How to Offer Dental Financing for Patients

Updated on April 1st, 2022
How to Offer Dental Financing for Patients

Interested in offering dental financing for patients?

Merging salesmanship with dentistry did not sit well with most dentists, a sentiment that is still felt today. 

However, with the increasing need to innovate within business operational processes and flows to create more customer-centered services, more and more practices are exploring the possibilities of finance options for dental treatment. 

A logical move since as early as 2016, stats from Health Affairs cited a significantly higher percentage of persons who had health insurance instead of dental insurance plans to defray their health care costs. In fact, the same report highlighted several financial barriers that impeded the majority of respondents from accessing dental care. 

Credits: American Dental Association Health Policy Institute

In short, dental practices have understood the challenges of their target audience and, in turn, are open to offering an answer to their problems. 

In this article, we’ll provide an overview of dental financing, including some vital information as to what it is, why it’s important, and ways in which you can go about offering it to your clients. 

Let’s dive in. 

How Does Dental Financing Work?

Dental patient financing (also simply known as dental financing) is a process by which a patient seeking dental care can access a line of credit or a loan to cover the costs of their treatments. 

In short, it’s the same type of service that people can access when looking to purchase a car, a house, land, or any type of property or service, in this case, related to dental visits. 

While the services covered by financing will differ based on the dental practice, generally speaking, this type of finance plan can cover the following: 

  • Crowns
  • Dentures
  • Braces
  • Root canals
  • Teeth whitening
  • Veneers
  • Gum Surgery
  • Bridges
  • Dental implants
  • Cosmetic dentistry

As mentioned previously, dental patient financing has never been a favorite among dental practices in the United States.

This does not come as a complete shock when you take into account the fact that offering a finance plan would convert a dental office into either a collection agency, a bank, or a combination of the two. 

Even today, this is not desirable. With bad credit at an all-time high coupled with an unstable economy, it is understandable why dental practices would much rather not bear the responsibility of handling this type of transaction. 

However, when you take a closer look, it is within a dental practice’s interest to offer to finance their patients. 

Is Dental Financing In Demand?

Before diving into the reasons for which offering dental financing options can be simple, we need to make one thing clear: there is a strong demand for it among clients.

The main reason is obvious: dental care is expensive.

Let’s take a look at the facts. 

According to the FDI World Dental Federation, oral healthcare constitutes the fourth-most expensive type of condition to treat. What’s more, an estimated 3.9 billion are affected by oral conditions, which is a significant chunk of the world population. 

Ultimately, the situation painted by these stats and several supporting ones is the following: lots of people have dental needs yet accessing the help they want is expensive.

The high cost associated with the industry along with the traditional tendency of dental practices to not offer financing is forcing people to prioritize other expenses over their dental care. 

Hence the need for dental refinancing. 

Let’s take a closer look at the benefits it offers to dental practices.

Benefits of OfferingDental Financing Options

Let’s get into a breakdown of the benefits that dental refinancing will bring:

  • Incorporate more flexible payment options that make your services more attractive: One of the most evident benefits associated with dental refinancing is the fact that you will increase the chances of securing more clients. By offering greater flexibility in how you allow your customer to remunerate you for your service, you give them even greater reason to want to contact you for their oral work.
  • Foster better customer engagement and appreciation practices: A study by Dentistry ID has highlighted that 78% of dental patients signaled the attitude and general treatment offered by their dentists as an important factor in impacting their overall experience. While this data is decades old, the principles of customer engagement and appreciation remain present today. By offering an alternative payment plan that gives your patients a financial break, it sends a message to them saying that you are aware of the elevated costs of dental care and that you, in turn, care enough to do something to help them out. 
  • Reel in more income through incentives given to potential customers: The benefits that have been mentioned previously all have an effect on one key area within a dental practice: the ability to bring in more clients. Needless to say, the more clients a dental practice has, the more chances they have to bring in more money, grow, and scale their growth to bring in even more clients. 
  • Stand out as an innovative and modern dental practice: At a time when thousands of dental practices still haven’t started offering this type of service, you can stand out from your competitors as being one that welcomes innovation in their services. Being noticeable helps your business to be more attractive to potential customers and even put you in the position to be of interest to other companies and organizations who might be willing to collaborate with you. 

