November 2013 Small Business Lending Index Gives Edge to Alternative Lenders When It Comes to Approval Rates

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Although small business lending is starting to rebound, banks approve fewer than one small business loan application for every five submitted. Merchant cash advance company DB Squared advises that dental practices on a growth track may want to put alternative lenders on their short list of financing options.

financing for dentist offices
"Our goal is to help our clients realize immediate revenue and sales increases to compensate for the extra payments they are incurring." Kelly Bingham, DB Squared Merchant Cash Manager

Though nowhere near pre-recession levels, the second half of 2013 saw an uptick in small business lending from traditional lenders, like big banks. But with fewer than 20% of small business loan applications receiving approval, it is not a surprise that alternative lenders had a big year, as they sought to fill the small business financing gap.

In fact, the approval gap for small business financing is striking. While banks approved fewer than one small business loan application out of every five submitted in 2013, the Biz2Credit Small Business Lending Index for November 2013 noted that alternative lenders are able to approve financing for about two thirds of all small business financing applications received.

Most dental practices are small businesses, and depend on consumers having adequate disposable income to afford dental services not covered by insurance, so they face the same cash flow and growth financing challenges as retail counterparts. Since many U.S. consumers experienced a decrease in disposable income and some lost a portion (or even all) employer-provided benefits during the Great Recession, many dentist offices experienced a corresponding decline in revenue as well.

This kind of cash flow constriction limits the ability of dental practices to execute the kind of marketing campaigns needed to attract new patients, make repairs to equipment or facilities, renovate, purchase new equipment or expand. Dental loan alternatives like merchant cash advances can help solve these types of common cash flow challenges, and may be an appropriate dental practice financing option, especially when the practice is planning for growth.

Dental practices that need financing to implement strategic marketing plans, make repairs or renovations, finance dental equipment purchases, or expand by adding new service capabilities, developing additional square footage or expanding into new locations may need look to alternative financing solutions, especially in the absence of the collateral, credit score, or time needed to obtain a traditional bank loan.

Among dental loan alternative financing options, merchant cash advances like those offered by business financing company DB Squared may be best suited for dental practices with business and marketing plans which are likely to result in new or increased revenue streams. Since cash advances are usually paid back much more quickly than bank loans, the growth strategies implemented by a dental practice can help them become more profitable even during the period when they are repaying the cash advance.

“Unlike loans, merchant cash advances are paid back as a small percentage of each debit or credit card transaction,” said Kelley Bingham, Merchant Cash Advance Manager at DB Squared Inc. “Our goal is to support growth for our clients, where our short term advance can be used for equipment or other investment opportunities and the merchant will see immediate revenue and sales increase to compensate for the extra payment they are incurring.”

Compared to bank dental loans, merchant cash advances come with higher rates, because they carry a higher risk; but the benefits of obtaining financing within a few business days, regardless of lack of collateral or even a poor credit score may make them an attractive option, especially when financing is key to growing a dental practice.

Because merchant cash advances are still a relatively new form of financing, it is important to know what to look for when selecting a merchant cash advance company. “We are really proud of our “A” rating with the BBB,” notes Tom Glazier, Vice President of Operations at DB Squared. “We present our financing proposals to clients in a very transparent way, with no hidden fees. We feel like this ultimately results in a higher level of client satisfaction. In turn, our reputation paves the way for doing business as a merchant cash advance provider with new clients.”

As with any type of business partner, both reputation and transparency should be key considerations, as are their financing rates. Other questions to ask include how quickly they can turn around funding after approving a client, how attentive they are in managing client accounts, what type of customer service they provide, and whether they offer flexible repayment options that align with the client’s sales trends.

A repayment schedule typically lasts from six to twelve months, so it is important to do your homework up front so that you are not disappointed or surprised later on. Do not be afraid to ask for references or whether you can speak with one of their other current or former clients before you sign on the dotted line.


DB Squared is a privately held business financing company that provides receivables financing services and merchant cash advances. Headquartered in Seattle, Washington and owned by a 30 year old private consumer finance company, DB Squared serves businesses located throughout the United States. For more information, visit

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Tom Glazier, VP of Business Operations
DB Squared Inc.
+1 253-344-5960 Ext: 890108
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