incomplete application, or perhaps a problem with your business model.

Action Points

  • Credit Challenges: Issues with poor credit history, brief credit history, or bankruptcy can lead to loan application denial. Lenders assess your borrowing and repayment history to gauge reliability.
  • Income Verification Problems: Insufficient or unverifiable income may result in loan rejection. Lenders need to ensure your income is adequate for loan repayment.
  • High Debt-to-Income Ratio: If your monthly debt obligations compared to your income are too high, lenders may doubt your ability to manage additional loan payments.
  • Lack of Collateral: For loans requiring collateral, not having sufficient assets to secure the loan can lead to denial.
  • Excessive Credit Inquiries: Applying for multiple loans in a short period can negatively impact your credit rating and make you appear desperate for credit, which is a red flag for lenders.
  • Income Stability Concerns: Any recent changes in income or employment can affect loan eligibility, as lenders look for stable income for repayment assurance.
  • Recent Payment Delinquencies: Late payments, especially recent ones, can significantly impact your credit score and loan application, regardless of a previously good credit standing.
  • Foreclosure History: A recent foreclosure can impose a waiting period before you’re eligible for certain types of loans, affecting your loan application.
  • Application Errors or Business Model Concerns: Incomplete applications or issues with your business plan can also be reasons for loan denial.

I’ve had a business loan denied – What do I do next? 

Having a business loan denied can be disappointing and frustrating but the good news is there are some steps that you can take to get your application reconsidered.

Find out why you were rejected

You need to find out why you were rejected in the first place and also have a lawful right to know. Most lenders will be more than happy to explain why you were rejected and what is required from you to be reconsidered. You have the right to ask the reason behind the rejection within 30-60 days and the lender will be required to inform you the reasons. It is important to note that failure to meet “minimum standards” is not an accepted reason, it has to be a more specific, concrete reason.

It may be a bit soul-crushing reading through a list of why you did not meet a lender’s requirements, but more often than not, it is all about the numbers. The rejection is not personal. You can view the specifics and amend them or change aspects of your lifestyle or business to ensure that next time you will get approved.

Look for errors in your application

You need to thoroughly check through your application, double-check that you have not forgotten to report any source of income or accidentally embellished an additional zero to any numbers.

Review your own credit score

It does not harm your credit score for you to check your own credit. It is a good idea to check in periodically on your credit score to see what is affecting it in a positive or negative way. You are entitled by law to get a free credit report, that way you can see what the banks can see.

Request reconsideration

If you have noticed an error in your application that can be corrected or suspect that you just barely missed the mark to qualify for the loan, it is worth calling the lender to discuss your case. This conversation should be a formal discussion, not you begging to be approved for the loan. How you act affects your image with lenders, go through all the points clearly that you have to get your loan reconsidered and accept whatever their response may be.

In conclusion, these steps might help you convince a lender to reverse their decision as well as improve your application. Unfortunately there is no guarantee however, there are other options out there for you. 

If you have had your business loan denied or you have concerns over your application, contact us today, Our team can help make sure your loan application has the greatest chance of success. We can also advise you on the best alternative funding options for your business if you cannot secure a bank loan.

Action Plan

  • Identify Rejection Reason: Request the specific reason for your loan denial from the lender, as understanding this can guide improvements.
  • Review and Correct Application: Double-check your application for accuracy and completeness.
  • Assess Your Credit: Check your credit report for errors or areas of improvement.
  • Seek Reconsideration: If an error is found or circumstances have changed, formally request a loan reconsideration with the lender.
  • Consider Alternatives: If still unsuccessful, explore other funding options suitable for your business needs.

click here to read our articles samera learning centre.

Business Loans for Dentists

We’ve been helping to fund the future of the UK’s dentists for 20 years and our team are made up of former bankers with decades of experience and contacts in the UK’s healthcare lending sector.

You can find out more about working with Samera Finance and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

Dental Practice Finance: Further Information

For more information on raising finance for your dental practice, including more articles, videos and webinars check out our Learning Centre here, full of articles an webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Top 10 Tips to Help You Cut Small Business Expenses

Running a business costs money. Even with less expensive technology and marketing tools, somehow costs still manage to add up and unfortunately, these costs can continue to increase regularly. To help keep your profits up, you need to be able control your expenditures effectively and cut a few corners to help you save that extra pound here and there to decrease your overall expenditure. Here are ten ways to cut small business expenses

Start saving

Remember when our parents used to tell us to make sure we are saving at least half of our allowance, it is the same for business! It can be hard to think about putting money away while you have consistent cash flowing in and out.

