I recently did some cosmetic upgrades to my office, but my adec unties and J-chairs are functional, but 20+ years old. I have an older CEREC red unit and am considering an upgrade to the blue. I don’t want to get stuck with super high interest rates if the economy tanks, so am considering the upgrading things now.
Well based upon our most recent experience wouldn’t you agree that when the economy “tanked” the rates went down? Maybe it depends on what you mean by “tank”.
My dilemma is whether to wait until things become so worn out that I have to replace them, or do I finance the upgrades now and tack on to my current loan, which I will have paid off in 3 years.
How long will the “upgrades” last and what’s the cost of an upgrade compared to replacing?
I’m in a 3-chair office now, but have the opportunity in the next year or so to move to a larger 4-chair office, so was planning on waiting on upgrades until I can make that move. I just don’t want to get stuck with 10+% loans down the road.
I certainly don’t see those rates in 1, 2 or 3 years.
I was curious to see how long you guys are financing practice/equipment loans. Is 10 years standard on a $500k note or do most go longer.
These are two different loans. 10 years is a reasonable term on a practice loan (to buy a practice) and generally gets paid off in 5-7 years anyway. 5 year terms should be fine for equipment loans.
One thing to consider, depending on the amount you’re going to spend, is to refi the existing 3 yr loan and adding on the equipment costs and go with a 5 year loan. If you continue to do well and have sufficient cash flow you might still pay everything off in 3 years anyway.
This first appeared on Dentaltown.
Send your questions to Tim Lott, CPA, CVA at firstname.lastname@example.org