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 bu
Apply for a loan in minutes and get multiple quotes today → Get Quotes
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.
Related Questions
What are the eligibility requirements for an SBA 7(a) loan for a dental lab?
The eligibility requirements for an SBA 7(a) loan for a dental lab include:
- Loan Size: $30,000 - $5 million (some exceptions for smaller loans may be granted)
- Loan Purpose: Loan can be used for financing commercial real estate, equipment, and working capital
- Loan Term:
- Real Estate: Up to 25 years
- Equipment: Up to 10 years
- Working Capital: Up to 10 years
- Credit Score Requirement: 660 minimum
- Collateral: Additional collateral is often required
- Documentation: Documentation for SBA 7a loans for dental practices is extensive, and includes:
- Year-to-date balance sheet
- Business tax returns (for the last 2 years)
- Business licenses
- Personal tax returns and resumes for 20%+ owners
- Projected financial statements (1-3 years)
What are the advantages of an SBA 7(a) loan for a dental lab?
The SBA 7(a) loan is a great choice for dental labs, since it 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
- Buying out a partner
- Refinancing business debt
- Purchasing or expanding a dental lab
Source: SBA 7(a) Loans for Dental Labs
What are the maximum loan amounts for an SBA 7(a) loan for a dental lab?
The maximum loan amount for an SBA 7(a) loan for a dental lab is $5 million. Loan terms for equipment and working capital are up to 10 years, while commercial real estate loans have terms of up to 25 years.
Source: SBA 7(a) Loans for Dental Labs
What are the repayment terms for an SBA 7(a) loan for a dental lab?
The repayment terms for an SBA 7(a) loan for a dental lab depend on the purpose of the loan. For working capital and equipment loans, the terms are typically up to 10 years, while commercial real estate loans have terms of up to 25 years. Source
What documents are required to apply for an SBA 7(a) loan for a dental lab?
The documents required to apply for an SBA 7(a) loan for a dental lab include:
- SBA Form 1919 (borrower information form)
- SBA Form 912 (statement of personal history)
- SBA Form 413 (personal financial statement)
- Business and affiliate financial statements, including a balance sheet, profit and loss, and income projection
The SBA allows applicants to get help (for example, from a lawyer or a translator) filling out the application paperwork, but your lender will be required to submit information about who gave you help to the SBA, so you’ll need to document who this person is as well.