Phil Cole 0:05
Hello, and welcome to KLAS Solutions dental education Podcast, the podcast series where we share knowledge and experience to provide value to you and your dental practice. I'm your host, Phil Cole. And in today's episode, we're gonna be talking about healthcare banking. We want to give you download specific perspective on what types of banks you should consider and why. And so today I'm joined by Rob mortaring, of panacea, financial, who will be sharing his thoughts and experience. So Hello, Rob to the podcast. Welcome. And, yeah, so tell us a little bit about yourself. I mean, you got quite a bit of experience and stuff. You've been working with you now, when you went went over to panacea, you guys have been doing a great job. So just give us a little bit about yourself.
Rob Borcherding 0:54
Yeah, so, I've been in banking and lending since since coming out of college, actually. So I was with another big bank for 22 years. in various capacities, consumer lending, like actual just regular banking, you know, retail banking, credit card processing, and then practice finance. So over my tenure, with my former employer, yeah, a lot of different experience across consumer and business and other retail banking operations on top of the practice lending that ended up at a couple of years ago now, actually, two years ago, for Labor Day, actually, I joined panacea. And Phil, as you know, you know, panacea is a is a bank that was founded by a couple of physicians, who wanted to change the way that banking and lending works, specifically to doctors so our motto was kind of for doctors, by doctors. So, you know, with that at, you know, I saw it as an opportunity to kind of take my, my skills to to help a very specific, specific bank. And it's been fun, the last couple of years have been, have been great. So yeah, I've really enjoyed the change. And as you know, we were just, it's a fun, it's a fun thing, when you have people that come from these industries, wanting to change something, and then you have a different philosophy inside the culture that then allows you to kind of kind of do things a little bit more uniquely, as well.
Phil Cole 2:24
No, absolutely. So been doing banking for quite some time. You know, and, of course, we have the, we still will revert back to the old COVID days and stuff like that. I mean, there's a lot that has changed in healthcare over the last two decades. And so just give us a little bit of a background on I mean, especially, like you said, with your years of experience, kind of what has evolved over the last couple of decades.
Rob Borcherding 2:54
Yeah, and I mean, I'll be the first to admit, Phil, also, there's been people around in this industry for 20 years longer than I have, right. So I mean, the the the practice lending, I guess, history of practice lending, I should say, really kind of started, you know, back in the 90s, you know, the formation of a couple of very specific lenders, that, you know, before then, you know, there, there just wasn't necessarily a dental or a healthcare specific focus, where, where you have a specific credit policy, and I'll get to that in a second. So, so really what what kind of changed and morphed over the last 20 or 30 years or so is that people in banking institutions started to realize the ultimate risk with these industries, you know, dental veterinarian, tamo, tree, you know, physician private practice lending, where they saw like, hey, these, these types of businesses don't have the same risk as a engineering firm, you know, an auto body shop or a restaurant, you know. And so, what happened is that you had this natural evolution of policies that then became specific to the nature of the risk, right, whether that being no covenants, better pricing, faster turn times, you know, whatever it may have been for that specific lending institution. So basically, the bank policies got changed. And the guidelines got changed into accommodate for these industries, right, because, again, you know, people throw up those statistics out all the time about, well, how many dental practices actually fail? How many vet practices actually failed? I mean, obviously, there's still there's still practices that don't make it. But when you look at them compared to other industries, it's it's more I mean, we always say they are recession resistant. Right, not not recession proof. Right. There's still ups and downs in these types of industries, but Basically what happened is that these banks over the period of time, created these niches in these in these credit policies and these credit programs that were specific to a doctor owning and operating a private practice, right. And you have to be a doctor to qualify, right. So if a nurse practitioner or if a vet tech, or a practice manager wants to start a practice, that's not the same, it was founded around owner operator, right, the doctor is in the practice, they're doing things themselves, they're controlling the patient care, they're controlling the practice. And with that, the risk is lower, right, because they have everything invested in their future. So as more and more experience and more and more data, you know, kind of came out with how these these loans performed, you keep seeing an evolution, right, you keep seeing an evolution of guidelines