When it comes to financing major purchases, equipment, expansion, or managing cash flow, dental practices have two main options - loans or business lines of credit. What are the differences and how do you choose?

Business Loans

Loans provide a lump sum upfront and are repaid in regular installments over a set term.

The pros of loans:

• Fixed regular payments - This helps with predictable budgeting.
• Can fund large expenses - Loans finance major one-time costs.
• May offer lower rates for qualified borrowers - Interest rates can be competitive.

The cons:

• Less flexibility - The funds are dispersed upfront and payments are fixed.
• New funding requires new loan - No ability to re-access repaid amounts if more funds are needed.

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