But a good tip to try to save some money is to reserve a third of profits every month into a hard to reach bank account. This can then be used for an end of year tax bill for your dental practice or in the event you need cash for an emergency. This savings account can be your saviour when you have unexpected expenses, it will act as a surplus of cash sitting there without you having to rely on a loan.

Action Point

Saving money is essential for businesses, just like it is for individuals. While it may seem challenging to set aside funds when cash flow is consistent, it’s crucial for financial stability. A helpful strategy is to allocate a portion of profits, such as a third, into a separate savings account each month. This reserve can serve as a buffer for unexpected expenses or end-of-year tax obligations. By building up savings, your dental practice can avoid reliance on loans and have a safety net for emergencies.

Get points

When making big expenses, try to pay as much as you can on a point accumulating credit card. Cards such as American Express or British Airways Miles give you rewards when you spend with them. American Express points transfer into money while continuous spending with a BA card can convert points into miles and allow you to save on business trips.

Remember to be sure to pay your monthly bill so you don’t end up racking up any extra charges. No matter what sector your company is in, every business, including dental practices, has expenses. So, you might as well be earning while you are spending. 

Action Point

Maximize rewards by using point-accumulating credit cards for significant expenses, like American Express or British Airways Miles, but ensure timely bill payments to avoid extra charges, benefiting dental practices and other businesses alike.

Minimising Taxes

Keeping the taxman at bay is one of the most important tips we could ever give you. Minimising your tax bill can be the most beneficial way to improve your business expenses. Taxes are the one expense that cannot be avoided, but minimising them is a great way of working around this issue. This means maximising all your available business deductions in order to reduce your tax liability. 

Action Point

Maximize available business deductions to reduce tax liability, effectively minimizing expenses and improving overall financial health for your dental practice.

Keeping track 

The best advice we can give you is that when you stay on top of all your expenses and payments, you have control over your cash flow which is the best position you can be in. Even if you are slightly lacking in profits, the control you have over your outgoings will help you get on a path that will allow figures to get higher. 

You should also get into a habit of keeping track of all business expenses, that means every single one including keeping receipts. An expense that is often overlooked is vehicle mileage. If you are serious about cutting your expenses then you need to record the mileage you do for business purposes. 

Action Point

Maintaining meticulous records of expenses and payments empowers you to control cash flow, paving the way for improved profitability, while diligently tracking every business expense, including often overlooked items like vehicle mileage, is crucial for effective cost management.

You can download a free cash flow forecast tool here.

Make the most of your time

It is important to know the value of your time and to make sure you are using it efficiently. Many business owners swap time in an effort to save money. An example of this is when you are driving an hour to pick up supplies and stock to save on a £10 shipping cost.

By doing small things like this you are essentially saying your time is worth less than £10 an hour! Not to mention the fuel costs included. The hour you wasted driving could have been utilised in a better way for you to earn more money than the money you didn’t save, but lost in that hour. Efficiency leads to more productivity and profit. And it all starts with knowing your goals, being organised and having a plan. 

Many successful entrepreneurs begin their day with a morning routine that sets the day for productivity. Having a schedule and routine will help you time manage your life to keep you productive and efficient.

Finally, delegating and outsourcing. The weight of your entire business should not rest on your shoulders. There are ways to delegate and outsource certain jobs that do not have to be done by you. In order to improve efficiency, outsource certain business practices to a third party specialist.

It might seem like hiring an outside vendor will increase your costs, however, in the long run, delegating specific tasks to specialists can save you money and generate even better results by leaving you time to do what you do best. There are also cost effective ways to do this such as using apps and websites such as upwork or automation tools that can help you take care of your business needs while you have the time to focus on what you do best in your business.

Contact us to find out more

Switch to the cloud

For many businesses a great way to reduce capital costs and ongoing IT related expenses is to switch to cloud computing. Cloud computing will help your business thrive by optimising costs and improving efficiency. With cloud computing, the need to purchase and maintain expensive ongoing software updates and servers on site is diminished.