All in all, the benefits are appealing. Now, it’s time to look at just how you can offer dental financing. 

How to Offer Dental Financing for Patients

Let’s dive into the longstanding ways in which dental financing has been done: 

1. Traditional Third Party Financing

Patients who opt for traditional third party financing use their credit cards to cover the cost of their dental treatment. This is one of the most common practices. In fact, its use is so common that it is understandable why some people would forget that it is a financing option. In a nutshell, when issuing a payment with a credit card, a dental practice is paid within forty-eight (48) hours.

 When that is done, the issuing bank with whom the card owner is affiliated assumes responsibility for the nonpayment on the part of the patient. Banks cover most of their risks by claiming 100% interest on all payments that are not made during the billing cycle.  

However, there are two main disadvantages to traditional third party financing: 

  • Your dental practice gets charged a processing fee by the issuing bank. In essence, the bank is charging you for facilitating a payment transaction with your patient through their finance options. This fee usually constitutes 2.5% to 3.0%. 
  • Not all your patients have a credit card. While this type of practice may be commonplace, the reality is that not everybody owns a credit card. Therefore, a solution still needs to be available to those persons who cannot access this type of financing either due to them not having a credit card, having a poor credit score, being rejected for credit approval, or any other reason.

2. In-House Dental Financing

In light of the challenges associated with traditional third party financing, It is not uncommon for dental practices to set up payment plans within their own processes to help their patients. In such cases, a dental provider or dental officer assumes full responsibility for future nonpayment of the dental procedure or dental work done to the client.

With in-house dental financing plans, the dental practice is the one who sets up the plan, interest rates (if necessary), deductibles, down payments, monthly payments, and defines the general parameters surrounding the dental operation and subsequent financial compensation that the patient needs to pay. 

While some general dentistries do this, others haven’t been too keen on doing so because at the end of the day, while it may pay off, it still remains the riskiest finance option. If a customer doesn’t pay, then the practice is left to pursue a long legal battle to recover the money owed, one which is sometimes not even worth the effort.

This leaves the last finance option available to dental practices: 

3. Dependent Third Party Financing

When compared to the previous two finance methods highlighted previously, the dependent third party financing method is the most attractive.

This option means that you partner with a third party financier (lender) with whom you negotiate the terms and conditions surrounding the service you offer.

Through this plan, you get much more flexibility to offer dental service payments to clients that are more customized to suit their specific financial needs. In turn, you get to increase the scope of patients that you appeal to by streamlining your payment options with their financial profile.

You can partner with us at Time Investment Company to offer this type of service.

Here’s how it would pan out.

How to Streamline the Financing Process

Being a family-owned investment and loan business operating in a small state such as Wisconsin, we at Time Investment Company are particularly sensitive to the needs of small and medium-sized businesses.

This is even more true for dental practices and their patients. We know that millions of people throughout the world need orthodontic care. However, so many cannot access it because it is too expensive.

We hope to change that.

Dental practices can collaborate with us as a dependent third party finance company that works closely with our partner businesses to identify viable finance plans that will be attractive to their customers. 

We offer loan programs that will fund their operation irrespective of their dental needs. This, in turn, helps you by offering a competitive finance package to your customers that enables them to secure the orthodontic services they need with a repayment plan centered on affordable monthly payments. 

We offer almost instantaneous credit approval for customers. What’s more, our loan approval rates are high in comparison to other lending agencies. 

In short, with us, your dental practice can get the finance options needed that’ll keep your customers happy and your business afloat. 

Ready to Start Offering Dental Financing For Patients?

In today’s world, dental practices need to start incorporating financing options in their services. 

The benefits are too numerous and too profitable to not do so. 

However, the key is to select from the three finance options possible, the one that will yield the most benefit to both you and your customers.

Dependent third-party financing is the way to go, and we at Time Investment Company are committed to working together with businesses to forge a path for the betterment of their operations and their customers' oral care.

Contact us via our phone number (800) 236-1177 for more information on how you can get started with offering a flexible finance program to your clients today.

Mike Farrell

With over 30 years of experience in the financial industry, Mike Farrell currently leads operations at Time Investment Company.