SBA 7(a) Loans for Dental Labs
Dental labs are an approximately $32 billion global industry— and the market is growing larger each year with the increase in oral diseases and a greater need for dental prosthetics for older patients. If you own or operate a dental lab, and you’re looking for a source of financing to expand your business, acquire a competitor, or even refinance your business debt, getting SBA financing might be one of your best options.
SBA 7(a) Loans for Dental Laboratories
The SBA 7(a) program is the Small Business Administration’s flagship loan, with nearly $26 billion of 7(a) loans being issued in 2017 alone. SBA 7(a) loans can be a great choice for dental labs, since they can be used to fund both working capital, equipment, and owner-occupied commercial real estate. Working capital and equipment loans typically have terms of up to 10 years, while commercial real estate loans have terms of up to 25 years.
Dental labs can use SBA 7(a) loans for:
Purchasing equipment: Equipment can be one of the most expensive aspects of starting and maintaining a successful dental lab business, with many of the best dental milling machines and intra-oral scanners costing thousands, if not tens of thousands, of dollars.
Buying out a partner: If your business partner wants to move, retire, or go into a new business altogether, you might want to buy his share in the business— and an SBA 7(a) loan could be a great way to do so.
Refinancing business debt: Refinancing debt is one of the most common uses for the SBA 7(a) loan. However, the debt must currently be offered to the borrower on unreasonable terms, and needs to have been used for SBA-loan eligible business expenses, not personal purchases.
Purchasing or expanding a dental lab: If you want to buy an existing dental, or expand your current lab by bringing on new employees or moving to a larger location, you can do so with the help of an SBA 7(a) loan.
While SBA 7(a) loans are great, they might not be the right choice for every dental lab. In particular, larger dental labs, or businesses that actually manufacture dental equipment, might discover that the SBA 504 loan better fits their needs, particularly it they’re looking to purchase real estate to build a new headquarters or manufacturing facility. Although SBA 504 loans do permit larger loan amounts than 7(a) loans (up to $5.5 million) and have somewhat lower interest rates, they cannot be used for working capital— which makes 504 loans significantly less versatile.