40-Year Old Dental Equipment Manufacturer's

Rep Turns Traitor, Reveals Why Listening To

Your Rep For Equipment Finance Advice Can

Lead To Your Using The Wrong Equipment Financing (Debt) Which Can Destroy Your

Practice And Why You Should Avoid Listening

To Them Like The Plague!

Here's a question for you and it's not a trick question at all.  Do you have at least $100,000 in cash that tomorrow you would feel comfortable with (and could afford) lighting on fire in the waiting room of your practice and watching it burn into ashes?  Here's why I ask.

You May Have Already Started Your Fire But You Just Don't Smell The Smoke Yet

At some point in your career, (maybe you're there already or have already gone through this) you'll buy new equipment and expand your office.  You may even build a new office or lease space in a brand new building.

You're confident because your equipment rep has plenty of financing available for you.  You're looking at the greatest new office space, it's in the right location and when all built out it will showcase all your great clinical skills.

Life is good, your confidence is high, what could go wrong?  The answer is everything unless before you started this process you had developed a "financial plan" (not an investment plan you might see from a stock broker or investment advisor).

A "financial plan" is a blueprint, a working program and a strategy that takes into account your financial situation (your lifestyle, your living expenses, your practice revenue, expenses and debt, your retirement - EVERYTHING) and instructs you how to navigate through complex "financial" situations like buying equipment or leasing office space.

Without one this is what can happen, it's not a pretty story, but it's true.

Is Expanding Your Practice And Buying Equipment

A Simple Process?

A dentist we recently met is expanding his office, adding equipment and going to be leasing bigger office space. Earlier in talking with his equipment rep, the rep says “he can do this” telling the dentist he could get him approved for $500,000 for his project.

The dentist had already started his expansion project, he signed a 10 year lease feeling confident is his equipment reps discussions of being able to secure “financing”.

As we (his "financial", not investment, advisor) begin to work with the dentist and we looked into the details of his financial situation and project, we discover these costs:

$300,000 is the cost of the new equipment he was planning on buying

$500,000 in leasehold improvements for the 10-year space he'd already signed

$800,000 total

(click here to register for the FREE tele-seminar)

The Devil Is In The Details ...

Of The Equipment Financing Program

As we talk to the dentist about the details of the financing his equipment rep says the dentist has in place, unsure of details the dentist refers us to the equipment rep.  After an in-depth discussion with the rep we find out that “he can do this” really means the dentist is approved for up to $500,000 in equipment purchases, not on “total project financing”.

So with $800,000 total financing needed with $300,000 in equipment approved, the dentist discovers he still needs ½ a million dollars to complete his project.  Here's where the situation starts to get dicey.

The problem is the 10-year new lease payment starts next month so without the $500k to start leasehold improvements (build walls, install plumbing, electrical, etc), you can’t buy the equipment and you’re stuck with 2 lease payments. And from here it gets even better.

The dentist’s current lease payment is $3,200 per month. The new lease payment is $9,600 per month. That’s an annual difference/increase of $76,000. The practice revenue and expenses (which include his current debt service) currently do not generate enough cash flow to service the projected debt of $800,000.

(click here to register for the FREE tele-seminar)

Lenders Won't Let You Borrow Money When They Think You Won't Be Able To Pay It Bank, Even If The Loan Officer Tells You He Can Early In The Process

That means it’s going to be very tough for any lender to approve this dentist for the $500,000 he needs, if his cash flow won’t pay for it. Add in another $76,000 per year in additional, incremental lease payments, the ability of this dentist to service any additional debt gets worse not better.

So when next month rolls around and if the dentist can’t find the additional $500,000, he’ll end up paying $3,200 / month for his first lease AND $9,600 for his new 10-year 2nd lease. No expanded office, no new equipment, no increase patients to generate the cash flow to pay for everything. Checkmate?

Oh, and the dentist has already spent another $90,000 in design fees for the new office project (that isn’t moving forward). Now what are his options?

