Should You Use a National or Local Bank in a Dental Transition?

Without question, the dentists getting the best dental practice loans go with a large, national bank. The big national lenders have dedicated salespeople who know your geography, they have internal teams of folks ready to get you approvals quickly, and their underwriting teams are specifically dedicated to understanding the economics of dental practices. I highly recommend that you talk with only two national lenders to lock down your practice loan.

On occasion, as in maybe 1 deal in 20, I’ll see a local bank competing against the big national bank win the deal. When I talk with the banker at the local bank, they typically say some version of, “We just couldn’t lose another deal to BofA, so we took a loss on this one in hopes that other dentists hear about it.”

I’m as big a fan of supporting the local economy and local banks and credit unions and the next American. And there will be nothing stopping you from using the bank down the street from the practice you’re purchasing to do your banking after the transition. For the loan, pick the national bank.

However, before you choose which national bank to call, you should be aware of a secret only a few buyers know.

The Individual Banker You Talk with is MORE Important than the Bank You Pick

The individual banker at whatever bank you’re talking with is likely to be more impactful to the rate and terms you see as the borrower than the bank itself.

Put differently, it’s more important to know the right name to call than the right bank.

The reason why has to do with the law of large numbers. The bigger banks in the country doing dental lending have upwards of 80+ bankers spread around the country all doing dental loans like yours. Inevitably, one or two of those bankers are the best and one or two are the worst of the bunch.

You want to call the best banker and not the one about to be fired. And most banks dictate that the banker you talk with first is the one you work with on your loan, not necessarily the banker assigned to your territory.

The best bankers will have the most experience, have the best internal teams, have the right relationships with the underwriters to tee up your deal internally, and the right relationships with management to ask for exceptions to their “standard” deals to be able to secure the very best rates and terms.

Almost no one out there knows this. If you proactively approach the bank loan, you can maximize your chances of getting the very best rates, terms and fees for your loan and save potentially tens of thousands of dollars over the life of your loan. All by connecting to the right banker.

You’ll need to do some sleuthing with your transition team to find the right names. If it’s ever helpful, feel free to send me a quick email and I’m happy to introduce you to the top bankers in your area and give you the most up-to-date information.

Read More:

Why NOW Is (probably) the Right Time to Buy | How to Find a Dental Practice to Buy

Buying a Dental Practice – What to Do After Signing the Letter of Intent

Should You Buy the Building As Well As the Practice? | Negotiating a Dental Practice Purchase