GAP Australasian-Dentist Issue 80 Jul-Aug 19

Category AustrÀlÀsiÀn Dentist 127 Ào n tÀ also taken into consideration. Àhe risk increase correlates to the distance they are moving to purchase the practice. 3 What information does a lender need about a transaction, other than the financials and assets involved? At Credabl we like to know: a.À he reason for the sale and how genuine it sounds. Àeasons like “retirement”, “life change” and “to focus on other business interests” carry different risks. b.À s the selling dentist/s staying in the practice post sale? A transaction that has the dentist/s staying on post sale (even in a reduced capacity) carries less risk of patient attrition. c.À he restraint period and radius that they are agreeing to – if the dentist/s is not staying. d.À Are the staff staying? Àhere is goodwill attached to staff as well as the principal. A practice transaction that is retaining staff is seen as less risky than one where the staff and dentist are leaving post sale. e.À How secure is the lease on the real estate? A practice that may have to relocate in the near future is seen as very risky. Àypically, we would like to see at least six years of a secure lease post sale. 4 Does it get easier to borrow for your second and third practice if the first one is financially stable? Àot necessarily, it depends. On the one hand, if the borrower already owns one practice, they are more likely to have a stable secure income. Àhis would help with the application for the second practice. On the other hand, the law of diminishing returns often applies. Àsually the income of the first practice is highly dependent upon the dentist being in that practice. When we look at additional practice loans, we need to take into account that he/she only has two hands and can only be in one place at a time. Àecond practices are rarely twice as successful as the first practice (and so on). 5 How long should financing take? Finance approval should take less than 48 hours fromwhen the lender’s requirements are provided. HOWÀV , this doesn’t mean that the money is available 48 hours after application. Depending on the type of facility and the need for the involvement of lawyers/advisors, this can take a little longer. For simple things like cars and equipment it can often be available the same day, but for a practice purchase or commercial property it usually takes at least 3-5 days from unconditional approval to get the transaction parties together in one place. u If you’re looking to buy or sell your practice, the teams at Credabl and Practice Sale Search understand the process you need to undertake and the key considerations to get the desired results. Simon Palmer is the Managing Director of Practice Sale Search, Australia’s largest dental practice brokerage. If you’d like more information on practice sales or want to have a confidential discussion about your practice’s circumstances, email info@practicesalesearch.com.au or call 1300 282 042 Stafford Hamilton has built his career providing tailored finance solutions for dentists. He is the founder and CEO of Credabl, a new way for dentists to get the finance they need. For more information, call 1300 27 3322 or live chat with Stafford or another member of the team at www.credabl.com.au