Securing Buy-in Funding For Dental Practice

The costs involved in the purchase of a partnership are high, but the risks - compared with the uncertainties of setting up a squat dental practice - are greatly reduced. There will be a list of patients providing revenue and profitability from day one.

We recently helped arrange £70,000 funding to help a young dentist buy into a practice as a partner and tailored the loan to his available resources.

Partner buy-ins

A partner buy-in is the most common arrangement to allow a new partner to join an established dental practice team. However, the incoming dentist will need to provide funding to buy into the practice.

If a practice has an outgoing or retiring partner, the buy-in funds can be the most appropriate way to provide a buy-out for them. They may also be used to fund the growth or development of the practice.

There is usually scope for negotiation as to the size of funding acceptable to both parties. The most suitable type of funding for a partner buy-in will depend on the scale of funding agreed. But whether the buy-in funding is used to compensate a dentist who is leaving, to recapitalise the practice or to bring in new equipment, finding the right answer to provide the funding will be crucial.

Fortunately, as a dental professional, many lenders will be prepared to make a high level of funding available to you - but with large sums involved, getting the most cost-effective solution for your needs is all the more important.

How Rangewell helped a dentist buy into a partnership

Our client was a dentist who had spent several years as a junior with a busy dental practice based in Gloucester. 

When one of the senior partners decided that the time had come to retire, he was pleased to be offered the chance to buy into the practice. There were plenty of patients and with the possibility of bringing in new equipment to provide new orthodontic treatments, there looked to be plenty of scope for a profitable future.

Our client had agreed a contribution of £70,000. He had some savings of his own to invest but still required funding of £60,000. A recent house purchase meant that his available income was already committed - which with some lenders meant that additional lending would be impossible. 

Fortunately, our expertise in the sector allowed us to find an affordable solution. 

We saw that by becoming a partner, the dentist would enjoy a  substantial increase in income. By arranging a loan on the projected income rather than the income he had been earning in recent years, we believed it would be possible to arrange the loan without affordability issues.

We found a high street bank which could lend the £60,000 to the dentist on this basis. As a dental professional with a share in a profitable business, they were prepared to offer him an attractive rate of 3.25% above base rate over 5 years on a capital and interest unsecured basis. This was a particularly competitive rate and allowed the dentist to cover the monthly repayment commitment with his increased income.

The funding Rangewell arranged:

£56,000 at 3.25% above base rate 0.75%* over 5 years

Monthly £1,103.06 or Annually £13,236

Total cost for loan £6,183.36

The process was simple and, because we were able to approach lending specialists at the bank who understood the dental sector, fast. The dentist was able to draw down the funds he needed and take over the partnership.

At Rangewell, we  can help dental professionals find better answers to all their funding needs. Loan, asset finance, commercial mortgage, or any other kind of finance - our expert team can. find the most appropriate funding solutions while our network of lender contacts and our unique online tool let us find the most cost-effective rates.

Our service is independent, fast and absolutely free.