Should I sell or finance the sale of my dental practice?

Deciding whether to offer seller financing for a dental practice sale is a significant consideration that depends on various factors, and your individual circumstances.

Unlike real estate, which always holds a definitive value, the value of a dental practice can be reduced, significantly, at any time by the negative actions of a buyer post-closing, leaving the asset worthless if the buyer stops making payments.

There are several dental specific lenders offering acquisition financing to buyers, thus eliminating the need for a seller to hold paper in most sales.

However, there are a few circumstances where seller financing may be the best, or only option, such as:

• The practice is located within an area with a small buyer pool.  The one and only shot you may have to sell may require seller financing; or
• The buyer's financial situation.  If the buyer has difficulty securing traditional financing, or lack substantial funds for a down payment, offering seller financing can make the purchase more accessible and attractive; or
• The current market conditions. If obtaining external financing is challenging, or interest rates are unfavorable, seller financing may be a viable option to facilitate the sale and attract more potential buyers.

It's important to carefully evaluate all factors, and consult with professionals to make an informed decision regarding seller financing.

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