The following is submitted to us by one of our funding partners, Melissa Edwards of Banc of America Practice Solutions (877-330-3339).  For an application, see the pdf below.

 

For the last year and a half  the media has made ratings history telling consumers and small business owners alike that access to capital is next to impossible.  I’m here to tell you this is true---for virtually every other group except Veterinarians.

 

It remains true, even in these late stages of the worst recession since the Great Depression, that Veterinarians are the best risk to finance (with the small exception of funeral home owners).  Banks have long held that the Vet profession is blessed in two ways; Their patients continue to require care even when money is tight and the character and work ethic of Veterinarians has proven to be one that will work as long and hard as it takes to pay their bills and make good on their obligations.  Whether you are associating and thinking about starting your own practice, buying an existing hospital, bursting at the seams and need to expand, or purchasing commercial real estate…the money IS available.

 

Now that you understand your next step is within reach, here are a few key points to help you prepare:

 

Credit – Although banks are still willing to lend to veterinarians more than other small businesses, the credit criteria is more important than ever.  On average, banks are increasing their minimum FICO score criteria for consideration by 20% or more.  A common mistake since the housing bubble burst is the number of clients who were advised to stop paying their mortgage to apply for a balance reduction.  Although, this may help restructure your consumer debt, banks will look at this as a character concern the next time you need financing.  Bank’s perspective: If you’re willing to stop paying for your home, what would you do with your business loan???

 

Liquidity – Banks define liquidity as funds available immediately.  The amount of liquidity a bank may expect you to have is based on your time of licensure and salary history.  The expectation being that a DVM who has owned their practice for 30 years should have more liquid assets than one who has been licensed 3 years and makes $75,000 annually as an associate.  The name of the game in this lending environment is, if a bank wants to lend you the money, keep your own and use theirs. 

 

Million Dollar+ Loans -  “That practice is selling for $1MM+…I can’t afford that kind of debt!”  If I had a nickel for every time I heard that rationale There is a very common misconception in the industry that a high dollar sales price automatically excludes the average veterinarian.  In reality, the most important criteria is whether the venture will be able to pay for its’ own debt as well as the borrower’s personal obligations and still show cashflow.  A practice grossing $600,000+ is typically more able to support your lifestyle than one that hasn’t reached that level.  When performing your due diligence on a new project, concentrate more on the clinical philosophy, location, and culture fit…if these ingredients add up it’s likely the financing will fall into place along with them.  

Mark Twain once said, It usually takes more than three weeks to prepare a good impromptu speech. Consider your "speech" is your next career step -- with the right preparation you'll take it with ease!