Starting a Dental Practice: Tips on Financing

Chris Pistorius (00:03):

Hi, everybody. This is Chris Pistorius again with the Dentist & Orthodontist Marketing Podcast. Thanks for joining us today however you’re viewing us, live on Facebook or on the podcast channel, we appreciate you taking the time. So, today I’ve got an excellent guest for us. We are honored to be joined with Gabe Vlahos. Gabe is with Wells Fargo and he is a business development officer there, and he does an excellent job helping people in a lot of industries, but specifically the healthcare industry in securing loans for acquisitions or remodeling, lots of other stuff. But I’m going to go ahead and let Gabe explain all of that. Gabe, thanks so much for joining the show today.

Gabe Vlahos (00:54):

Thank you, Chris. I’m glad to be here.

Chris Pistorius (00:57):

Awesome. Well, hey, why don’t you tell us, Wells Fargo, obviously a huge organization, why don’t you tell us a little bit more specifically about what you do and how you help dental practice owners for instance?

Gabe Vlahos (01:10):

Yeah, absolutely. So just to give you an idea, a little bit about my background and how I came about this current position. I was actually born and raised in Brazil and moved out here in the US about 12 years ago to actually go to business school and play college tennis. Got a full ride scholarship, played number one, did all of that good stuff, graduating 2014 and then Wells Fargo became my first employer fresh out of college. So, I did a customer sales representative position for a year, step aside and opened my own business to put myself through an MBA in marketing program. And I was essentially coaching tennis to high-level high school kids here in Colorado. And did a little bit of consulting for startups and small businesses and came back to Wells three years ago.

Gabe Vlahos (02:05):

I was in a very analytical position in my previous role and have been recently joined the small business development group about four months ago. So we’re heavily involved in the healthcare space. We have a full division here called Practice Finance and essentially what we do, we help essentially dental labs, care homes, mobile nursing, private surgery centers, private practices. We really specialize, guiding and really be supportive for the practice owners in the dental, veterinarian, optometrists and medical fields in every stage of their career from start to finish, even recent college graduates, helping them start their own practice up until retirement mode. And I’m happy to explore more about that too, with you.

Chris Pistorius (03:01):

Awesome. What school did you play tennis for?

Gabe Vlahos (03:04):

Metro State, here in Downtown.

Chris Pistorius (03:07):

Nice-

Gabe Vlahos (03:07):

Denver, Downtown.

Chris Pistorius (03:09):

… That’s awesome. So do you still play quite a bit?

Gabe Vlahos (03:12):

I do. I do. I actually still coach a little bit on the side here and there. Sometimes I get some requests from high school kids that want to go to the park and hit some balls. So I try to keep in shape that way too.

Chris Pistorius (03:25):

Right. Yeah. That’s awesome. That’s a great story. Awesome.

Gabe Vlahos (03:29):

Thank you.

Chris Pistorius (03:29):

So specifically, obviously we work with dentists and a lot of what we do is around dentistry, but it can really be modeled in all of healthcare. But talk to me a little bit specifically what the market looks like right now in terms of lending? Has COVID had any sort of an impact towards lending right now?

Gabe Vlahos (03:50):

Yeah, absolutely. So, with COVID, what I like the most about what we do is the relationship aspect of things. We’re not just a lender that looks at numbers, provides you with an interest rate, the term sheets and that good stuff and we would tell you what the monthly payments are going to look like, there’s the vision, was created 30 years ago and what we do, we put a team of consultants behind the doctors to really make sure that every step of the way in their career, they’re set up for success. So we have consultants that have been doing this for decades, and they actually have the best resources for say, HR questions or marketing, or they know the best vendors, the best attorneys to help you out, best CPAs, and all that good stuff.

