FAQ – Buying a Practice
- Why do I have to pay for the evaluation?
- Which are the best Banks for a loan to buy a Practice?
- Will a loan offer from last year remain available?
- What information will the bank need when considering a loan application?
- How do I know how much I can borrow?
- Should I buy a house or a dental practice first?
- My current bank has said they cannot lend to me to purchase a practice – what can I do?
- What insurance will I require for a Practice Purchase?
- Setting Up or Buying A Practice
- Who is the Recruitment and Employment Confederation?
- I already have Life Insurance and Income Protection in place, do I have to take out more cover?
- Do I have to take out Life Insurance/Critical Illness or Income Protection?
- How much dental or managerial experience would the banks expect me to have?
- Can you help me find a solicitor?
- Can I pay a finders fee for you to find a practice
- Do I need a cash lump sum to buy a practice?
- How can I view the most desirable practices?
- As a first time buyer what support do you offer?
- Do I need to produce a business plan?
An evaluation is a significant piece of work that will always require a visit to your practice. We believe you miss out on many elements of a practice by sitting behind a desk doing an evaluation. The visit and the work afterwards in assessing and analysing the figures will mean that we can spend up to a day and a half in preparing your individual report and evaluation. However, a fee is payable should you require an evaluation for any other purpose than selling – in this case the fee is waived.
The key is to ensure you are working with a bank which understands the dental sector. Each bank will have its own separate credit criteria and guidelines and it is essential to ensure you present your application in a manner which will satisfy the individual Banks requirements. Via Loan Hunter we now work with the specialist dental divisions of SEVEN of the major Banks – and in essence will do the leg-work for you – ensuring your proposal is submitted to the right people at the banks, packaged in a manner which will ensure most positive outcome and negotiate the best terms.
If a bank approved a loan last year for a purchase which did not proceed, we are often asked is this offer of funding remains open.
In a word No …….. Most loan offers have a shelf life – normally maximum three months and would need a fresh assessment after that period The individual banks credit criteria is also constantly being reviewed and what was acceptable to the bank six months ago may not be now. For any potential purchase (even if you do have funding pre-approved) suggest you contact Loan Hunter for a no obligation review of your position and to negotiate best terms from the banks.
The Bank will of course be seeking Accounts / Valuation / Sales summary regarding any new practice you are looking to purchase. Nowadays the banks also focus quite closely on the purchaser and it is essential you have your own financial position in order – you should expect to provide a CV, your last four months Bank Accounts, Last two years Associate/Practice Accounts together with an Asset/Liability & Income/Expenditure profile (we already have templates which are acceptable to the Banks). Please call Loan Hunter BEFORE you approach your bank for further guidance in how best to put your case to them.
A difficult question to answer as is a bit chicken & egg …. in that quite often the amount the bank will lend will also depend on the financial strength of the Practice in question. That said there are a few simple questions we could ask you at the very outset (before you even have a practice in mind) – the answers to which should enable us to provide you with a rough guide as to level of financial support which could be expected from the Banks. Please call Loan Hunter to run through these questions.
If your dream is for practice ownership the answer to this question is in most cases purchase the practice first – the reason being that most banks will be seeking a cash contribution towards a practice purchase – however if your savings are put towards a house purchase they normally cannot be drawn back. Also if you buy a house first you are somewhat restricted as to where you buy the practice. However – by purchasing practice first you utilise your deposit/savings towards the practice – once you own the practice you would in most cases be on a higher level of income compared with former associate role – which would enable a faster build up of savings and then ability to hopefully buy an even larger house close to the practice.
There could be a number of reasons why this is so. It may be as simple as speaking with the wrong manager at the bank – it is key to ensure you speak with their Specialist Dental Managers who recognise the strength of a dental proposal.
It may be also that your proposal does not exactly fit the banks credit policy – quite common if you own say one practice already and are looking to purchase second or third.
Whatever the reason we would suggest you speak with Loan Hunter to review your position and to seek alternative options. Remember no two banks are the same and they all have slightly requirements – so if one says no it is quite common for Loan Hunter to obtain a more positive response from an alternative lender.
Banks would require you to have insurance in place before the loan gets drawn down, banks have different criteria and requirements so once you have their terms and conditions you will know exactly what their requirements are, however generally the banks would require Life Insurance and/or Critical Illness Cover, Income Protection, Locum Cover, Surgery Insurance, Professional Indemnity or a combination of Insurance cover. Some of these policies are specifically for commercial loans, it is best to receive advice from an adviser that is familiar with the lenders requirements, our experienced in house adviser can advise you on your best options.
