‍What Is External Financing?

External financing provides business capital from external sources, such as bank loans, grants, and private investments. Dental practice owners looking for funding options may consider outside sources to avoid taking internal resources away from the business or their personal savings accounts.

Making informed decisions regarding external financing sources helps dental offices fund innovation, weather financial hardships, and sustain steady business growth. But hasty decisions can lead to more fiscal difficulty. Let's review the pros and cons of external financing arrangements so that you can make the best financial decision for your dental practice.

The Advantages of External Finance Sources

Greater Financial Stability

Dental office owners can often use external financing without restriction, making external sources a viable option for funding financial relief without pulling resources away from the business.

A dental practice may use external funding to catch up on overdue vendor payments or overcome an emergency financial situation without sacrificing business operations or overall financial stability. To ensure that you can use your external financing on any aspect of your practice, look for sources with no limitations on how borrowers spend the money.  

Growth Funding

A dental office owner may also use external financing to fund growth or to keep up with an expanding practice. Outside financing provides the funds they need to make office improvements, purchase new equipment, fund marketing efforts, buy more property, and facilitate other growth-focused projects. External financing can provide the necessary capital if you need more space for a flourishing dental practice or funds to purchase the latest dental equipment. 

Patient Financing Options

External financing doesn't just benefit dental practices; it also provides financing for dental patients, allowing them to make manageable monthly payments on expensive treatments. Daunting prices can stop dental patients from getting treatment, so dental offices that offer patient financing programs enjoy increased treatment acceptance. Your practice can make it easy for patients to afford the treatment they need by providing financing from an external source.

The Disadvantages of External Finance Sources

Ownership Loss

Gaining funds from private investors and investment firms often requires dental practice owners to hand over partial business ownership. Depending on the investment agreement, this may entitle the investor to a proportional share of profits and a voice in business decisions. You'll need to decide what control you're willing to part with before seeking funds from investors.

Interest and Fees

A bank loan provides immediate funds, but dental practice owners must consider the interest and fees that will result in more long-term costs. If you're considering a third-party loan for your dental practice, ensure that you can afford the payments and keep the loan from becoming another financial concern for the business. 

Repossession Risks

Some business owners seeking external financing choose secured loan products to avoid high interest rates or find more favorable eligibility requirements. To get a secured loan, a borrower must offer collateral, such as a vehicle, property, or equipment, which the lender may repossess if the borrower fails to repay the debt. Although it can be easier to get a secured loan, you must consider the assets at risk if you don't make payments on time. 

Provide Patient Financing Through Dental Intelligence

If you want to pursue external financing that benefits your dental patients, Dental Intelligence has the solution. We provide third-party funding to dental patients through our partnership with Wisetack, a great company that helps businesses offer simple financing solutions to their clients. 

Why Provide Patient Financing Through Us?

Dental practices and patients both benefit from patient financing solutions through Dental Intelligence and Wisetack. Advantages for patients include:

• Fast virtual applications
• Treatment plan-based financing options
• No late or early payment fees

Many patients worry they won't qualify because they don't know what credit score is needed for dental financing. Wisetack makes it easy for patients in various financial situations to get financing.

Dental practices that use Dental Intelligence to provide external financing for patients avoid cash flow problems because Wisetack keeps them covered. Offices receive treatment payment within one to two business days, and Wisetack works with the patient to settle the debt. 

Contact us today to learn more about how we can help you provide an excellent patient experience.