Dentists are taking risks by loaning more of their own money to their practices as the sector suffers from a lack of credit availability.
The amount of money loaned by directors of dental practices to their own firms was £23.8m in the past year up from £13.5m a year earlier, according to figures published today by finance firm LDF.
“Dentists are still facing challenges in accessing funding through traditional methods, so more of them are ploughing their own income and savings into their practices,” said LDF managing director Peter Alderson.
“However, dental practices are often partnerships, and if a problem arises with another partner it’s risky to have personal savings on the line.”
The data adds to the evidence that credit conditions in the UK are tight overall despite record low interest rates. Recent surveys by the Bank of England (BoE) and accountants EY have found that credit conditions are difficult for small businesses and entrepreneurs. Annual growth in private sector credit only recently managed to sustain a positive level, BoE figures show.
However, some economists maintain that easy credit and low interest rates are keeping alive “zombie firms” that would not be profitable in normal times.