The cloud allows you to always have the latest versions of business applications and your cloud provider will be able to take care of most data recovering issues, hence freeing your business from worrying about the implications and expenses of complex IT disasters. 

Action Point

Transitioning to cloud computing not only reduces capital costs and ongoing IT expenses but also enhances efficiency by providing access to the latest software versions without the need for expensive on-site servers, while cloud providers handle data recovery, alleviating concerns and expenses associated with IT disasters.

Avoid interest charges

This is one of the most important tips we can give you. Before embracing small business financing options for your dental practice, or any sort of credit, you need to calculate the interest rates that you are going to accumulate. Every pound that you pay in interest is a pound that will not accrue to your net earnings. Before venturing to find any kind of capital that will incur high interest, try tapping into friends and family favours for interest-free start up capital! 

A great tip is to pay off your highest loan rate first. So any short term rate, high debt that you may have such as credit cards or short term loans, always pay this off before you land yourself in hot water. Otherwise, you will be accumulating higher and higher costs and interests which will result in you eventually paying out more than what is coming in. Staying on top of these costs will allow you to keep on top of profits and manage costs effectively. 

Action Plan

To maintain profitability and manage costs effectively, it’s crucial to avoid interest charges by prioritizing the repayment of high-interest debts, such as credit cards or short-term loans, and seeking interest-free startup capital from friends and family before resorting to small business financing options, as every pound paid in interest detracts from net earnings.

Raise fees

Raise your fees routinely. A 10% increase in fees can lead to a much larger increase in profits if your overheads are remaining constant. So always look at your prices on a very regular basis as this can make a huge impact on the profitability of your business.

Consider setting up a premium or VIP service in your business. A small percentage of your customers will be willing to spend a lot on a premium or exclusive service. Even a handful of customers paying for VIP products or services can result in a large profit.

Action Plan

Regularly reviewing and raising your fees, even by a modest percentage, can significantly boost profitability, especially if overhead costs remain stable, while offering premium or VIP services to a select clientele can generate substantial profits from a small customer base.

Pay invoices early

There are many vendors that offer small discounts to clients that pay invoices ahead of schedule. It is these discounts that add up at the end of each month showing you how much you can save. As long as paying early does not impact your cash flow negatively, it usually makes financial sense to do so and also gain personal credit with the vendors knowing that you are a standup customer. 

It is also very important to remember to always get free quotes for any big capital item you purchase as prices vary greatly amongst distributors. And you should do the same for small supplies that you do every month such as materials. Price Match products at least once annually. You will be surprised how much you will be able to save from comparing costs. 

Action Plan

Paying invoices early can lead to significant savings through vendor discounts, while obtaining free quotes for capital items and price matching small supplies can further reduce costs and improve financial efficiency.

Click here to read our article on Dentist and Dental Associate Expenses Guide

Cut costs

When you shop around to find deals you will be surprised at the difference in rates for the same products from different suppliers and providers. As a small business owner you are always looking for ways to optimise your resources and cut material costs, here are a few suggestions on how to cut small business expenses:

When it comes to wholesale supply costs, every penny saved is essentially a penny earned. If you are running a business that regularly makes a lot of wholesale supply purchases, getting the best deal on supplies can make a huge difference with your outgoings. As a business owner you need to be constantly monitoring supply costs and checking for discounts as well as alternative lenders with better prices.  

You can also cut advertising costs as there are now more potential customers online now than ever before. Advertising does not have to be expensive, you can start by simply creating an online presence through social media or a website. Direct email is another highly effective low-cost marketing solution. Publicity is free and a great low-cost way to build your credibility. Other great cost effective options include cold calling, carrying business cards and asking for referrals. 

Insurance is an expense that no business can evade, you cannot afford to avoid spending money on insurance. However, increasing your deductible is one way to reduce your premiums. Just be sure that the amount of your deductible is not higher than what your business can afford if you have to make a claim. If you are a member of a professional organisation or a big company, you may be able to take advantage of group rates. 

Action Point

Cutting costs through strategic monitoring of supply expenses, leveraging discounts, and exploring alternative suppliers, alongside adopting low-cost marketing methods and adjusting insurance deductibles, can significantly improve a small business’s financial health.