Gabe Vlahos (04:41):

So, having that extra cushion and layer of security has really helped our dentists throughout COVID, knowing that they’re not alone. They have resources to help them out in every step of the way. The fact that interest rates have been so low recently as you might know, we are taking care of a lot of people that want to either refinance or start their own practice as we offer up to 100% financing. So literally doctors have that availability, which is something that a lot of other banks don’t offer up to 10 years fixed rate, which is pretty incredible too.

Chris Pistorius (05:24):

Wow. So, I like what you said there. It’s not all about right now, this second, it sounds like when you establish a relationship with a dentist, for instance, it’s all about growing with them and you’re there all along the whole journey, if you will. And if they need something five, 10, whatever years down the road, it sounds like that relationship is good as long as they’re in business, right?

Gabe Vlahos (05:51):

Exactly. Exactly. In fact, when they start banking with us and we helped them out with any lending opportunity, they automatically get a group of certified consultants, if you will. So year one, we want to make sure that they’re successful when everything’s working well for their practice. So, we actually have reports in the industry and we can kind of compare similar dental practices and kind of compare the numbers to make sure that they’re set up for success. And if the numbers are not looking that great, we have resources to help them out. So we’re definitely not just a lender that are providing the working capital, we’re actually supporting them in many, many different ways.

Chris Pistorius (06:39):

I see. Would you say, based on… I remember I asked this a little bit from new practice owners, is it harder right now for instance a dental practice to be approved for financing because of COVID or is that not the case?

Gabe Vlahos (06:54):

No. Absolutely not. We actually have an awesome relationship with the best Dental schools nationwide. And what we like to do actually is we have resources in those schools and we actually get in touch hands-on with students that are about to graduate. And what we’d like to do is really understand where their aspirations are, maybe they don’t really want to become their own boss, but a lot of them do. So we prepare them from day one. A lot of them don’t have that financial background. So we actually even help them with business planning. Sometimes they have some sort of business plan going on, but most of the times they don’t. So we help in literally every step of the way. And knowing that they’re going to graduate fresh out of school with a lot of debt-

Chris Pistorius (07:46):

Yeah.

Gabe Vlahos (07:47):

… we don’t really look at that as a negative factor because we expect that to be a thing already. And for that reason, we provide up to 100% financing, which is very unique. So, it has not been a negative impact COVID at all for us. In fact, we’ve been helping quite a bit of startups get started.

Chris Pistorius (08:08):

I see. And before we went on air when we were kind of discussing what you do and how you do it, something I hadn’t really thought about in terms of funding is that you do loans, not just for buying a practice or starting a practice from scratch, but you can use that money for other things like remodeling an office. Is that right?

Gabe Vlahos (08:29):

Exactly. Exactly. So some of the things that we do besides startups, we do acquisitions. That’s probably one of the most popular ones, equipment financing, remodeling, relocating. Sometimes dentists want to get out of the rental space, if you will, and actually acquired their own space. So, commercial real estate purchase, we do a lot of that, buy-ins, buyouts, refinancing. And remember, the products that we have within our Practice Finance group were created based on the industry. So, every single service that we offer, were created thinking about setting doctors up for success. So it’s different than the regular lenders that already have a set of products and services that they offer from a variety of different industries. Ours is very, very specialized. And like I mentioned, we can serve a variety of different purposes with lending.

Chris Pistorius (09:31):

Sure. That’s awesome. Tell me a little bit about somebody that’s watching this and they’re thinking about qualifications, like would I qualify for instance for alone? What do you guys look at in terms of a dental practice, for instance? What things are you really looking at and studying and what are the most important things to be able to qualify for a loan?

Gabe Vlahos (09:51):

Yeah, that’s a good question. I would say cash cash flow is king, right? So obviously having a decent credit, typically over 700 is what we like to see. That’s very critical and having a decent source of income. And again, for startups, we provide up to 100% financing, but depending on where they are right now, if they’re dentists, we want to see the income coming in. We typically, don’t prefer seeing a whole lot of outstanding debt with big balances, that kind of stuff. So, knowing that they’ve been good creditors and really paying out their debt, it’s really what matters the most for us. So we want to see good cash flow, and we want to see that they have been doing a good job paying off their current debt.

