28 May Is This the Right Time to Buy Your First Dental Practice?
For a lot of first-time buyers in the dental market right now, the same question keeps coming up. Should you wait for interest rates to come down before buying a practice?
It is an understandable concern. Borrowing is more expensive than it was a few years ago and with constant talk about the base rate, inflation and the wider economy, it is natural for buyers to pause and wonder whether they should hold off.
But in reality, trying to time interest rates rarely works in your favour.
Most dental practice purchases are long term decisions. You are not borrowing for a year or two. You are typically looking at 10 to 15 years. Over that period rates will go up and down many times. Even the purchase process itself can take six to nine months from offer to completion, which means the rate you see today is unlikely to be the rate you end up with anyway.
That is why most experienced advisers in the dental space tend to say the same thing. Do not let interest rates be the reason you do not buy a good practice.
If the right opportunity comes along, a solid well-run practice in a good location with room for growth, then waiting on the sidelines for rates to hit a perfect level can easily mean missing out altogether.
Interestingly, we are also starting to see first time buyers becoming more active again. After a quieter period, there is a growing sense that waiting for the perfect economic conditions does not really make sense. The reality is that the world keeps moving, practices continue to come to market and good opportunities do not sit around forever.
There is also a wider shift in mindset. More dentists are recognising that ownership is not just about short-term borrowing costs, it is about long term control, equity and building something of their own. Those benefits tend to outweigh temporary movements in interest rates for most buyers who are thinking beyond the next couple of years.
Of course, none of this means affordability does not matter. It absolutely does. Any purchase still needs to stack up properly and working with a specialist dental finance broker is key to stress testing the numbers and structuring the deal sensibly.
But the key point remains. Waiting purely for rates to drop to a specific level is unlikely to be a winning strategy.
If you are interested in purchasing a practice and are unsure about the numbers, we would be happy to review the figures and give you our thoughts on the site, as well as look at the level of finance the business can support.
Get in touch and we would be happy to have a chat.
Assisting with the set up, purchase and expansion of healthcare businesses is what we do.
Contact Saroma, for an initial conversation to explore your options.
