Dental-Practice Financing & Business-Cycle Review - Pacific ...

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Dental-Practice Financing & Business-Cycle Review - Pacific ...

Dentists Rely onPacific Continental BankJust as dentists are committed to their patients’ oralhealth, Pacific Continental is committed to thefinancial health of dental practices. We understandyour business, and we work hard to be the trustedadvisor you need.The Right Bank ® for Dentists............................................... 1Start-Up Financing............................................................... 2Phases of Dental Practice Start-Up..................................... 3Acquisition Financing........................................................... 4Steps to Acquisition............................................................. 4Real Estate.......................................................................... 5Considerations for Purchasing Real Estate.......................... 5Business Banking for Dentists............................................ 6Loan Application.................................................................. 7


When we ask dentists what they want froma business bank, the overwhelming responseis a banker they can trust and one whounderstands the unique needs of a dentalpractice. Pacific Continental can offer justthat — and much more.The Right Bank ® for DentistsWe Speak Your LanguageAt Pacific Continental, we speak the language of dentists.We have a team of bankers that specialize in working withdentists to guide them through the life cycle of a dentalpractice, from start-up to retirement. Our bankers havemany years of experience working with and lending to thedental industry, and we stay up to date on the latest trendsand information impacting the dental community. Simplyput, we make it our business to know your business.But our commitment doesn’t stop there. We work inpartnership with our dental clients, so that they can focuson their passion — improving the oral health of theirpatients. Our bankers share their knowledge and expertisethrough articles published in dental-industry publications,seminars and workshops, as well as quarterly eNewslettersdesigned specifically for dentists. We also place greatemphasis on getting to know our clients and their practices.At Pacific Continental, we tailor our services to help yourpractice achieve and maintain success. We’re with you everystep of the way, offering flexibility, localized decision makingand the ability to give each and every client personalized care.You can rest assured that your finances are well cared for withPacific Continental. The bank maintains a solid financialfooting, consistently surpassing the “well-capitalized”designation and continually achieving deposit and earningsgrowth. With Pacific Continental, you don’t have to worryabout the future of your bank. As one of the healthiest banksin the region, we’re here to stay.Supporting Dentists and Dental StudentsPacific Continental proudly supports the dental communityand the institutions of higher learning that educate and moldthe dentists of tomorrow. Pacific Continental establishedan endowment through Oregon Health and SciencesUniversity’s School of Dentistry and contributed to theschool's new dental facility, Skourtes Tower. We also providean annual scholarship. The bank created the Partner inDiversity scholarship at the University of Washington Schoolof Dentistry with the goal of providing funding assistanceto minority students who plan to address oral health caredisparities. In total, Pacific Continental has given morethan several hundred thousand dollars over the last fewyears in support of dental student education and continuingeducation for dentists. We also support a number of localdental societies throughout the nation. These collaborationsdemonstrate the importance we place on our relationships,as well as our deep commitment to the profession.1


Additionally, Pacific Continental employees volunteer ata number of local dental-care activities. Our bankers havedonated hundreds of hours to events such as Give Kids ASmile Day and free dental-care clinics in our communities.For more than 40 years, Pacific Continental has served thePacific Northwest as a business bank and a trusted partner.We are dedicated to building strong relationships with ourclients and maintaining our reputation as the right bankfor dentists.Start-Up FinancingLaying a Solid FoundationPacific Continental’s expertise in the dental industry allowsus to create custom solutions for our clients, from recentgraduates who want to establish their first office to seasoneddentists who are ready to launch their own practices. Ourdental-practice bankers will collaborate with you to ensureyou have the tools you need to successfully start or growyour practice.Pacific Continental will work with you to address yourspecial circumstances, such as outstanding student loansor limited access to existing capital. We can provide100%+ financing to cover costs associated with openingyour practice. We offer highly competitive fixed- andvariable-interest rate loans, as well as extended reducedpayment periods and longer amortizations.We know it can be daunting to make such a significantbusiness decision without sound financial advice.That’s why we want to help. We’re not just a bank; weare your partner as you start, grow and nurture yourbusiness. We’ll be there not only to walk you throughthe financing process, but also to give you guidanceon strengthening your creditworthiness, minimizingoverhead and building your clientele.Top 5 Things to Consider WhenStarting a Dental Practice:1. Surround yourself with professionaladvisors who know the dental industry.2. Develop a thorough business plan.3. Establish a realistic budget.4. Create a focused and measurablemarketing plan.5. Confirm you have all proper insurancecoverage in place.2