on specific components to these loans. And these programs, the basics are still there, right? Like you still have, you know, a debt service coverage ratio, right, the practice has to cover the debt plus of cushion, right, you still have paid, the applicant has to have a minimum FICO score of x, right, depending on depending on the lending institution. But what's ultimately changed, as you know, Phil is like this, this term that gets thrown out in banking all the time and lending for these practices loan to revenue, right, or loan to gross annual revenue, you know, what used to be 70%, of gross collections, or gross revenue, went to 80. And then it went to 85. And, and then 90, and now you have, you know, some lending institutions out there that will go to 100, or even higher. So what what you've seen is that lenders have continually stretched as more data comes out on what makes a loan go bad, or what makes a doctor's character cause a loan to go bad if the practice isn't successful. And and it's just, it's just evolved, right? It's just evolved just like the industry. Liquidity is another one, right? Hey, a doctor has to have X amount in the bank to qualify for X amount on the loan. Right? And there used to be hard lines, and all these loans, all these these things have kind of just evolved, right? There's been a natural evolution of the more data you have to back up a decision. And the more the more of just emphasis you have on these specific programs, and you built them then you look backward. Like oh, that those loans are okay. Right. Well, what if you stretch a little further? You know, our chief credit officer, rich fortino I mean, he was at PNC healthcare lending, TD healthcare lending, Citibank health care lending. So when you have 2025 years experience, on watching these loans, you know, mature and either either do well, or underperform. I mean, that's kind of where all these policies come up as people like rich, and other people in our industry. Just know it now, because they've been doing it for 2030 years. So that I think that is probably Yeah,
Phil Cole 8:08
well, I was just gonna say, I think the other thing, though, that has, and the years that I've been, you know, involved in, in stuff, which, you know, hasn't been as long as you but, you know, what I've noticed, though, too, is is how the cash flow debt services has become almost the key proponent, right? If there's enough there for a bank, then that kind of is dictating the size or the percentage of the loan to, because I know when, when, you know, before COVID, man, everybody was pushing that 100% value stuff COVID hit and then I don't know how many bankers I talked to, or lenders at that time, were like, Yeah, we are nervous, we gotta reset ourselves. And everything kind of went back to, you know, 2020 of the, we're paying 70 to 80%, you know, or 60 to 80%. We're not going over 80 You know, and so you just start telling people that but, you know, once again, it's just kind of funny, because when that when every almost every dentists rebounded from COVID You know, that was the big worry, well, they rebound, blah, blah, and when they did several different ways, but when they did, where I noticed that we're getting right back to that thing where each bank and you know, especially with interest rates, now, it's now I see where banks are throwing, like, well, we're gonna go 5% higher than any other bank, you know, and it seems to be like, instead of interest rates now, it's how much will we give them to try to beat out the other competition? Am I wrong, or I just, you know, that it keeps creeping in. It's like, when will it stop?
Rob Borcherding 9:55
Yeah, like there's a couple couple points in there. First of all, like well, Yeah, I mean, if you look backwards, you got the recession, the great recession from oh seven, basically to 2013. Right? So, so the lenders that were out there, you know, Bank of America, Wells Fargo as an example. I mean, they had, you know, millions of dollars in their portfolio, and they learned, you know, what happened during that period of time, with, you know, the housing crisis and the recession, etc, right. And then, and then they saw this many, you know, loans went bad this many, but man, a lot of doctors did talk, right. I mean, obviously, there, there was a lot of issues at that time. And then we, you know, we're buzzing through the 2013 to 2020, and then the pandemic hits, right. And there's another new experience that tests the portfolio of all these lenders that had millions, if not billions, of dollars of practice lending on their books. And, and then, you know, we see the rebound in 2021. And now, we just got through 2022. And now we're almost done. So yeah, every year that goes by, and every, I guess, economic event, you know, triggers a testing on the portfolio, which then everybody learns from, and then and then you have that experience written into your portfolio into your, into your mind on how to make the decisions for the next one, right. So like, like, it's
Phil Cole 11:11
the risk become the risk becomes less and less, basically, is what you're saying, because of the of the fact that the stats show that we made it, you know, that we keep we made it through this, we made it through that, and so forth, is really what you're saying, right?
