Buyer’s information

Congratulations. Many years of hard work brought you to this point: Considering purchasing a dental practice. It can be a blessing or a nightmare. We have seen both scenarios many times. A prudent buyer will need to have readily available at a minimum the following financial data:

1.     Student loans (if any). Upon opening an escrow to purchase a practice, any lender will ask for this information. At minimum, they will need to know current monthly payments, residual loan amount, and expected pay-off date.

2.     Personal loans or lease agreements. This applies particularly to monthly car payments and any other financial obligations. At minimum, current monthly payments, residual loan amount, and expected pay-off date should be readily available.

3.     Monthly rent opr mortgage payment. The lender will need to see if purchasing an existing practice can support the buyer’s current lifestyle. Current lease agreement or mortgage should be readily available.

4.     Liquidity. Lenders typically want to evaluate the potential of a buyer to sustain the practice expenses for the first couple of months. Recent copies (at least 3 months) of current bank accounts will be needed to confirm liquidity.

5.     Current clinical production reports. In most cases, buyers have been working at another office. In some cases, they have an existing office, and they want to either expand, merge, or acquire a satellite office. In either case, lenders want to see the capability of the buyer to produce dentistry commensurate to the level of the seller. The prudent buyer will have a 3- or 6-months production reports from his/her existing workplace as evidence to support his/her production capabilities.

6.     Recent credit score. While lenders will produce their own credit reports from the main credit bureaus, buyers are encouraged to produce their own credit reports ahead of time to investigate if there are any inaccurate financial information posted that could negatively affect their credit score.

7.     Current curriculum vitae.

8.     Academic/professional achievements. Examples can be Board certifications, extensive continuing education courses taken, awards of any kind, speaking engagements, published articles, etc. Lenders feel more at “ease” when they realize the buyer has a good set of clinical skills to handle the clinical aspect of dentistry after closing. The more confident the lender is, the better the possibilities to issue a loan and the better terms the lenders may offer.