For orthodontists just starting out in the professional field after school, financing a practice and getting it off the ground can be a challenge. That is especially true with a mountain of student loan debt.
That’s where a new service from business services company Newtek Business Services, in partnership with Morgan Stanley, enters the picture.
Newtek provides a program called Management of Orthodontic Practice Systems to orthodontic graduates of Temple University. The program helps young orthodontists starting out in their careers by providing outside services for a lot of the back-office components of a practice.
Newtek provides human resources and insurance services early so orthodontists can save on the extra costs of hiring people for those jobs in the office. Newtek also helps orthodontists with payment processing to make sure they can accept all forms of payment. Whatever start-up costs might come with opening an orthodontic practice, Newtek helps manage them.
And Newtek trusts that if it gives small business loans to orthodontists, there is less likelihood of them having issues paying back those loans than those in other professions.
“As small business borrowers go, we strongly prefer lending to the medical profession,” says Barry Sloane, CEO of Newtek. “The likelihood of someone being able to go to medical school, get themselves trained, get a license, shows they have tenacity.”
Newtek provides its services all across the country, though the orthodontic management program is unique to Temple. Sloane said that it could eventually be duplicated elsewhere.
Morgan Stanley, independently of Newtek, also gives a 1-day class at Temple each year on the financial management side of orthodontics.
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Favoroso’s top lessons for students in the program at Temple:
- Save first, spend second.
- Diversify your investments.
- Start early and think long term.
- Take advantage of retirement plans.
- Use credit wisely.
[/sidebar]Anthony Favoroso, a Morgan Stanley branch manager, teaches that class along with Morgan Stanley financial advisor Frank Lewandowski. Favoroso says it’s all about filling a need for young orthodontists on a crucial aspect of going into business that they might not always learn about elsewhere.
“Most of these students are young, so we give them examples of saving at a young age,” Favoroso says. “We’re trying to teach them how to do research on…investing.”
The class involves teaching young, soon-to-be orthodontists about the basics of investing, the importance of compounding savings, money markets, an explanation of stocks and bonds and different types of IRAs, and where to find access to all of these different types of savings and investments.
It also teaches students how to diversify their savings, which can be especially helpful for orthodontists who buy a practice and add even more debt to their student loans.
“If they’re going to be using this money for buying a practice, it’s a little different than retirement,” Favoroso says. “We try to teach them the difference between those things.”
That management class is also how students get introduced to Newtek. They can then explore options for taking out loans through the company.
The most important part of the course, Favoroso says, is to fill a crucial financial education gap for young orthodontists who often have a lot of questions.
“When I went to college, there was no investment course, and I was a finance major,” Favoroso says. “We show these students how things work in the market.” OP
A.J. Zak is a freelance writer for Orthodontic Products. She can be reached at [email protected].