Rob Borcherding 11:27
I mean, just the risk, the risk appetite for any lender gets tested with each one of these economic events, right. So, you know, whoever the portfolio was through the COVID pandemic, I mean, they now have a very significant economic impact where you were forced to close for two months and just do emergency procedures. Right, right. And then, man, that that, like everybody did, you know, basically a 90 day deferral when March hit in 2020, because nobody knew what was going to happen. And then, you know, things happen with with whether it be the PPP loans or, or the, or the kind of like, what we call the lag. So people the rush to come to bounce back, right, and 2021, everyone came back in for those. Like, there's just so many things that happened during that period of time that tested each banks portfolio, and the credit officers of each lending institution, then learn from that, analyzed it, and then are using that to make decisions on today. Right, right. Now, the other thing you're talking about there is is just the inherent nature of practice learning, which is blue sky, right? Like, like, if you're doing a loan for a dentist, and they're buying a practice for a million dollars that's doing 1.1 million in collections or whatever, for whatever reason. I mean, what's, what's the bank's collateral for that? I mean, used equipment, right? used equipment and a Rs. So when you're when you're, I mean, you guys do transitions, right? I mean, when you're selling that practice for a million dollars, and you're doing your valuation, there's goodwill, and there's hard assets. And I mean, if that loan goes bad, like, what is that bank can even be able to grab and resell? Right, right. So, so blue sky lending, then were versus a manufacturing company that has, you know, millions or hundreds of 1000s of dollars in equipment that you can collateralize to make a decision on and you can always take that back. I mean, that that's kind of where things evolved, right, when you saw the collateral based lending, versus what we consider more cashflow based lending, which is which is lending to blue sky, because it's all about what the doctor will make to cover the loan, not what assets you can take to cover the loan. Right. Right. And so that that leads into your last point you were just talking about, which is yeah, like, like cash flow is king, when it comes to supporting a doctor buying a practice or whatever they might be doing expanding their practice. And, and so as these practices, cashflow, and as you look at the transition plan, you know, what the buyer can do versus the seller, the seller staying, I mean, all those things that go into a business transition, right, as long as the cash flow continues, and the price can be substantiated. When when when it comes to acquisition lending. I mean, yeah, like, again, cash flow has always been king, and right. And that's kind of how all of us in the industry, you know, continue to make these decisions and look at the risk. Right.
Phil Cole 14:26
I think that if more than anything, the most important thing is any sellers that are listening to the podcast today. Is is so important to what has just been discussed so far, to understand how to make sure that you have good books showing good cash flow. Instead of you know, we just ran into a dentist that 15 years of, you know, loss on their practice, not saying they can't sell it, it's just a case in point we got to do a lot of work back in that out everything and it does show to a buyer, the perception of this isn't a very well run practice, or the guys that like I said, our should you know, running, we have one right now and in one of our states that we're that we're working with 90% overhead, that's, that's just a tough, it's a tough sale, right? That's a tough thing to go to go over. And so getting those things cleaned up is a big deal. So another personal experience that just came across my desk last week, have a buyer that wants to buy into a partnership practice and stuff. And I was letting them know that they should, you know, first let's get banking taken care of, right? I mean, there's just no sense of, I don't know how many times I run across buyers, and they haven't even talked to a bank yet, but they want to buy a, you know, a $1.5 million practice. So in this situation, the buyer said to me that, you know, I've talked to two national banks. But then I said, okay, so who's the bankers that you talk to? And they gave me names that I wasn't familiar with? And I said, Okay, I'm not familiar with them. And how did you get their names? Well, I called the national hotline, they said, and they gave me these to come to find out their bank branches in this. And so my always thing is, is I like dealing with the, with banks that are more national based healthcare, lending specific banks and stuff like that. But the buyer says to me, what is that a problem? I don't know if it's necessarily a problem. But yet, on the other hand, with your experience, you know, what is the difference between a national bank, then you have these regional banks, but then you have like, literally, like, you know, First State Bank, that's, you know, in Midland, Michigan, here, that's just a local bank that has five branches. So what's the difference between those for a buyer going to get a loan?