Click here to read our articles on Samera learning centre

More on how to cut small business expenses

In conclusion, within every business in our uncertain economy, every penny counts, even the smallest percentage off an entire invoice will save you money. The biggest aspect of managing your spending is managing your time.

As your business grows, understanding things like operating costs and cutting any unnecessary costs is going to become more and more important. Operating costs will allow you to take an in-depth look at how your expenses are impacting your profits. Once you start cutting unnecessary costs you can start boosting profits.  

You can find more tips on how to manage your cash flow here.

Dental Accounts & Tax Specialists

As dental practice owners ourselves, we know what makes a clinic tick. We have been working with dentists for over 20 years to help manage their accounts and tax.

Whether you’re a dental associate, run your own practice or own a dental group and are looking to save time, money and effort on your accounts and tax then we want to hear from you. Our digital platform takes the hassle and the paperwork out of accounts.

To find out more about how you can save time, money and effort on your accounts and tax when you automate your finances with Samera, book a free consultation with one of our accounting team today.

Dental Accounts & Tax: Further Information

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Obtaining Loans After COVID-19

How hard is it to get a loan in a post-COVID world? Are the banks still lending?

The answer is – YES! The banks are still lending, you just need to make sure your application is is as good as it can be.

Click here to read our blog on How to finance a healthcare business.

Business Loans for Healthcare Businesses

We’ve been helping to fund the future of British healthcare businesses for over 20 years and our team are made up of former bankers with decades of experience in the UK’s healthcare lending sector.

You can find out more about working with Samera and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

For more information on raising finance for your healthcare business, including more articles, videos and webinars check out our Learning Centre here, full of articles and webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

How to Make Sure Your Loan Application is Successful

Business Loans for Dentists

We’ve been helping to fund the future of the UK’s dentists for 20 years and our team are made up of former bankers with decades of experience and contacts in the UK’s healthcare lending sector.

You can find out more about working with Samera Finance and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

Dental Practice Finance: Further Information

For more information on raising finance for your dental practice, including more articles, videos and webinars check out our Learning Centre here, full of articles an webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Free Cash Flow Spreadsheet Template

Please find below a very simple cash flow statement tool which I urge you to use to help you manage your cash flow.

There are some made up numbers in there currently. Clear them all out and enter your own figures.

Use this tool as a starting point to plan your cash needs.

How does the tool work

  1. The light pink cells require you to enter your monthly income and expenses each month. If you close for a period of time, you may have ZERO income in those months BUT still have the expenses.
  2. Cell B34 (green colour) details your approximate current bank balance in your business.
  3. Once you have entered these key figures you will then see in row 34, your cash bank balance based on your forecast scenarios at differing time points.
  4. You may also need to take into account tax payments too, the spreadsheet can be adjusted by you for your needs.
  5. The tool will then say in row 34 your funding shortfall, if you have one, and the approximate cash you will need to raise.

Personally, I suggest you plan for the worse case scenario and work out the cash you actually require to keep your business in the black.

If using spreadsheets is not your strong point, let us know, we can help you, but we are dealing with these on a first come first served basis.

What Next?

Once you have worked out a projected cash flow for your business, you will be better able to plan the growth of your practice.

If you need finance for your business then book a call with Nigel or Dan to find out the best options for you.

Book your call with Nigel or Dan here.

Commercial Loans for Healthcare Businesses

We’ve been helping to fund the future of British healthcare businesses for over 20 years and our team are made up of former bankers with decades of experience in the UK’s healthcare lending sector.

You can find out more about working with Samera and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

For more information on raising finance for your healthcare business, including more articles, videos and webinars check out our Learning Centre here, full of articles and webinars like our How to Guide on Financing a Dental Practice.

For all our previous webinars and video updates, subscribe to our YouTube channel and follow us on Facebook and Instagram.

Financial Tactics During a Cash Flow Crisis

In this webinar, filmed during the first lockdown, Arun discusses vital financial tactics that you need to be taking to manage your cash flow in a crisis.

Click here to read our article on How to finance a healthcare business.

Surviving a Financial Crisis

Our healthcare business consultants are experts at helping medical health providers and their businesses survive a financial crisis. We can help with cash flow management, raising finance and optimising your accounts and tax structure.

Book a free, no-obligation consultation with one of our team to find out more about how we can help you and your business.