Phases of Dental Practice Start-UpFollowing are the three phases dentists can expect toencounter when launching a new practice.Phase I• Write a business plan for your practice.• Prepare your personal and business budget.• Obtain a demographics/feasibility study of thearea(s) you are considering.• Consider using a commercial realtor or equipmentspecialist to help you find a prospective practice location.• Begin building your team of strategic advisors:attorney, accountant, banker, equipment specialist,insurance agents, etc.• Consult a lender about financing the project and obtaina preliminary loan commitment.• Meet with your contractor, designers, architect andequipment specialist to design the space.• Meet with your accountant and attorney to go overyour projected costs and plans.Phase II• Negotiate the lease with the assistance of your attorneyor lease negotiator.• File your corporate documentation with the Secretaryof State and apply for tax identification and employmentID numbers.• Begin the underwriting of your life, disability andoverhead insurance policies.• Obtain insurance for liability, malpractice andworkman’s compensation.• Meet with your equipment and supply specialiststo place your first orders.• Work with your marketing consultant to develop yourlogo, stationery, signs and website as well as promoteyour opening.• Meet with your banker to begin setting up corporateaccounts, including merchant bankcard to accept creditand debit cards from your patients.• Order marketing materials to promote your opening(e.g., banner to hang at the location and business cardsand letterhead to assist with networking).Phase III• Refine and start implementing your marketing plan.• Review your finances and refine your overheadprojections.• Post “Coming Soon” banner announcing the openingof your new practice.• Network with local business owners.• Begin interviewing and hiring staff.• Work with your team to finalize details for opening.• Start scheduling appointments.3


Steps to AcquisitionAlthough every acquisition and every situation isunique, the following steps provide a general overviewof the process involved in acquiring a practice.Planning__Prepare personal budget__Define your ideal practice__Select a practice broker/consultantIdentify Practice to AcquireAcquisition FinancingPurchasing an existing dental practice comes with its ownunique set of challenges and benefits. Pacific Continental canwork with you and your team of advisors to determine if thepractice is priced appropriately, as well as evaluate the qualityof the location, the value of current equipment and patientdemographics. We can also assist in assessing cash flow toensure the practice is on the right track and have tools to helpstreamline the acquisition process.At Pacific Continental, we will stand by you and helpensure the transition to your new practice is as smooth andstreamlined as possible.Customized OptionsComplex transactions require flexible financing solutions.We can provide a range of financial options suited specificallyto your transaction. And we can meet your timelines evenwhen a purchase needs to close quickly.• Partnership buy-ins can be complicated because of theirstructure, asset allocation and legal requirements. We havedeveloped a streamlined process for buy-ins that is uniqueto the industry and facilitates a seamless transition.• When buying a specialty practice, we typically include agenerous amount of working capital, allowing you timeto meet with the seller’s referring doctors. Our extendedreduced payment periods also allow you time to developyour own referral network.• As with all of our dental-practice loans, we can offer 100%+financing as well as fixed- and variable-interest rate options.Select Your Team of Strategic Advisors__Accountant__Attorney__BankerDetermine if the Practice is a Fit__Perform preliminary due diligence__Consult with your lender and insurance agent toobtain appropriate insurance policies__Review lease termsExecute a Letter of IntentSecure Financing__Obtain a commitment letterConduct Final Due DiligenceTransition Planning__Communicate change of ownership to bothstaff and patients__Meet with your accountant to form a business entityand apply for tax ID number, etc.__Open business accounts: checking, savings/moneymarket and merchant bankcard processingExecute Purchase & Sale AgreementConsult with Strategic Advisors and Staffto Ensure Smooth Transition4