Rob Borcherding 17:08
Yeah, yeah. So you know, kind of getting back to the evolution. I mean, what what you'll basically like my advice to any any doctor or physician that that's, you know, looking into practice lending for whatever reason, becoming an owner, partner, whatever is, is just ask a couple questions like, number one, that the difference is like, hey, is there a specific policy that is dedicated to my industry? Right, like, like, like, because when you look at a local bank, you know, small town, whatever it is one branch, I don't know how many million they have in deposits on hand, whatever, whatever it may or may not be, but that that bank probably does, what, one a year, right? So so do they have? Or have they taken the time and energy to write a dental or veterinarian or whatever it might be specific policy that caters to that industry? Like, like, I was just talking about the decades of experience, knowing the risk of those industries, where then the policies and the procedures and the closing and the parameters and what we call covenants exist or don't exist, because they have experience with that, right? So. So like, think about a dentist, like, hey, the I do one implant a year. So if I'm a patient, and I'm sitting with that dentist, and like, I'll do that implant? Well, yeah, I mean, you believe that, hey, you're a dentist, you could do implants, because you said you can, right? Hey, you're a bank, you lend money? Because you say you can to me, because I'm a dentist. Right? Right. But but in the background? Well, do they have the procedures? Do they have the ability? Do they have the technology? Do they have the expertise to do that procedure efficiently and cleanly? Because they do it all the time? Or is the patient you know, not going to like why they're fumbling around like this is taking because it's taking too long or not? Like there's no perspective because the patient's just in the chair. So that's kind of a good analogy for like, like a bank that knows what they're doing, because they have a policy and people dedicated to it, versus a bank that, you know, the regular banker who also does manufacturing, lending, who also does restaurant lending. Oh, yeah, I do dental. Right. i Yeah, we could do that. Right. What can they really? Right have? Do they have the expertise? So So I agree. Yeah. So asking like, Hey, do you have a specific policy? Do you have a fulfillment team? Do you have an underwriting team that's dedicated just to this because again, you're gonna get a seamless process and more fluid better experience better product in the end, versus the local regional one that might just do the one offs, right. You know, like, hey, yeah, we've done healthcare lending. Okay, but do you do health care lending? Right, I It's kind of an easy way to to say it. But that's kind of it in a nutshell and that well, that goes Back to the first question, right? Like the evolution. So the doctor that's owned the practice for 2030 years when they got that practice, lending was way different than what it is today. And so those sellers, who like, Oh, I just got a loan, my local bank just helped me buy that practice or whatever, I did it by myself. Today, they may not understand why, you know, you have to go back and look at the historical financials of your practice to make sure cash flows to substantiate the price. And that's kind of your, your job when it comes to talking them through like, No, we have to show that it cash flows on paper,
Phil Cole 20:32
right. So yeah, no, absolutely. Okay. So the other question I have for you is, is it gets brought up all the time? I'm not I know that there's a place for it. But it seems to me once again, that it goes in to, to me, I guess, with my transition experience, it goes in waves. But the big three letters that you hear SBA, you know, they're coming up often, again, just so people understand. I'm not, I mean, I'm not a fan of them. They have their time in place. But I'm not, I think that there's some times they get brought up and sold very hard to some people. And so what, when is the right time? Or what's the right place for an SBA loan to be used versus a conventional loan?