For more information financial crises and your business, including more articles, videos and webinars check out our Learning Centre here.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Managing Your Cash Flow in a Crisis

In this webinar, filmed during the first lockdown, Arun discusses tough decisions every business needs to make in a crisis to manage their cash flow.

Click here to read our article on How to finance a healthcare business.

Surviving a Financial Crisis

Our healthcare business consultants are experts at helping medical health providers and their businesses survive a financial crisis. We can help with cash flow management, raising finance and optimising your accounts and tax structure.

Book a free, no-obligation consultation with one of our team to find out more about how we can help you and your business.

For more information financial crises and your business, including more articles, videos and webinars check out our Learning Centre here.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Financial Tips for Dentists

Arun’s 11 Financial Tips for Dentists that can lead to Financial Freedom

It shocks and saddens me when I see many young, energetic dentists excited about their careers but really managing their hard earned cash through poor advice.

It’s well known upon University graduation, Dentists are amongst the highest earners, but I have seen with my own personal eyes the poor judgement that many dentists use in managing their money.

A flash car, or a new fancy handbags may give short term satisfaction, but within a week or two, many wonder why they have bought the item in the first place and quite possibly regret trying to keep up with the Jones’.

My name is Arun Mehra, and for almost 20 years my accountancy firm has been working with Dentists. I married a Dentist, Smita Mehra (owner of the The Neem Tree Dental Group) back in 2001 and since then I have helped 1000’s of dentists across the globe with their business and finances.

I have been around the block a few times, and just like you, I do like to enjoy what life has to offer, but never at the cost of keeping up with the Jones’s. In this blog post I have put together some financial tips for dentists.

Financial Freedom for Dentists

The key to serious financial freedom is investing in opportunities that build you a passive income, and not wasting money on pointless things that have no real impact on your life. Earning money is hard work, so why waste it so frivolously?

This blog post is all about what you should be, and shouldn’t be doing in terms of your money. So, here are my top financial tips for dentists.

Rule 1 – Never try and keep up with the Joneses.

Who cares if your colleagues or friends have the latest car or newest piece of tech, don’t judge your situation on what they have or are buying. Look at your own finances, and then make the judgement of, can you afford it? And if you can, what will it bring to you?

Rule 2 – The curse of Instagram.

If we all believed what we saw on Instagram, it would appear that everyone is a billionaire, living the high life everyday.

They are not, it’s simply them trying to show off to others that they have made it. Some may have, but most haven’t.

Ignore what you see people buying on Instagram, or better still turn it off. If you do want to use it, don’t believe the hype, do your own research and take everything you read or see with a pinch of salt!

Rule 3 – Flash cars

There are various forums across Social media that show the latest flash car that your mate or colleague is buying.

Don’t be tempted unless you are a serious car dealer as buying the latest flash car is tantamount to financial nonsense.

Yes, the cars look lovely and shiny, but its not a financial investment and once you have driven it out of the fancy showroom it will lose at least 20% from what you paid for it.

I appreciate you may need a car, but does it need to be over £75,000 with all the trimmings? Probably not.

Rule 4 – Tax is inevitable

Don’t believe the hype that you can drastically reduce or eliminate your tax bill. My firm has picked up the remnants of many a dentist who has been easily persuaded to invest in various schemes over the years to reduce their taxes.

In truth, most never work, and be careful who actually advises on such schemes. Tax schemes very rarely work and often come back to bite – with a vengeance.

Contact us to find out more

Rule 5 – Pay for proper professional advice

You may find this difficult, but pay for the best advice possible from the right professionals – if you pay, you will get the right advice on most occasions.

I happily pay lawyers, tax advisors, surveyors and others when I need them, so I get the best result for whatever I am trying to do. If you need some support from our professional dental accountants click here.

If you don’t pay, and try and take shortcuts, it usually comes back to bite.

Rule 6 – Cut your coat according to your cloth

Yes this old Chinese proverb still stands today, with the free availability of credit to all.

Don’t get sucked in (see rules 1 and 2 above) and apply a degree of sense when spending your hard earned money.

Rule 7 – Save every month

Yes I know it’s boring, and interest rates are low, but always save something every month.

