March 4, 2020

Should I Try to Get All Cash or Finance a Portion of the Sale of My Dental Practice?

It’s natural to think that a cash sale is the easiest way to close on your dental practice, but you’ll want to think twice before signing on the dotted line. Though dealing in cash would be great in an ideal world, financing a portion of the sale isn’t a worst-case scenario. Here are the pros and cons of a cash sale versus financing a portion of the sale.

Cash at closing

Today, there are many finance companies that specialize in medical and dental practice transitions. It is then reasonable to expect that more doctors in the last 10 to 15 years are receiving all their cash at closing. This eliminates the risk to the seller when it comes to late payments or defaults.

Financing a portion of the sale

Alternatively, some doctors decide they would rather finance the purchase, which allows them to take the benefit over the course of years. This then also minimizes the tax burden in the first year and provides a regular income. However, the downside can be when the seller does not manage his money properly and takes unwise risks. Either way, your accountants and attorneys should be involved and consulted throughout the process.

What’s next?

Contact the experts at Professional Transition Strategies to decide which option is right for you during the sale of your dental practice.