Rob Borcherding 21:27
Sure. No, I mean, I get this all the time to so it's, it's wise to just understand the differences, right, and to educate yourself. So in general, right, just to kind of talk about SBA, small Best Business Administration, that program exists to support any small business across all industry based empire, right. So so again, manufacturing, a restaurant, Out of Body Shop, you know, engineering, whatever, if you want to start or buy a business, SBA is built to help people be able to do that, because it's a government backed program. And basically, you have to follow those parameters. So it's universal across all banks, basically, because there's standard operating procedures that every bank has to follow. And, again, it's there to help anybody who wants to be a business owner to support the economy, right. But it's government backed. So with something that's government backed with, which basically means to anybody who doesn't understand that is that if, if a bank does an SBA loan for a restaurant, and they follow all procedures, and that loan ends up going bad, because of whatever reason the restaurant closes, doesn't do well, a certain percentage of that loan is backed by the government. So the bank's risk goes down, because their loan, their losses are covered. It could be all the loan, it could be a portion of loan, it depends, right? But but the basics is SBA exists, because the bank can take additional risk to helping people create businesses or buy businesses to to, you know, support small businesses across the country to support employment, etc, with less risk to the bank. Okay, so that's, that's, that's what basically the the nature of SBA loan is now with that there's fees. And there's there's red tape, and you have to follow things, because, again, it's a universal. So when somebody then going back to kind of the evolution of banking, when somebody is in one of these health care industries, and they like they qualify for a conventional in house portfolio practice loan. There's a reason why those exist, because they're typically better the terms are better, less fees, less red tape. So, you know, again, there are times and places for SBA loans, and I just encourage anybody to to make sure you if you hear SBA, ask why. Right, like, Why do I have to do SBA? Why can I go conventional, like, like when you're buying a house, FHA loans exist Federal Housing Administration, and there's conventional, everybody knows, because houses transact all the time, hey, an FHA loan has less down but then you pay primary mortgage insurance. It's a great program for people don't have a down payment to buy a house. Right? But if you have enough to down to buy your house, don't pay PMI don't pay the fees, do a conventional loan. Right? And it's, it's the same thing with health care lending. But you know, people just aren't aware of the nature of the industry's banking and lending programs. So, again, like SBA exists because you like you can use projections right? SBA uses projections, because then you can step substantiate the risk you're doing because you're helping the doctor expand or grow, even though they don't make enough today for For the loan, you know, they're adding an opera to where they will afford the loan tomorrow. And it's backed by the government. So therefore the bank can make the stretch. But that's a reason why you should do an SBA loan if you need that. But again, conventional loans, generally speaking, have better terms. And so it's red tape.
Phil Cole 25:18
So when you get into an SBA loan, is there just for someone that may be in one right now and stuff? I know a lot of times they don't read always the you know, the whole contract and stuff. Any anything for the buyers out there that I mean, can you pay it off early? Does are prepayment penalties. Can you get out of that? Can you refinance an SBA loan into a conventional loan after a few years and stuff like that? Or because it's a government funded thing? Is there the rules don't allow for that kind of stuff?
Rob Borcherding 25:53
So the answers questions aren't well, of course, yes, you can refinance it, but But it depends, right? There's two different types of SBA loans. There's, there's something called a seven a loan, those seven day loans have a three year prepayment penalty. So if you did the SBA loan with last three years, you may, you won't, you shouldn't have on or absent, if you did it within the last three years, you may have on after three years, you should be clear. And then there's something called a 504 loan, a 504 loan is a different loan, but basically this there's a second mortgage or a second loan. And that's a bond that's called a debenture, it's a bond that has a 10 year prepayment penalty, because it's a bond. Right? It's, it's, it's it's a government backed bond. And so the investors who buy that bond need to make that money, right, because it's a guaranteed kind of guaranteed rate of return. So so that loan you have to be a little more careful with, and there's more parameters around it because of the bond. But in like SBA loans, also, depending on the bank that originates them, may have a variable rate may only have a fixed rate for five years, it could be fully fixed, fully amortized. So again, anybody who has an SBA loan, and they will the prime rate, and the federal funds rate has gone up significantly over the last two years, those if they were in a variable rate loan, you're gonna see SBA loans really go up, I just helped somebody refinance out of the SBA loan, because they bought the practice eight years or seven years ago, whatever, didn't realize there was practice lenders, so they went to their local bank, who uses an SBA loan to buy by the real estate, and by the, by the practice, and their rate was 10 point something. Right. And so we refinanced on, you know, significantly lower rates, because that rate had gone up significantly over the last two years. So that's I would
Phil Cole 27:35
just go say, speaking of that, that is something I think that gets that gets missed a lot too, is once again, you fall into that loan, and you get into the your monthly payments, and you're not paying attention to once again that contract and stuff. How much do you see right now, the that anybody listening should be looking at if they've had their loan for 1015 years, should be looking, especially if they have an SBA shouldn't be looking at refinancing because of those balloon payments and different things going, probably paying way more than what they should be?