Set up a direct debit that goes into a hard to reach bank account so you cannot access it, and if you ever need cash for an urgent situation or say a deposit for a house or dental practice, you have it and you don’t have to go asking elsewhere for help.

Bottom line, start saving.

Rule 8 – Get onto the property ladder

If you can afford to, and assuming you have enough savings, try and get on to the property ladder, either as a homeowner or an investor. Over time, assuming the market is rising, you should build equity in your properties which can help in many ways over the long term.

Use your income to pay off the mortgage, whilst regularly re-financing every few years seeking a better deal.

Rule 9 – Pay off expensive debt

If you use a credit card pay the balance off EVERY month, DO NOT just pay the interest, pay the whole balance off.

Don’t get yourself into a situation where the interest keeps accumulating each month, this is a recipe for financial disaster as the interest rates charged are compounded each month increasing the amount you need to pay each month. At such high rates, the financial situation can get dire – so don’t’ get into such pickle in the first place by only spending what you need to spend (see rule 6)

Rule 10 – Tax Free Saving

Yes, again it sounds dull, but utilise you annual ISA allowance, it’s a great way to save in a tax-free wrapper and you should try to use this every year.

Rule 11 – Buy or build your own practice but be SMART

Many Dentists I meet entered the profession so they could run their own business. I strongly advocate becoming a business owner, but don’t rush it and most definitely seek advice from the right people (see rule 5 above) who can help you achieve your goal.

Keep your emotions at the door, and make a sensible purchase rather than one that is based on the emotion having to have a practice at any cost. I have seen too many dentists buy at too high a price and regret it for many years.

Be Smart.

Click here to our articles Samera learning centre.

Join the Samera Alliance Buying Group

The Samera Alliance is our growing network of dentists, practices and leading industry suppliers, designed to help you save money, grow your profits and build a better dental business.

Join today for free to be a part of our dental buying group, which gives you access to exclusive discounts and offers on the consumables, equipment and products you need to run a successful dental business.

You’ll also get better rates and terms for a wide range of services like HR, IT, utilities, insurance, legal services and much more!

Business Loans for Dentists

We’ve been helping to fund the future of the UK’s dentists for 20 years and our team are made up of former bankers with decades of experience and contacts in the UK’s healthcare lending sector.

You can find out more about working with Samera Finance and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

Dental Practice Finance: Further Information

For more information on raising finance for your dental practice, including more articles, videos and webinars check out our Learning Centre here, full of articles an webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Bridging Loan Finance

Have you thought about purchasing a property at auction but were worried that your bank would not be able to get the finance in place quickly enough, and you would lose your deposit? Or you were unsure whether to bid due to uncertainty around what level of finance your bank could agree for you, as the process of credit assessment and valuation employed by the major banks is quite a slow process?

Well, there are now other options available to you in the marketplace apart from just the main high street lenders. Arranging a facility via a bridging loan company could mean no more missed opportunities at auction, and a lot less stress while waiting for the transaction to complete.  Whether you are a first-time buyer or an experienced property investor with a large portfolio, you can bid with the knowledge that you can complete your purchases in a timely manner. 

Purchasing a Property at Auction

When you are purchasing a property at auction you need to be able to move quickly to secure the purchase. Auction houses usually set a 28 days completion date from winning the auction to when the purchase needs to be fully complete.  If you are unable to complete the transaction within the allotted time, then you risk losing your deposit (normally 10%) that you paid at auction to secure the property.

These tight turnaround times can sometimes feel near impossible from traditional lenders. However, with the right finance company, with experience within the sector, these can be easily achieved as they have the appropriate systems in place to assist you. 

What Details will a Bridging Loan Company Need?

If you are unfamiliar with Bridging Loan Finance, a loan will normally be secured against a charge on the property that you are purchasing. The lenders will need the details of property that you are buying, such as type of property (i.e. Residential or Commercial), details of your income and expenditure, details of any existing facilities you have in place, what type of charge is being offered (i.e. first legal charge or second legal charge), the term of the facility that you are looking at and, if you are buying the property at auction, the lot number.

Providing this information in advance allows the bridging loan company to assess you prior to the auction and advise you what facilities can be made available to you

If you already have a property portfolio and you can provide the lenders with the details before the auction, then they may be able to get a full agreement in place before the auction. This will give you the buying power and confidence needed to bid for the property that you desire. Furthermore, you can take advantage of the fact that they borrow against the value of your existing property, not the new property’s purchase price; this will provide you with greater flexibility.