Setting Up or Buying a Dental Practice is a very exciting and important stage in any dentists’ career. It is vital that you have the right advisors in your team. Frank Taylor and Associates are the UK’s leading Valuers & Selling Agents for the Dental Profession. We use sound business, finance and marketing principles and also have the expertise and experience you need to help you set up your ‘dream’ practice.
Please check this website regularly for information as it is updated frequently.
Setting Up In Dental Practice
When you set up a new practice you will need guidance and advice at every stage to ensure you avoid any potential pitfalls or problems.
Frank Taylor and Associates can provide a fully comprehensive solution for those dentists wanting to set up their own dental practice -
From the initial concept to marketing on the first day of trading – we can help provide a solution that exactly meets your needs. Our experience has shown us that it is the attention to upfront planning and thinking that makes a really successful practice. We can help ensure that you achieve that.
Buying a Dental Practice
If you are looking to buy a practice, again Frank Taylor and Associates can help you assess the viability of the practice you are considering buying, the realism of valuation price of the practice and can perform a detailed analysis of whether the practice is a good buy for you and would be likely to meet your expections. This thorough evaluation of the practice to be purchased is an essential step before you make the firm commitment to buy. Please get in touch with us about our Practice Evaluation and Assessment Service.
We can help you to obtain finance at favourable rates to fund the purchasde or set up of your new business. We have extensive contacts with all the major providers of dental practice finance in the UK.
Choose Frank Taylor and Associates to help you find the ideal solution to your business and enable you to achieve your goal. We are experts in the field of helping dentists set up or buy their dream practices, for further information please click here to contact Us of call us on 0845 612 3434
The Recruitment and Employment Confederation (REC) is the professional body dedicated to representing the interests of the UK’s recruitment industry. Our recruitment partner is a proud member of REC and we strongly advise that any recruitment firm you engage with is too.
If you have existing cover for Life Insurance/Critical Illness and Income Protection, this can be taken into consideration and used to protect the bank loan. If the protection is not sufficient you may be able to ‘top up’ your cover to fit into the lenders requirements or it may be cheaper or suitable to take out a whole new policy. Our in-house adviser would assess your current arrangements and advise you on the best way forward.
The insurance policies required by the banks are mandatory to cover their loans. However, it is wise to assess your financial situation and do a ‘what if’ assessment, for example, if you had a long term accident or illness how would you cover your monthly outgoings? Or if you died, what would need to be sold to cover any outstanding loans if you did not have Life Insurance? How would this affect your family? Our in-house adviser offers a Complimentary Review on your situation and would advise you on a suitable solution for you and the banks requirements.
This is the area which has been affected most by the banks recent changes in credit criteria. It is now generally expected by the majority of the banks that you would have worked as an Associate for at least TWO years (and with Accounts to verify income/earnings) before they would consider any proposal to purchase a practice.
Yes, we deal with a number of solicitors who specialise in dentistry and cover all of England and Wales. Through the creation of a specialist panel we are able to introduce you to solicitors that have experience of dealing with all aspects of dentistry from NHS Contracts through to private practices for sellers an buyers and also partnership issues.
No, we offer a range of membership options for dentists looking to buy, but do not offer a service where we source practices to buy. We are paid a commission by the vendor (seller) and feel it is ethical to only be paid a commission by one party in the transaction.
No, not necessarily. it is true to say a cash contribution is normally now sought by the Banks subject to circumstances we are still able to arrange loans, via Loan Hunter, for up to 100% of the purchase price of the practice. However, given the ever changing banking climate you are strongly advised to speak to us early on in the process of buying a dental practice. Our team have over thirty years in commercial finance and are well connected with the banks that specialises in lending to dentists.
For some time there have been significantly more buyers in the market than sellers. This does mean that some buyers will struggle to get an appointment to view as there may be hundreds of interested buyers. We offer a range of membership options with the premium service being Gold Plus Membership which provides access to new practices available for sale a full 5 days ahead of the majority of buyers.
We know that owning a dental practice can be daunting. We will guide you through the purchase process, help arrange your finance and necessary insurances (both for you personally and for your practice). We also offer bespoke business support depending on your personal needs.
It is advisable to have a Business Plan, but not mandatory (unless your Bank insists on one). If you do produce a Business Plan there are a few rules:
Keep it simple (you can do it yourself and do not need to incur the cost of an accountant)
Do it for your own benefit and understand the content
Make sure you update it on an ongoing basis
Loan Hunter can provide guidance as to how best to compile such a plan – and provide templates if required
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