Yes, Banks Are Still Lending During COVID-19

Jessie Marolis


During this pandemic, operations for business owners everywhere have been turned upside down. Between mandated closures and economic uncertainties, we’ve all had to be more flexible and adjust to the new normal.

As dentists, you’re fortunate enough to work in what is typically regarded as one of the most secure industries. Previously, you wouldn’t have had issues securing a loan. However, changes in the way banks are now interacting with the healthcare industry may put a strain on your long-term goals.

Though COVID-19 has forced some of the largest traditional lenders to scale back their efforts, community banks are still eager and capable of providing you with financing through Small Business Administration (SBA) loans.

Whether you’re looking to start your own practice, build from the ground up, or even expand, this attractive financing solution is less risky due to its government guarantee and comes with the flexibility and terms you need to take your business to the next level. Here are some of the most frequently asked questions about SBA loans.

What Is an SBA Loan?

SBA loans are provided by banks but backed by the SBA. Because of this government guarantee, lenders typically offer them with more flexible rates and terms. Loans can be up to $5 million, and maturity length can range from 10 to 25 years.

Do I Need to Put Money Down?

Most lenders will require at least 10% down. Startups require cash equity, which can be presented in the form of a gift from a family member or friend. Established doctors can use equity from their existing practice for their 10% injection.

Either way, be sure not to drain your bank account to make your down payment. You still need to have cash on hand to cover your personal expenses until your practice begins to make a profit.

What Information Is Needed to Apply?

The application process for SBA loans can be lengthy, and lenders will ask a series of very specific questions. Crucial pieces of information include your business plan, details about your personal and business finances, and work history.

Demographic details are also a critical piece of the application process. Lenders like to see that you have prior connections to your community, so keep that in mind if you’re opening a new practice.

And if you aren’t building from scratch, it’s a good idea to have your location selected, a letter of intent for lease or purchase, and a complete business plan before approaching a lender. This early preparation will help the process go smoothly.

It’s not uncommon for your lender to reach out to you frequently during the underwriting process for additional details about your business plan, owner management experience, or projections and assumptions.

Failure to stay in active communication with your lender could delay your timeline, so make sure you keep all of your documents organized and stored in a place where you can quickly present them if necessary.

Is My Debt a Red Flag?

Don’t worry. Lenders know that you most likely have significant student loan debt, a mortgage, and probably a car loan as well. But because banks view dentists as reliable borrowers, lenders pay much more attention to your cashflow and credit than your debt. Making the case that you’ll be able to afford your loan payments should be the priority.

A credit score of 650 or higher is ideal, and lenders will also take a look at your credit history. A troubling repayment history, bankruptcy, foreclosures, or short sales are all indiscretions that may make your lender question your ability to repay the loan.

These derogatory marks do not automatically mean your loan will be denied, but you’ll need to prove to your lender that you’ve recovered and are now in a position to take on additional financial obligations.

How Long Will the Process Take?

The SBA application has a reputation for being extremely time consuming, but working with a preferred lender can expedite the process. This is because preferred lenders have more authority and can make certain credit decisions on behalf of the SBA, completely bypassing the need to submit loan applications to the SBA for approval.

In general, preferred lenders can process applications in seven to 10 business days, whereas working with a non-preferred lender can take up to two months. This can put a big dent in your project timeline, so keep that in mind if you need funding quickly.

How Do I Choose a Lender?

Most banks and lending institutions offer SBA loans. However, you’d benefit from finding a lender that specializes in financing for dental practices. These specialty lenders have a unique understanding of your line of work as well as the common financing obstacles, and they can lend expertise in areas where more general lenders may not be able to.

We’re all facing a bit of uncertainty right now, and only you can decide if the time is right for you to take your practice to the next level. If you’re considering making the move, a qualified healthcare lender can provide you with some guidance and go over funding options that may be available to you. 

Mrs. Marolis is senior vice president of United Community Bank’s Healthcare vertical. She has been helping dentists and other healthcare professionals around the nation secure the financing they need for more than a decade. For more information on how she can help you and your practice, connect with her at

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