Benefits of Using a Bridging Loan Company

The benefit of using a bridging loan company is that they can act quickly. They will normally work with experienced valuers and solicitors that have experience in the marketplace and who are used to working quickly. This will allow you to complete on the property within the auction house’s 28-day timescales. 

Just to highlight the benefits of using a bridging finance company: –

  • Quick Decisions
  • No Property Chains – facility could be arranged quicker than standard mortgages
  • Have credit pre-approved 
  • Fast Completion
  • Able to purchase property at auction, secure a site at a lower market price.

Different Bridging loan companies will have slightly different terms, but to give you the basic outline of the terms that you could expect from a loan:

  • Minimum arrangement fee 1%,
  • Maximum LTV 75%
  • loan term 3 -18 months
  • Loan amounts from £100k 
  • No exit fees. 

As the name would suggest, a bridging loan is a short-term facility; the loans are normally agreed for between 3 and 18 months. This will allow you to purchase the property, but also gives you time to put in place an existing plan, such as selling the property for a profit after refurbishment or refinancing to a mainstream lender on traditional terms, as you will then have the time to do so.

What will Bridging Loan Companies Loan for?

Bridging loan companies are also willing to lend for reasons other than just purchasing a property at auction, they will also lend for things such as tax payments, buy to let investments, land acquisitions and business expansion or purchase. 

Bridging would also be useful if you were to purchase a residential property and wanted to convert it to business use. Planning permission would need to be granted on the site, which can take time and you could risk losing out on the property. By using a bridging loan you could purchase the site while you waited for the relevant permissions to be granted.

This scenario can certainly become a factor for dentists purchasing a freehold property when setting up a squat practice or an established principle, where they are hoping to move from their existing site.  You may have found the perfect location, on the high street, good parking and low competition, but if it doesn’t have the correct usage then the seller may not wait for planning permission. With a bridging loan you could secure the property and then re-finance the site onto a standard business loan once you have put the relevant D1 usage in place. 

The demand for more flexible/alternative finance options is ever increasing in an environment where banks continue to tighten their lending criteria. Funding is available to individuals and companies and the bridging lenders will release the funds quickly and on competitive rates and terms. 

Business Loans for Healthcare Businesses

We’ve been helping to fund the future of British healthcare businesses for over 20 years and our team are made up of former bankers with decades of experience in the UK’s healthcare lending sector.

You can find out more about working with Samera and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

For more information on raising finance for your healthcare business, including more articles, videos and webinars check out our Learning Centre here, full of articles and webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.


Dealing With Debt as a Dentist

The World Is Saddled By Debt

Debt to get an education. Debt to buy a house, Debt to buy a business.

The world, and individuals, are saddled with debt.

This cannot go on, in my humble opinion.  

However, debt can be good, it can even be great, but only for the right reasons and situations.

Following close on the heels of our American cousins, the UK student comes out of university with debt of £50,000, the average dental student comes out with even more!

People with strong degrees from desirable universities can get jobs, like young dentists, but the myth that is perpetuated is that to be really successful you must BUY a flash car and have your own dental practice, to show you have made it!

Really? Sadly, this is something I come across increasingly often. The flash car and the dentist who is saddled with debt after living the big life and having the big debt to buy a practice at an over inflated price.

Buying The Dream

Having been in the sector for almost 20 years and owned various private practices with my wife, a dentist, it chokes me to see young dentists borrowing to the hilt to buy their “dream practice”. Soon after buying, often at over inflated prices, the dream is not as rosy as they had hoped.

Of course buying a dental practice can be a smart move, but it has to be the right practice at the right price. Remember this saying by Warren Buffett:

“You make your money when you buy”

So in essence if you pay too much at the outset, you will struggle to grow its value further.

And at what cost to your life? Working endless hours to make the figures work, missing out on your children growing up just to fulfil the treadmill of an NHS contract.

Click here to read our articles on Samera learning centre.

Is It Really Worth It?

As an entrepreneur at heart, I am the hugest advocate of owning your own business, but the level of debt some dentists take on does concern me , especially when buying certain dental practices.