Rob Borcherding 28:09
Yeah, and my advice is to, you know, just like you probably watch your home mortgage, right, you knew, hey, I know what my rate is on my home mortgage, or hopefully, you watch that is to do the same thing. Just watch the market. Again, talk to a practice lender, local bank, may not have the ability to refinance, that they don't have a health care lending program. And if you're in a loan that you did, however, many years ago, just watch for rates go, right? I mean, just like your house. So it's always wise to have a financial adviser or a CPA or yourself, right, just be aware of market conditions, and know where the rate environment when the fact of the matter is, is that rates two years ago, were significantly lower than what they were today at what they are today, you know, by, you know, maybe 4%. So, if you didn't refinance in 2021, or 2022, right, you may have missed the boat. But if you're in a loan, though, that was pegged to the prime rate or the federal funds rate, those loans still have gone up. And there's still opportunities for you to help yourself financially. And just know that a practice loan, just like just like your home mortgage, because there isn't the fees and the rigmarole with an SBA loan, if rates go down after a few years, because you know, there's there's prepayment penalties and practice loans, too, but you always have the ability, at least watch it and to better yourself financially. And I mean, well, I wouldn't get into the fact that every practice every few years probably needs additional financing for upgrading technology, refreshing their office, whatever it might be. So just having a relationship with a lender or bank that you can reach out to because you know, they have a program and they're there to service you and talk you through to retain your business. It's just smart financially to just keep your debt payments, as well. as they can be, so you can just go back to your chair and focus on what you do best, which is practicing whatever your specialty, whatever your trade is, because that's the one thing about owner operator private practices, you make money by being in the chair with patients, right? It's not watching where your loans go, right. But if you don't watch where your loans go, because you are the entrepreneur as well, then you might lose money because you didn't pay attention to where rates were. So like, you gotta you got to, you know,
Phil Cole 30:32
you got to watch both because you're an entrepreneur and a doctor. So I just know, like, with our business ownership, coaching and stuff, that's one of those things that, you know, we bring into, you know, there's certain checklists, right, that you got to make sure that you're paying attention to, it doesn't have to be a weekly basis, stuff like that. But, you know, there's, there's that once a month, there's that every quarter, there's every six months type checklist of things that you should be paying attention to. And that's one of them, especially depending on what you what you got into. But, you know, if we ever get back to interest, people that are buying now at what 7% around that range, you know,
Rob Borcherding 31:12
saying sevens, yeah, I mean, the bank, right? But yeah,
Phil Cole 31:15
right. So in three years, if we go if we were three, four years to go back down to the 3%, again, and you're not paying attention to that you're missing out on a tremendous amount of of money to refinance, you know, for that at 4%. So,
Rob Borcherding 31:34
and I hope we never go back down that low again, because that means something economically happen to cause that and trigger the rates coming down that far. But I mean, historically speaking, yeah. Well, again, you just want to be smart with your money, right? Do you have a financial advisor to manage your wealth, you have a financial advisor to manage your 401k or whatever. You don't have a have a financial institution that that you can reach out to and just ask them questions, because you know, you can ask them, do you need to do it quarterly? No. But watch the market. CMB, CNBC, what I mean, again, doctors are business owners, there's a lot riding on their success for that, for that business, just be aware of market conditions, but you don't need to, you know, don't need to read about a weekly, but maybe monthly quarterly, or biannual in whatever. Yeah, or semi.
