When it comes to financing major purchases, equipment, expansion, or managing cash flow, dental practices have two main options - loans or business lines of credit. What are the differences and how do you choose?
Loans provide a lump sum upfront and are repaid in regular installments over a set term.
The pros of loans:
- Fixed regular payments - This helps with predictable budgeting.
- Can fund large expenses - Loans finance major one-time costs.
- May offer lower rates for qualified borrowers - Interest rates can be competitive.
- Less flexibility - The funds are dispersed upfront and payments are fixed.
- New funding requires new loan - No ability to re-access repaid amounts if more funds are needed.