Page 44 - The Dental Entrepreneur

The Dental Entrepreneur

Preparation of Bank Loan Applications

Some of the terminology used in the preparation of the loan is as follows:

Date Date of Application

Borrower The specific legal name of the intended
borrowing entity.

Type of Loan The specific type of loan(i.e., equipment
loan, line of credit, or leasehold
improvements

Amount The amount of the loan requested should be
supported with documentation. Asking for
too much or too little can convey uncertainty
about your ability to implement your plan.

Use of Proceeds As above, the use of proceeds should be
listed and well supported by documentation
in the company’s business plan and financial
forecasts

Term The desired term of the loan should be
listed. Longer terms are preferable and also
one with no prepayment penalty.

Closing Date Set a date for closing. For a loan renewal 30
days is adequate. For a new application you
would prefer a closing within 60 days.
Collateral Any assets (i.e., equipment ,inventory,
accounts receivable, etc.) to be used as
collateral for the loan.

Guarantees You should always propose loans be based
upon the practice’s credit worthiness. In
certain situations personal guarantees by
others may be necessary.

Rate Rates will be determined by the level of risk
the loan represents to the bank
Repayment Schedule A repayment schedule can be as creative as
a lender will allow. The key point is having
some breathing room at the initial roll out.

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