Chris Pistorius (10:44):

Sure. Okay. That makes sense. So tell me a little bit, I ask everybody this no matter what industry you’re in, but there’s a lot of other lenders out there, right? You’re competing certainly. And I always ask people, what’s your unique selling proposition. And I think you touched on a little bit of this, but what makes you different? Why should somebody choose you as a bank versus maybe somebody else?

Gabe Vlahos (11:08):

Yeah, Chris, this is a good question. When I say that we supported doctors in every stage of their career, I mean just that. It starts with our involvement with several large dental schools in the nation. We have business partners that work with colleges to help doctors understand the availability of financing and options that are there for them when they emerge into the market, where we have a team of private consumer bankers that help the doctors while they’re in school and doing personal financial planning as well. Then once the doctor has decided to enter the practice ownership space, then we have a specialty team of lenders and relationship managers to kind of navigate the world of practice ownership and business banking.

Gabe Vlahos (11:57):

We also have a practice consulting team that helps the doctors with marketing, HR questions, attracting and hiring the right staff, recommendations for the best vendors, the best architects, the best contractors, best manufacturers out there, which is just a complimentary add-on to the business that they do with us. There’s no other bank that is offering that specialized of a plan in industry.

Chris Pistorius (12:23):

Yeah. That’s awesome. There’s a lot of support services that you can offer that a lot of other folks can’t. When you do a loan for a dental practice, can some of that money be put aside for marketing purposes too, or is that something that you don’t really want to lend for?

Gabe Vlahos (12:43):

That’s a good question. So, typically with business planning, what we want to see is a proper allocation of the capital. So, we want to see where the money is going exactly. Whether it’s going to equipment finance, whether that’s going to HR purposes, merchant services, building a website or marketing purposes. Yes, we definitely want to make sure that part of the money that’s being lend to them is being allocated properly and marketing is so important, that’s why our consultants tend to make recommendations quite often in marketing say, COVID was a big hit. So, a lot of small businesses had to make sure their website was more user-friendly and had capabilities and features that they didn’t have before. So definitely.

Chris Pistorius (13:32):

Yeah, I think you’re right in all of those aspects. Let me ask, where do you see the lending industry specifically in health care, where do you see that growing or expanding over the next five years as it comes to your business?

Gabe Vlahos (13:47):

Sure, sure. Good question. Wells Fargo Practice Finance, our focus on healthcare is really a top priority for our small business banking group, to be honest. So, this concept of having doctors being surrounded by a team of experts in the field started just a couple of years ago, and now we’re still growing the model and through multiple footprints and within our bank. So, it’s exciting to watch the impact that we have had in the past, especially in our own communities here in Colorado, watching new practices open in developing areas, helping the doctor grow their dream practice, or even being that support system that a doctor really needs when transitioning out of practice and help facilitating the sale so their legacy can live on their practice. So ultimately, we will and we currently aspire to be the best resource for dentists, for specialized lending and guidance.

Chris Pistorius (14:50):

Awesome. Okay. So, talking about the process, how does this even get started? So let’s say somebody reaches out to you, they’re interested in maybe acquiring a new practice. What does that initial process look like? And then how long does the process take from start to finish typically for a loan?

Gabe Vlahos (15:11):

Yeah, no, that’s a great question. So, I’m in the business [inaudible 00:15:14] of connecting people, I’m in the business of making dreams come true. I’m the first point of contact here within the bank in our small business banking group. So, if they are interested, they can definitely reach out to me. And what I do, I like to have a meaningful conversation to really understand what their goals are. If they have a current practice, I want to understand, is their main goal to reduce costs? Is it to grow and expand the business? Do they want to retire anytime soon? There are many different ways and different solutions. So my goal is to really understand, and I’m the connector. My goal is to connect that specific person to the right team of individuals that will then really take that relationship to the next level.

