STARTING
OUT:
1.
Interview prospective CPA's and Attorney's to assist
you in the purchase of a practice
2.
Prepare a personal financial statement (any bank can
provide you with a blank form)
3.
Prepare a resume or curriculum vitae
4.
Interview Lenders - 100% financing is available
5.
Search for a practice that fits your requirements,
size, location, affordability, etc.
6.
Start the application process for securing a Life
Insurance Policy in the amount of a loan
7.
Provide a Delta Dental fee schedule.
WHAT
A LENDER WILL ASK FOR:
1.
Personal Finance Statement and Tax Returns
2.
Business Plan for Practice
3.
3 to 5 years of financials on practice you propose
to buy (P&L's and Tax Returns)
4.
Resume or Curriculum Vitae
5.
Dental License
6.
EPA Number from state
7.
Life Insurance
8.
Disability Insurance - not always required
9.
Business License (copy of application)
10.
Copy of Sales Contract including allocation of purchase
price
11.
Lease assumption or negotiate new one, purchase of
building
12.
Credit report- minimum 1 to 2 years as a dentist
DUE
DILIGENCE:
1.
Review financial information and have CPA review information
2.
Visit practice interview selling dentist
3.
Set time to review patient’s charts
4.
Inspect practice equipment and supplies - seller warrants
equipment in working order at close of escrow, no
warranty after close of escrow.
5.
Have attorney review contract of sale, lease, loan
documents, promissory notes, security agreements,
equipment leases, etc.
6.
Meet and interview staff, preferably 2 or 3 weeks
prior to take over
7.
Review compensation and benefits of each employee
with selling dentist
INSURANCE
NEEDS:
1.
Life Insurance - collateral assignment to cover loan
2.
Disability Insurance for seller financing
3.
Malpractice Insurance - verification for loan and
seller financing
a.
Require "on door" endorsement on buyer's
malpractice insurance for use of seller's name for
a year.
4.
Office Business Package - workers compensation, fire,
theft, liability, contents of office.
DOCUMENTATION
OF PURCHASE PRACTICE:
1.
Contract of sale - broker to prepare draft contract
of sale
2.
Buyer to have attorney review draft contract of sale
3.
Seller financing will require a promissory note
4.
Security agreements - what assets used to secure note
5.
Office lease - assume or negotiate a new one
a.
Terms must coincide with bank loan
b.
Landlord named as loss payee on office insurance policy
PERMITS:
1.
Dental license
2.
Business license
3.
Employer id numbers for state and federal government
4.
EPA number
5.
DEA license - notify of change of address
ADVERTISING:
1.
Letter of announcement prior to close of escrow
a.
All patients seen in last three to five years
b.
Broker to provide sample letters
2.
Review Yellow Page advertising
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