Phil Cole 32:26
So, I've, we've, I've heard you go back and forth. And I know we've and other podcasts that we've we've talked about this, but let's get your opinion, because I hear you go back and forth. The lender, banker, lender banker, yeah, what is when when choosing what are you? What's the difference? Lender? Banker? And yeah, who supports what and better or worse or whatever, you know, I mean,
Rob Borcherding 32:53
yeah, like, I Well, so, it's funny, I always don't really consider myself a banker, right? Because in my head, a banker, you know, helps day to day they manage your deposit accounts. They, they, you know, oh, I need to put a stop payment on that check. You know, you call your banker, right. You know, a lot a Lending Specialist, you know, helps you with that, that situation, right. So like, like how panacea works. And Wells Fargo Works the same way and some of the BMA works the same way where you have these these lending specialists, I'll say, just for lack of things, other terms, we used to call ourselves but we guide people through the process of getting approved for a loan, what they need to provide, give them advice on how to do it, maybe look at the cash flow. And then once we complete that transaction, we all have like an actual business banker or personal bankers that then support the doctor with quote, unquote, day to day banking, right? Like, like, think of your home mortgage person, when you do a home mortgage, does that person help you with your personal banking after you do your mortgage? No. Right. So a home mortgage person is a home mortgage consultant or mortgage lender. So that's, that's kind of what I relate to, because I feel like my job is to be the specialist to help them through the transaction. And then panacea as an example, we have business bankers and personal bankers, that then will help people with their day to day Do we go away? No, like your lender should always be there. You should always be able to text them call them if you have a question, but we hand we did our specialty job. Now it's time to hand them off to the next specialist that then, hey, you want to talk about treasury management, you want to talk about credit card processing, you want to talk about the deposit that didn't go through or that that you know, someone got a hold of your information to cancel put a stop payments and stuff, right that's that's what I call a banker, but whatever it is that you might be again, just have a path A specialist that understands the situation. And that kind of goes back to, you know, maybe local banks, regional banks versus a practice bank. Like, like, I've gotten calls from people where the local bank is doing the loan to help them with like the expansion, or and then they call me saying, Hey, I shouldn't need to do an equipment loan. Why do you need to do a credit loan? Well, I ran out of money with my other approval. Well, how did you run out of money with the other approval? Well, my local bank didn't approve me fair enough. Like, okay, well, why didn't they approve you for enough? Did they not understand that you need X amount? Well, yeah, but they didn't like, Okay, well, seeing around the corner, to be able to predict what a doctor needs on a on a project or on an acquisition or whatever it may be that that's, again, we're We're specialists and an experts in the industry. I just encourage people to talk to them. Because whatever your practice might need in the future, you want to have someone that is has great experience, again, just like an implant, right? Like, don't like if someone doesn't do implants every day, and you need an implant, and that that doctor decides to take that case on, what's the likelihood of, of it going smooth or not? I don't know. Right? Like, like, that's why specialist exists, right? You go to them for that problem?
Phil Cole 36:16
Yeah, I think the other thing is important for anybody that's listening is also though, when it comes to lenders, I think it is important to interview your your lender a little bit, because I will tell you, depending on the bank, and sometimes not the bank, the person, you mentioned a good thing, because the one of the things that I hear a lot is as well, I was told to go to a bank, because they'll follow me, right, and they'll always have someone to talk to. And I always tell them, you know, that I can see where that's true. You know, where your banker is your lender, there's some banks out there that have a, you know, a national health care lending. Set up that you the local banker can do. But I do think that once again, that's the relationship part of the of the thing of the, you know, deal of the transition, that sometimes gets lost, because of maybe the banks out there that maybe have a bigger presence. But once again, I always say, a lender is a lenders can be good, and they can be bad, depending on what kind of relationship that they want to have with their person. So for example, you I've had several opportunities to work with you. And you're all in on your customer. Versus I know that, you know, we do I have buyers or I have buyers that have had a practice for a while and say, Yeah, I once I got the loan, never heard from again, never heard from her again. So I think that is important ask interview a little bit, you know, to make sure that you see what you're getting. Because I do think that even though you're a lender, and you know, you're going to pass the day to day stuff off, I still feel like that lender needs to be able to have something where there's that relationship a little bit to know that, okay, in five years, I bought this practice, but in five years, I want to take it to the next level that they they know who to go back to and it's not one of those things where I think like the thing that you described, is exactly that problem is is is they they work with somebody, they got passed off, they've never heard from him again. And so what what do I switch to? Well, I just, you know, so and so and so and so said that they got their loans through, you know, First State Bank, so I'm just gonna go to the local bank, you know, and do it. And it's like, now, if you would have, you know, that relationship, go back to that person, and let them take care of it. Because I, I agree with you 100%, you get snagged in some of those so bad. We're doing a rebuild project right now. And that's exactly what's happened. The bank only was doing so much. And now it's like, okay, but we still have $150,000 in equipment. And now you gotta find a bank that's willing to do that loan without wanting the first lien on everything, right. And so now you're now you're scrambling for $150,000. So, that's just my two cents on that.
