SBA 7(a) Loans for Dental Labs
If you own or operate a dental lab, an SBA 7(a) loan could be a great option for financing the expansion or working capital of your business.
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 could be one of your best options.
SBA 7(a) Loans for Dental Laboratories
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 a variety of purposes.
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 her 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.
Case Study: Expanding Production in Illinois
Randall, a seasoned dental technician, had been operating his dental lab, "Rockford Dental Creations," in Rockford, Illinois, for several years. His lab specialized in crafting custom dental prosthetics, such as crowns, bridges, and dentures, for dental practices in the region. With a strong focus on quality and precision, Rockford Dental Creations had built a solid reputation among local dentists.
As the demand for dental prosthetics grew, Randall realized that he needed to expand his lab to keep up with the increasing workload. He wanted to invest in advanced equipment and machinery to improve the production process and hire additional skilled technicians to maintain a high standard of quality.
To fund this expansion, Randall estimated that he would need approximately $200,000. He decided to apply for an SBA 7(a) loan, given the program's competitive interest rates, longer repayment terms, and flexibility in using the funds for various business purposes.
Randall prepared a detailed business plan, outlining his expansion strategy, projected revenue growth, and market analysis. He also provided financial statements that demonstrated the lab's strong financial performance and stability.
He submitted his loan application to a local bank experienced in working with small businesses. The lender reviewed his business plan and financials, recognizing the potential for Rockford Dental Creations to grow and meet the increasing demand for dental prosthetics in the area.
The lender approved Randall's SBA 7(a) loan application, granting him the $200,000 needed to expand his dental lab. With the additional funding, Randall was able to purchase advanced equipment, hire more skilled technicians, and increase the lab's production capacity.
Thanks to the support of the SBA 7(a) loan program, Randall's dental lab continued to thrive, providing high-quality dental prosthetics to dental practices throughout Rockford and the surrounding areas.
This is a fictional case study provided for illustrative purposes.
Other SBA Options
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.
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.