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Steps to Practice Ownership What’s right for me?. Presented by: Jessie Kunkle Bank of America Practice Solutions. Today’s Agenda. 1 .) Practice Ownership Options 2.) Understanding Your Credit 3.) Business Plan 4 .) Approval Process 5 .) Financing Options.

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steps to practice ownership what s right for me

Steps to Practice Ownership What’s right for me?

Presented by: Jessie Kunkle

Bank of America Practice Solutions

today s agenda
Today’s Agenda

1.) Practice Ownership Options

2.) Understanding Your Credit

3.) Business Plan

4.) Approval Process

5.) Financing Options

practice ownership options
Practice Ownership Options

Start Up

Practice Purchase

Buy In/Partnership

starting up a practice
Starting Up a Practice

Start Up Positives:

  • Build a practice the way you want to build it in the space you like the most. New equipment, furniture, etc. that fits your personal style.
  • Hire and train your own staff using your business and service philosophies.
  • You ultimately get to reap the rewards of your hard work with 100% of profits
  • Your work produces results that create value in a business that you own.
  • Patient selection matches your personality strengths and weaknesses.
start up items to consider
Start Up Items to Consider:
  • Stress of managing and running an office.
  • No patient base
  • You have to deal with the growing pains, i.e. staffing, billing, benefits, pay plans, scheduling, to name a few, and then provide dental care.
  • You will have to continue as an associate until the practice can support itself.
practice purchase positives
Practice Purchase Positives:
  • Your patient base is mature
  • Established insurance relationships
  • Have a patient base already established
  • Staff understands their roles and are trained
  • Staff maintains relationships with patients and can give you guidance with individual needs and care
  • You are purchasing cash-flow, enabling you to pay yourself immediately
practice purchase details to consider
Practice Purchase Details to Consider:
  • Possible patient attrition.
  • You are buying someone else’s practice (philosophy, flow, treatment planning, staff training, systems, etc…)
  • The equipment and office may be old and worn which will require additional economic investment.
buy in partnership positives
Buy In/Partnership Positives:
  • Same as Practice Acquisition
  • Very little risk of patient attrition
  • Management of staff is constant
buy in partnership
Buy In/Partnership

Buy in Negatives:

  • How well do you know your partner
  • What do you own?
    • Undivided Interest….
  • Do you share similar philosophies regarding treatment planning, practice management…
  • Partnerships are historically difficult to manage and maintain.
the 3 national us credit bureaus
The 3 National US Credit Bureaus

Competitors: Equifax, TransUnion, Experian

Get a copy every 6 months

Review all 3 bureau files

Your rights under the Fair Credit Reporting Act (FCRA)

your credit bureau file
What is included in your file

Contact Information

Trade lines/Accounts

Installment loans

Revolving lines of credit

Open loans

Public Record and Derogatory Information


Credit Score

Your Credit Bureau File
the 3 national us credit bureaus1
The 3 National US Credit Bureaus
  • Creditors can and will report derogatory information to the credit bureau when you do not “pay as agreed”
    • 30 days past due
    • 60 days past due
    • 90 days past due
    • Charge off
    • Collections
    • Public Records
your credit bureau file1
Public Record Information



Tax Liens


Your Credit Bureau File
credit scores
Credit Scores

Understanding Credit Scores

  • Your Credit Score is a grade on your credit report.
  • Scores Range from 300 to 850+
  • Median FICO Score is Approx 723
  • Average FICO Score is Approx 693
  • Bank of America Practice Solutions 680
  • Auto Industry- Tiered Based Pricing


first thing s first create a business plan
First Thing’s First – Create a Business Plan

1.) Summary Plan

  • A. Type of Practice
  • B. Mission Statement
  • C. Practice Structure
  • D. Market Opportunity
  • E. Competitive Advantage
  • F. Management Team
  • G. Office Manual
  • H. Benchmarks
  • I. Capital Requirements

2.) Target Market

3.) Management Team

4.) Business and Personal Budget

5.) Marketing Strategies

The best way to experience success in any venture is to plan.

Need a Business Plan Template???

Email Jessie Kunkle for one at –

the approval process
The Approval Process
  • What does it take to get approved?
  • The 3 C’s
    • Credit – We Covered
    • Collateral
      • Your Personal Financial Statement
      • Liquidity
      • Are you a home owner?
    • Character
      • Stay away from lavish purchases
      • Live within your means
      • Have you started a retirement plan?
the approval process1
The Approval Process

Start Ups

Application Information

  • Dental Lic #
  • Requested Amount
  • Project Information
  • Current Associate Info
  • Application and Personal Financial Statement
the approval process2
The Approval Process

Practice Acquisitions

Get Pre-Qualified!!!

Pre-qualified vs. Commitment letter (Approval)

Pre-qualified means the buyer’s credit, production capabilities, and financials qualify to obtain financing. THIS IS NOT a final approval.

Banks need to review the seller’s financials to review the cash flow, office information to ensure the practice is a good fit for the buyer

So why pre-qualify?: Getting pre-qualified could move you to the front of the line in buying a practice!

required information practice purchase
Required Information-Practice Purchase
  • Buyer-
    • Application and Personal Financial Statement provided by Lender
    • Curriculum Vitae
    • Last 3 years of tax returns
    • 12 months of production reports if available
seller required information
Seller Required Information
  • Seller
    • Seller Profile form provided by Bank or Broker appraisal
    • Current Profit and Loss statement
    • Last 2 Years of tax returns (3 years if loan request is >$500,000)
    • *Note – If practice broker is involved normally they can provide all seller information.
what to look for in a bank proposal
What to Look for in a Bank Proposal
  • Practice Finance Loan Proposals-Important Details to Consider
    • Terms Available – 5,7,10,12,15 years?
    • Approval VS. Proposal
    • Fees – Advance Payments, Admin Fees, Closing Costs, Origination Fees
    • Interest Rate- Fixed or Variable? Balloon?
    • Collateral Requirements? Additional Collateral? Read the fine print.
    • Ability to lock the rate?
    • Prepayment and Principle Reduction Options?
a tale of two loans
Loan A

Interest Rate 5.99%

Term 84 months

Fixed for 5 years

Approved for $400,000

Cost Restrictions

Level Payments

3% Doc Fee +10% down

2% Prepayment Penalty and no principle reduction


A Tale of Two Loans
  • Loan B
  • Interest Rate 6.39%
  • Term 180 months
  • Fixed for 15 years
  • Approved for $450,000
  • No Cost Restrictions
  • Graduated Payments
  • 100% Financing
  • Principle Reduction and no prepayment penalty after 12 months
sample loan structures
Start up Loan $450,000

6.39% 15 year fixed

4 months @ $0

8 months @ $1,587

12 months @ $3,175

156 months @ $4,536

Acquisition Loan $450,000

6.39% 15 Year Fixed

180 months @ $4,042

Sample Loan Structures