Rob Borcherding 39:35
Ya know, and you're and you're right, and it's it's again, edgy, like anybody who's a practice owner or aspiring to be a practice owner. It's just educate yourself, right? Educate yourself on how the programs work. Every lending institution, every bank, you know, does things their own way. But there's universal kind of just parameters that we all we all kind of watch, you know, and and we all kind To abide by and then and then you get, you know, some differences and in different programs. And if you know you're buying a practice or starting a practice or you have a practice and you know, you need something in the future, you know, you, hey, gosh, I like to have like, just like, hey, I bought this house, but I know it's a fixer upper. And I know we want to have five kids. And it's a two bedroom. Well, you know, you're going to need more bedrooms, right? So if you're aspiring to be a doctor that that wants to have multiple associates, you know, you're getting a bigger space in the future. And that's where you want to go. Educate yourself on how that might look. Today for your practice, and in just encourage yourself to understand the future and how those programs work today and how they might work tomorrow. So then you make a good decision, because unlike your mortgage on your house, when you do a loan with a practice lender to switch and go to another lender, because they don't do what you're trying to do. Like you said, you can only do typically things with one bank, you can't have multiple liens on a practice on like a house that could do my mortgage with Wells Fargo and I could do my equity line with Bank of America. And they'll play fine, because there's a first mortgage second mortgage, right? Well, that's, that's not how practice lending works, unfortunately. So just educate yourself and look past the loan. Look past what you're doing today and what you might be doing tomorrow. Look at the other strings attached to that loan. Do I have to bank with that bank? What is the banking program? What are the fees associated with that? What are the pros and cons? Just because it's it's, you're you're doing something for your livelihood, and your profession and your family and your career, and just have a financial partner that that will help you in the future and just understand that, and that, hey, if all you need is a loan, and that's all you're ever going to do good. You know, you know what your options are. And you know what you could do there. But if you have plans for expansion and growth, just educate yourself. Do it today, because you might pay for it tomorrow if you don't educate yourself today.
Phil Cole 41:53
Yep, I agree. 100%. Well, actually, Rob, that was a pretty good recap of of some things and stuff too. So that would I really appreciate it. Well. We could go on and on with this whole situation. So but I really want to thank you for being here today. And for giving us a history lesson a little bit and information that definitely can. Well, hopefully people, like you said will do their investigation or research and be able to make some really, really good decisions not for just the now but also for the future. So thanks once again for coming on, and helping us educate ourselves.
Rob Borcherding 42:38
What it's about right, just educating people and helping them make good decisions for whatever they're doing right just like you and you're trying to help somebody sell the practice and they have a business broker that does one dental deal a year like there's there's some differences with your expertise, right. So that's, that's what we're all here to pay it forward. So thanks for having me, Phil. And you guys do a wonderful job and just appreciate being invited. No problem.
Phil Cole 43:04
So as always, if you enjoyed our show, please rate review us on Apple Spotify, wherever you get the podcasts. Once again thanks again for Rob from panacea financial for coming on and giving us this information. I'm your host Phil Cole a and thank you for listening. Everyone Have a good one.