Financial Contracts Aren't Flimsy Commitments, Most Are Hard (And Costly) To Get Out Of

The dentist can try to make all the payments.  But that won't last long unless his lifestyle is severely reduced AND huge jumps in cash flow come out of the practice.  But that really can't happen without the new space, operatories and equipment. 

So after the cash runs out if you try to make all the payments, there’s always bankruptcy. In this scenario the dentist is still on the hook for the 1st year of 10-year lease payment or over $100,000.

Another approach is to negotiate with the new landlord and offer $100,000 to get out of the 10-year lease agreement because that’s all the landlord would get if the dentist declares bankruptcy.

WHAT COULD HAVE PREVENTED ALL THIS? 

The dentist could have saved a lot of wasted money and time investing a little bit of time and money with a financial expert (not a traditional financial planner, investment advisor or stock broker … or a loan officer or equipment rep) who can review and analyze the dentist’s entire, complete financial situation BEFORE the dentist every talked to his equipment rep or signed the new 10-year lease.

The review and analysis would result in a very clear picture of the doctors financial situation.  That picture becomes a realistic FINANCIAL PLAN that lays out the financial constraints, the financial tools and the correct timing or sequence of events needed to secure the right financing that supports successfully expanding the dentists office, buying the equipment and afford the additional lease and debt payments.

The cost to having the financial plan done FIRST to avoid the financial implosion that occurred in this situation is a SMALL FRACTION of the lost or wasted money the dentist has already and is going to spend to extricate himself from this downward spiral.

(click here to register for the FREE tele-seminar)

An Ounce Of Prevention Is Worth A Pound Of Cure

Every week we meet and work with dentists who have false confidence in their ability to borrow money for a variety or reasons or projects.  That false confidence come from borrowing being easy to do or having other people like a local banker or an equipment rep telling you financing is just a minor detail.

Unfortunately that mindset can cost you days if not weeks of wasted time and tens, maybe hundreds of thousands of dollars like the dentist we describe above.

That's why I'm inviting you to my FREE tele-seminar on this topic.  I'll discuss WHY bankers and other lenders mislead dentists with their comments to you about your ability to get financing and loans for equipment, projects, expansions, etc..

Plus I'll explain why it's not always a good idea to borrow money just because someone is willing to lend you the money.  Like I said at the very beginning of this email, unless you've laid aside $100,000 in cash you're willing to burn on the floor of your waiting room, please don't miss this tele-seminar.

At The Tele-Seminar I'll Show You How Lenders Think And How To Prepare Yourself Before Going To Any Meeting Where Money Is Discussed

During the 59 minute tele-seminar I'll share with you BOTH SIDES of the lending equation so you are knowledgeable about your financial situations and can intelligently decide what TOOL you need when incurring DEBT in one of several situations.  You'll get a solid overview of:

• The 3 Types of Borrowers, which one are your?
• The Assets, Tools and Constraints in a debt situation
• The GAP in Your Project if you're building an office
• How Much You Can Afford to Borrow
• How Much You Can Borrow
• The Rules of Borrowing You Don't Want To Violate
• How to Know if You Need Help
• Questions You Should Ask Your Bank

CLICK HERE to register for this FREE TELE-SEMINAR.  All you need is your telephone to dial into the call.  When you register you'll be emailed instructions on how to dial in to the call.

Don't let your debt slow down your practice or hinder your ability to generate wealth and retire when and where you want.  Register today!

How To Properly Structure Your Debt

presented by David Catalano of Finance Geeks

Who Is David Catalano?

Since graduating from the Rochester Institute of Technology with a finance degree, David has spent the last 19 years working with hundreds of dentists across the country.  He started his career as a dental equipment manufacturers representative for Pelton & Crane. In 1998 became President and CEO of Midwest Bankers Group, Inc. in Indianapolis, IN.  Through it’s affiliate company Finance Geeks, David and his team of other finance geeks work with dentists who take the plunge to finance and build their own state-of-the-art dental office buildings.  David is a member of Young Entrepreneurs Organization and is a Strategic Coach client.