Real EstateAs a dentist, you have worked hard to build and growyour practice. Taking the next step — ownership ofthe building where your practice is located — canprove to be a worthwhile investment for you andyour business.Purchasing property can offer many tangible benefits,such as:• Tax deductions.• Control over remodeling and renovation.• Additional income from leasing space toother tenants.• Building equity.Owning your building also helps position your practicefor success when you plan for retirement or if youintend to sell the business.Ownership can increase your practice value, andit provides a source of secondary income shouldyou decide to retain the property after you sellthe practice.Pacific Continental is here to assist you in navigatingthe complex commercial real estate industry. Ourdental-practice expertise, combined with our deepknowledge of ever-changing local markets, makesus the right choice as your banking consultant andadvisor. We can work with you to determine yourpractice’s short- and long-term growth opportunitiesand identify the best real estate options for you. Weoffer customized plans and financing packages thatfit your specific situation, whether you’re purchasingland or an existing building.Considerations for Purchasing Real EstateThere are some important business considerations to take into account when purchasing or developing realestate for your practice. Pacific Continental Bank provides a team of experienced specialists with the expertiseto provide strategic guidance for the real estate process. Some important things to consider when you arelooking to purchase real estate include:• What are the terms of my existing lease? (current lease payment vs. new loan payment)• Does my existing practice have the necessary cash flow to support a real estate purchase?• How will relocating affect my patients and staff?• Will a move help or impair my revenues?Land Purchase Considerations• Is the land zoning appropriate for a dental office?• Are there any environmental concerns with thesubject property? How do I find out if there areenvironmental concerns?• Are there any city, county or state restrictions ondeveloping the property?• Is this the best use of the property?Construction Considerations• How do I design my office to maximize productivity?• How many operatories do I need, and will I haveroom to grow?• Does my contractor have experience with dentalconstruction projects?• Do I have to pay out of pocket for the soft costsassociated with my construction project?5


Business Banking for DentistsManaging cash flow to maximize profits and reduce expensesshould be a top priority for any business. Your dentalpractice is no exception. At Pacific Continental, we tailorour business banking services to provide extra levels ofcontrol and flexibility that may speed up your collections,reduce your operating costs, increase employee efficiencies,enhance your cash flow and improve your bottom line.Dental-Practice BankingWe offer our dental clients a comprehensive array of accounts,including money market, sweep, zero balance and accountanalysis checking. We also offer enhanced service offeringsand technologies that provide even greater ease of use,convenience and security for commercial accounts, multipleaccounts or accounts requiring specialized service.Online Banking PlusMany practices have multiple users, and some require uniquelevels of access and security. We can provide secure accessfor your accountant and bookkeeper, as well as convenientonline tools to monitor your day-to-day activities and extendyour banking hours.• Advanced Bill Pay allows you to delegate payment tasksand set permission controls for multiple users as well asprovides an option for dual signatures and customizedaudit reports.• Positive Pay and ACH Positive Pay help protect yourclinic from fraudulent incoming electronic items.• ACH direct deposit payroll for your employees.• ACH direct payment plans for your patients.• Wire initiations, federal tax payments, electronic balancealerts and fraud control.Mobile BankingPacific Continental offers a mobile banking app for Appleand Android devices that is also tablet friendly. Our enhancedapp offers many features that make banking even more easyand convenient.• Display online activity and approve pending transactions.• Complete funds transfers.• Send bill payments to existing payees.• Submit ACH single payments/receipts and domesticwires - only available for Online Banking Plus users.Deposit Plus – Remote CaptureDeposit Plus is an innovative online check processing systemthat allows you to electronically deposit checks throughoutthe day, so you can attend to your daily banking needs rightfrom your office. It’s a convenient and highly effective wayto improve your business efficiencies, enhance your cash flowand help ease the often complex nature of your practice.Merchant BankcardOur Merchant Bankcard program provided by Vantiv givesyou all the tools, resources, convenience and service you’llneed to accept all major credit cards and debit cards. Vantivalso provides a number of payment solutions based on theneeds of your practice, addressing both the revenue cycle andhealth care transactions. Along with easy enrollment, youwill also have access to the following amenities:• Ongoing consultation and education.• Equipment troubleshooting for both hardwareand software.• Toll-free number for after-hour emergencies.• Website for transaction research.Lockbox ServicesPacific Continental's lockbox service can help save yourpractice time and money. With direct access to a specifiedpost office box, Pacific Continental collects, processes andposts mailed payments for you.PayNorthwestPayNorthwest is the preferred provider of payroll servicesfor Pacific Continental Bank, offering web-based time,payroll and HR systems, as well as a Smooth Start Programto make switching easy and stress free. Pacific Continentalclients receive special benefits such as free W-2s for the firstyear and discounted pricing. For more information, visitpaynorthwest.com/therightbank.6


