How to get the best dental equipment financing rates

If you have opened a dental practice, you would need some equipment. However, financing them is really expensive. The good thing is that they last for a long period if maintained properly so they will save a lot of money in the long run.

Paying money outright for dental equipment is not easy at all, and if you are looking to get them financed, you will have to meet many terms and conditions. A lot of asset finance providers are out there, but their interest rates vary.

In order to save money, you would like to choose a deal that offers the best interest rates. As dental equipment can be very expensive, you would never want to hamper your budget due to higher interest rates.  

The best dental equipment financing deal comes with a good credit score, flexible repayment terms, attractive interest rates, and the size of the loan.

Dental equipment financing is a type of loan that helps fund the purchase or installation cost. You can avoid paying full cash in one go with the help of financing. Monthly instalments will make it more manageable to bear the cost.

How to get the best rates for a dental equipment financing deal

Here is how you can get the best rates for dental equipment financing deals:

Compare deals

You will have to compare as each financing company offers different dental equipment financing rates. Take a look at the following factors to make a thorough comparison:

  • A minimum credit score requirement

Your credit score is an essential factor that financing companies will look at while deciding how much money you are eligible for. First off, you should check our credit score, so you can easily see which financing company will be willing to offer your money. This way, you can prevent your credit score from being damaged by applying to those whose acceptance standards you do not meet.

  • How much do you want to borrow

Most of the times, the size of the loan will be the whole cost of the equipment. The lender will directly transfer funds to the equipment provider. However, if you do not want to fund the full cost of it, you will have to find a lender that matches your requirements. There could be additional formalities, so make sure you have complete knowledge of that.

  • Compare interest rates

The next thing is to compare the interest rates. They may vary by financing company. They could be between 4% and 25%, depending on your credit score, repaying capacity, and tenure in business. Do not forget to scrutinise the origination fees and monthly fees. Then see which lender is offering the lowest possible interest rates.

  • The size of collateral

Some lenders will not ask you to secure the loan against any additional collateral. The equipment you are financing will itself be served as security. However, some lenders might ask you to put down additional security.

The value of this collateral could be worth more than the cost of the equipment. Pick a lender that does not ask for additional security, as there is a huge risk of losing that, but if interest rates are lower, you can think of considering the other option.

Other factors

Of course, you will have to establish a comparison based on the factor as mentioned above, but do not forget that you will need to focus on the following to have your application quickly approved at the lowest possible interest rates:

  • Revenues

Financing companies will look at your revenues before giving the green light. If you are new to dental practice, it might be harder to get attractive deals.

Talk to multiple financing companies to know about their criteria. The higher the revenues your business has, the higher the chance you will get money. Financing companies generally expect minimum revenues worth £100,000.

  • Time spent in business

How long you have spent in your dental business is another factor that financing companies would like to see to make a decision. The longer the time, the higher the chance. However, it is not necessary to have spent in this business a very long time.

You should have been in your dental practice for at least a year. If you have just opened your dental practice, a financing company may say yes to your application with strings attached.

  • Overall financial health

Revenues are an intrinsic factor a financing company will consider to arrive at a lending decision, but the overall financial condition will be checked. You will have to submit a profit and loss statement and a balance sheet. Your financing company may also ask for other financial documents.

  • A good credit score and a high amount of collateral

Even though you match the bare minimum credit score requirement, you should still try to have a high credit score. The better the credit score is, the lower the interest rate. In fact, a good credit rating will help you avail yourself of a more considerable sum.

The financing company may cap the loan amount if your credit score is not so stellar. A good credit score also removes the chances of putting down a higher value of collateral.

At the time of comparing interest rates, you should see how much interest rates will go down when you increase the size of the collateral. Sometimes financing companies do not reduce the rates even though you increase the size of the collateral.

The final thought

To get the best dental equipment financing rates, you will have to compare deals based on the factors like credit score requirements, collateral size, borrowing sum, and the size of collateral.

Apart from that, you should ensure that you make good revenues and have spent at least a year in the dental practice.

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