Questions to Ask Your Bank When Buying a Dental Office In Las Vegas, Nevada
As you consider buying a dental office in Las Vegas, you likely face financially and mentally preparing for this life-changing transaction. For this purchase, most dentists must seek financing from a commercial bank. This means discussing your needs with your banker, as well as asking all of the questions needed to fully understand your options. To help you through this process, below are some key questions to ask your bank, when buying a dental office in Las Vegas.
Financial Points To Consider When Buying A Dental Office In Las Vegas
When you need to finance $500,000 or any other amount for your new office, getting a loan means understanding your interest rate. Otherwise, you face overpaying for your loan. For example, a loan for $500,000 at 5% APR costs you $7,500 less over the lifetime of the loan, when compared to the same amount financed at 5.25% APR. That extra 0.25% interest adds another $63 per month to your payments.
If your loan comes with other requirements, those can cost you more money, too. Some banks require you maintain a checking account at their institution, for example. If that account charges a monthly fee of $30, you add another $3,600 to the cost of your 10 year loan.
Also consider your bank’s closing costs when buying a dental office. Some lenders charge these fees, in amounts like an additional $7,000. Look at this closely when comparing offered interest rates. When a bank with low APR adds closing costs, you can face paying more than the bank with higher interest rates.
Five Key Questions To Ask Your Banker
Before deciding on a lender when buying a dental office, ensure you do the math. Know the total cost of the overall relationship with your bank, prior to signing loan documents. To help you gain the full picture of your financing, ask these key questions:
What additional fees must I pay, beyond those in the loan proposal?
Ask your banker about legal fees, document fees, closing costs and other amounts associated with the loan.
What insurances do you require me to obtain as loan collateral?
Most lending institutions require you to insure your equipment through business property insurance. But others also require life insurance, business overhead insurance or disability insurance, too. Ensure the bank does not require more insurance than you and your financial advisor consider necessary.
Do you require me to process credit cards through this bank?
Many banks require credit card processing through their institution, adding high fees. These fees counterbalance or offset any savings you perceive through a low interest rate. When considering credit card processors, compare rates. Also check annual rates, since many of these entities raise processing rates from year to year.
Does your bank offer online services for my convenience?
Avoiding unnecessary trips to the bank saves your time, as well as the time of your office staff. Look for online processing of check deposits, payroll software integrations and other tools to manage your accounts, payments and receipts. Also ensure you have access to other important bank services, such as business credit cards, investment support, other financing and payroll services.
Does the bank offer reward programs for small businesses?
Ideally, you want to form a long-term relationship with your bank. This means having access to rewards programs to meet your needs and thank you for your loyalty.
Add Up Your Monthly Costs For Dental Office Financing
Buying a dental office is a big move forward in your life. Ensure you know what this change costs, before signing your loan documents. For a full picture of the banking relationship’s total cost, ask the above questions and add up the numbers below:
- Interest total for lifetime of the loan
- Closing fees
- Attorney fees, document fees and other fees
- Monthly insurance premiums (multiply by number of financed months)
- Monthly account fees (multiply by number of financed months)
- Monthly merchant services cost or savings (multiply by number of financed months)Your total from these amounts generally shows the total cost of your banking relationship. By knowing these figures, you can make the right lender and loan decisions when buying a dental office.
Dentists buying a dental office in Las Vegas or anywhere throughout the United States trust Encompass IHC for guidance and support. Our brokers and consultants include highly experienced dentists who understand your needs and goals. Having the right people on your team makes the whole process easier.