Dental Practice Loan ApplicationDatePersonal InformationNameDate of BirthHome Address Social Security #City State Zip PhoneEmail Cell FaxBusiness InformationOwner’s NameBusiness NamePhoneFaxTax ID #No. of Years in OperationBusiness Local (Street Address)Sole Proprietorship/dbaOwnership PercentageType of Ownership LLC / PLLC Business Partner / Proposed GuarantorPC / PSLoan RequestI am applying for this loanAmount: $ Individually Jointly with the following named co-borrower:Use of Loan Proceeds Practice Acquisition Amount Requested $Seller’s NameAddressEquipment Amount Requested $Working Capital Amount Requested $Refinance Existing Debt* Amount Requested $Lender:*If more than one existing debt, pleaseattach list of debts to be refinancedOther: Amount Requested $Strategic Bookkeeper / Accountant PhoneAdvisorsAttorneyPhoneBusiness PropertyInsurance Company / AgentPhoneLife Insurance Company / AgentDisability / Business OfficeOverhead Company / AgentMalpractice Insurance Company / AgentPhonePhonePhonePractice Current office space (sq. ft) Number of OperatoriesDate of BusinessFiscal Year EndInformationAre all of your business taxes current? (Including payroll taxes) Yes NoDo you own your practice’s building? Yes No How many employees do you have?continued >


Personal Financial InformationAssets Amount Liabilities AmountMonthly PaymentAmountCash Cash $Loans(other than RealEstate)Student Loan(s) $ $Auto Loan(s) $ $Stocks & BondsMarketableSecuritiesIRA / Pension $$ Revolving DebtCredit Card(s) $ $Personal Line(s) of Credit $ $Residence $ $Other $ Home Equity Line(s) of Credit $ $Auto $ Unimproved Land $ $Notes Receivable– Personal$Real EstateLoansIncome Property Type_____________________$ $Residence(s) $Income Property Type_____________________$ $Unimproved Land $Loans on Insurance Policy $ $RealEstateIncome Property Type_____________________Income Property Type_____________________$$OtherLiabilitiesOther:_____________________Other:_____________________$ $$ $Income Property Type_____________________$Other:_____________________$ $Other AssetsOther Assets & PersonalProperty$Total Liabilities $ $Net Worth $ $Total Assets $Financial InformationTo help us expedite your loan request, it would be helpful to have some additional information. Please provide us with thefollowing checked items. (Additional information may be required at a later time.)Applicant’s last three years’ individual tax returnsLast three years’ practice financial statementsLast three years’ practice tax returnsAccounts receivable agingCurrent interim balance sheet and profit / loss statementif more than three months past year endProduction and collection reportTwo years’ profit and loss projectionsOther ____________________________________I hereby authorize Pacific Continental Bank to make any investigation of my personal and / or business credit and / or employment status either directly or through any agency employedby the bank for that purpose. I further authorize Pacific Continental Bank to provide information concerning applicant’s credit relationship to credit reporting agencies or other creditors.The statements made herein are true and represent a total disclosure of all information requested on this date.Name of ApplicantSignatureName of Co-signerSignatureTitleDateTitleDateRevised 05/20/14


Connect with us.GREATER EUGENE541-686-8685GREATER PORTLAND503-350-1205360-695-3204GREATER SEATTLE206-676-8880425-688-3793253-552-4800TOLL-FREE877-231-2265EMAILdentalbanking@therightbank.comWEBSITEtherightbank.comSOCIALMay 2014

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