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Dental Tribune Untited Kingdom Edition

B anks’ and ‘good news’ are words that are rare- ly nowadays used in the same sentence – but it is true, contrary to popular belief the banks ARE actively lending to the dental profession. There is though a BIG dif- ference between market per- ception and market reality. The doommongers out there would have us all believe the banks have simply shut up shop and indeed any flick through the pages of the Daily Mail or Express would back up this view. Market reality however is very different - There are now more high street banks than ever before who will lend to dentists who wish to purchase a practice. At last count there are nine banks who understand dental practice goodwill and will lend for a new practice purchase – be it leasehold or freehold. Can you name all nine??? Coupled with this there are at least 10 specialist asset pur- chase lenders who will be able to assist with equipment and potential refurbishment costs. The UK banks actually have an edict from the Gov- ernment to lend and with the dental industry being one of very few so called ‘Green Light’ sectors they are being actively encouraged to lend. All banks though are differ- ent – each has their own pref- erence as to the type of prac- tice they will lend on and have differing credit and lending policies and it is difficult for the individual dentist to know the best bank to approach for the best chance of securing a positive response. Even with individual banks it can still be down to chance - whilst it may be the right Bank you may be approaching the wrong manager who simply does not understand the den- tal profession. You may strike lucky and find both the right bank and the right manager - but how do you know they are offer- ing you the best possible pro- posal? Remember the banks are tasked with maximising the returns on any borrowing (which is a polite way of say- ing charge as much as they can get away with). ALWAYS get more than one bank in- volved to generate a degree of competition. For the best possible chance of a positive lending decision and to secure the most competitive terms from the banks it is wise to engage the services of a specialist in- dependent dental business ad- visor. From their knowledge of the WHOLE banking mar- ket they could firstly ‘shape’ your proposal in to a format which would appeal to the banks and then submit your proposal to a number of these lenders to ensure maximum chance of a positive and in turn secure the best lending terms available. David Brewer – specialist Business Advisor at FTA Fi- nance said: “The most com- mon question asked of me is ‘are the banks still lend- ing’. My answer is always a resounding YES. In 2011 we submitted over 210 individual dental lending proposals to the banks with overall borrowing of £101M. Of these just over 93 per cent were approved by at least one of the banks. The clients proposal quite often needs an element of ‘tweaking’ to ensure it is pre- sented in a way which will appeal to the banks however once submitted I am confident of securing a positive out- come.” So whether you are an Associate looking to buy your first practice or indeed and existing practice owner looking to acquire your 2nd or 3rd this is a good time to raise finance. Even if your Bank says NO - this quite often means there is nothing wrong with your proposal – you simply do not fit that bank’s credit criteria. And remember there are po- tentially eight other banks out there looking to lend. DT About the author Lis Hughes is a Director of Frank Tay- lor and Associates and works specifi- cally with the clients as the transac- tion proceeds through the sale and purchase process. A recognised voice of authority on what is happening in the dental sector, Lis will be provide an update on CQC and the impact of good compliance on the valuation of a practice. Tel. 08456 123434 Email: lis.hughes@ft-associates.com Frank Taylor and Associates @franktaylorassc The banks are lending to the dental profession ‘At last count there are nine banks who understand dental practice goodwill and will lend for a new practice purchase – be it leasehold or freehold. Can you name all nine?’ 23Money MattersFebruary 13-19, 2012United Kingdom Edition Reasons to be cheerful - the banks ARE lending Lis Hughes discusses the difference between market perception and market reality DO engage the services of an independent firm to liaise with the Banks on your behalf – will ensure proposal is packaged for best chance of a positive response and also to negotiate best terms. DO ensure you provide an accurate summary of your current position including all savings and existing borrowing. DO ensure your CV is up to date with particular focus on any past Managerial experience. DO expect the Bank to want you to put down a contribution towards the purchase. DO undertake your own research of the local area and find out why the current owner is selling. Raising Finance? Tel: 08456 123 434 01707 653 260 www.ft-associates.com peakingrankly S