Gabe Vlahos (16:02):

In terms of getting the financials from them and helping them out, a lot of people are very organized with their financials and they can get those to us fairly quickly. Some people, they have their CPAs that they work with. Some people don’t even have a CPA. So, it can take a little bit longer, but things can get moving fairly quickly, maybe within 45 days. We’ve seen things moving fairly fast here.

Chris Pistorius (16:32):

That’s awesome. Great. So tell me, what are your additional nuggets of wisdom, if you will? Maybe somebody that’s watching this and they’re thinking about, “I kind of want to buy a practice.” Or, “Maybe I want to buy another practice.” Or maybe a student that’s coming out of school and trying to decide if they want to become an associate or if they want to buy their own practice, what would you say to them? What do they need to really get together and be organized with in terms of making that decision?

Gabe Vlahos (17:03):

Gosh, that’s a good question. I would say if you are a doctor and you have been working for another practice or corporation and you are interested in a roadmap to ownership, we are the best starting place and you’re not going to pay consulting fees with us. It’s all complimentary service. We create a team that surrounds you to really achieve your goals. So, it doesn’t really get much better than that to have that specialized team with that amount of experience behind you.

Chris Pistorius (17:36):

Right. So with you, it’s not all about just lending the money, it’s also about connecting them with people that can help them with a multitude of things from construction, to remodeling contractors, to marketing people, whatever it may be, right?

Gabe Vlahos (17:51):

Exactly, exactly.

Chris Pistorius (17:52):

Okay.

Gabe Vlahos (17:53):

We’re all about the customer experience. So with us, there will be no 1-800 numbers. They’re not going to be bouncing between calls when they call the 1-800 numbers. They will have a team of experts that will be there for them whenever they need, looking now for their business and proactively calling them to make sure everything’s running smoothly.

Chris Pistorius (18:13):

Awesome. Awesome. So Gabe, tell me if somebody is watching this and they’re interested, I know you’re stationed here in Colorado, but you can help people from all over the country, right?

Gabe Vlahos (18:25):

Yes, absolutely. So, we are nationwide. So, if they want to reach out to me, they don’t need to be in Colorado specifically. They’re welcome to reach out to me. I don’t know if we’re going to leave a phone number-

Chris Pistorius (18:38):

Yes.

Gabe Vlahos (18:38):

… somewhere here, but there will be my phone number. They can reach out to my phone number or my email, and I’ll be sure to get the ball rolling as soon as possible.

Chris Pistorius (18:49):

Awesome. Yeah. Why don’t you… If you could maybe, and I certainly will put it in the post too, but maybe just tell people right now best way to reach out to you and get the ball rolling?

Gabe Vlahos (18:59):

Sure. So my number is 303-335-5735. Again, 303-335-5735. And email gets a little tricky because my last name gets funny to pronounce sometimes, but it’s essentially gabriel.t.vlahos, V-L-A-H-O-S@wellsfargo.com.

Chris Pistorius (19:24):

You’ve got the same problem I do. My last name is Pistorius and I can’t even put it in my email address. People get lost, but I’ll be sure to post that in the Facebook post and on the podcast so people can easily reach out. So, hey, Gabe, I really appreciate your time. I know how busy you are. I think this is very helpful to anybody in the dental industry that is looking to maybe make that next move. So, thanks so much for your time today.

Gabe Vlahos (19:51):

Thank you, Chris. Very honored to be here and we’ll sure to be in touch with you.

Chris Pistorius (19:55):

Absolutely. And thanks to everybody watching. This was another episode of the Dentist & Orthodontist Marketing Podcast. Please reply with the comments of what you thought of the episode. Subscribe, do whatever you need to do, but make sure you watch our next episode that should be coming out in about a week. Thanks so much and we’ll talk to you soon.