In truth, it’s beneficial to my business if you buy a highly-valued practice, as we assist clients to borrow money from banks. The larger the loan, the higher our fee. 

Straight Talking Advice

However, our team is all about being straight and honest to our clients. A wrong decision by our clients at the outset can be a noose for many years which is NEVER good for our clients nor us.

Our team have considerable experience (and grey hair) to advise if we think you are paying over the top. 

So when you are thinking about taking on debt, come and talk to us, we will guide you so you are aware of the pitfalls as well as the opportunities that await in this changing sector.

Debt is easy to acquire but it doesn’t have to be a burden, so the next time you receive the sales brochure for a dental practice, remember you don’t have to buy it at the price it is being quoted for!!!

Click here to read our article on Dentist and Dental Associate Expenses Guide

Dental Accounts & Tax Specialists

As dental practice owners ourselves, we know what makes a clinic tick. We have been working with dentists for over 20 years to help manage their accounts and tax.

Whether you’re a dental associate, run your own practice or own a dental group and are looking to save time, money and effort on your accounts and tax then we want to hear from you. Our digital platform takes the hassle and the paperwork out of accounts.

To find out more about how you can save time, money and effort on your accounts and tax when you automate your finances with Samera, book a free consultation with one of our accounting team today.

Dental Accounts & Tax: Further Information

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Raising Finance for Property Development

Click here to read our blog on How to finance a healthcare business.

Business Loans for Healthcare Businesses

We’ve been helping to fund the future of British healthcare businesses for over 20 years and our team are made up of former bankers with decades of experience in the UK’s healthcare lending sector.

You can find out more about working with Samera and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

For more information on raising finance for your healthcare business, including more articles, videos and webinars check out our Learning Centre here, full of articles and webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Understanding Finance to Increase Profits

Click here to read our articles Samera.

Dental Accounts & Tax Specialists

As dental practice owners ourselves, we know what makes a clinic tick. We have been working with dentists for over 20 years to help manage their accounts and tax.

Whether you’re a dental associate, run your own practice or own a dental group and are looking to save time, money and effort on your accounts and tax then we want to hear from you. Our digital platform takes the hassle and the paperwork out of accounts.

To find out more about how you can save time, money and effort on your accounts and tax when you automate your finances with Samera, book a free consultation with one of our accounting team today.

Dental Accounts & Tax: Further Information

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Asset Finance for your Practice

Click here to read our blog on How to finance a healthcare business.

Business Loans for Healthcare Businesses

We’ve been helping to fund the future of British healthcare businesses for over 20 years and our team are made up of former bankers with decades of experience in the UK’s healthcare lending sector.

You can find out more about working with Samera and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

For more information on raising finance for your healthcare business, including more articles, videos and webinars check out our Learning Centre here, full of articles and webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

5 Financial Tips for Dentists that you Need to Know!

Business Loans for Dentists

We’ve been helping to fund the future of the UK’s dentists for 20 years and our team are made up of former bankers with decades of experience and contacts in the UK’s healthcare lending sector.

You can find out more about working with Samera Finance and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

Dental Practice Finance: Further Information

For more information on raising finance for your dental practice, including more articles, videos and webinars check out our Learning Centre here, full of articles an webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Do You Know the 3 Main Ways to Raise Finance?

Click here to read our articles Samera.

Business Loans for Dentists

We’ve been helping to fund the future of the UK’s dentists for 20 years and our team are made up of former bankers with decades of experience and contacts in the UK’s healthcare lending sector.

You can find out more about working with Samera Finance and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

Dental Practice Finance: Further Information

For more information on raising finance for your dental practice, including more articles, videos and webinars check out our Learning Centre here, full of articles an webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.

Financing Your First Dental Practice

Click here to read our articles.

Business Loans for Dentists

We’ve been helping to fund the future of the UK’s dentists for 20 years and our team are made up of former bankers with decades of experience and contacts in the UK’s healthcare lending sector.

You can find out more about working with Samera Finance and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

Dental Practice Finance: Further Information

For more information on raising finance for your dental practice, including more articles, videos and webinars check out our Learning Centre here, full of articles an webinars like our How to Guide on Financing a Dental Practice.

Make sure you never miss any of our articles, webinars, videos or events by following us on Facebook, LinkedIn, YouTube and Instagram.