Loans for Veterinarians: How to Find the Best Funding Option for Your Practice
Updated August 5, 2022
Veterinarians have special needs when it comes to cash-flow, improvements to their practice and planning for future growth. Simply being “in the black” is not enough for a veterinarian’s long-term financial success or expansion.
Loans for Veterinarians: Why You Need Them
Whether you’re just starting out, making improvements to the practice or expanding services, there are several reasons that may prompt you to consider loans for veterinarians:
- Acquiring a practice, whether buying an established one or opening a new start-up business
- Renovations and construction within an existing practice
- New equipment for diagnostic and treatment
- Working capital to help you get started and keep daily operations going
- More staff to increase productivity and growth
According to entrepreneur.com, you must adapt your practice to stay on top of the latest in treatment options, offer the most comfort, and keep up with the volume of demand for service. Your customers come first.
Once you decide you need a loan, the bank may seem like the most obvious place to shop for a solution. While it is true that they will probably want to do business with you, what you really need to consider is how customized their loan product be and how much risk will you be taking on.
There are certain restrictions hidden within the terms of a bank loan, so shop for the best terms and service and understand the fine print. Know your risks if the loan goes into default and if the terms actually put your personal property in jeopardy as well. Understand the repayment schedule and analyze if it is realistic, based upon your practice and income.
A veterinarian practice requires expensive equipment, specialized insurance, and adequate cash flow for daily operation costs. This all adds up quickly and nothing can cripple a thriving veterinarian practice more than a lack of capital or cash flow.
There is a different borrowing product to fit just about every situation, and several types of lenders to choose from.
Bank Loans for Veterinarians
Banks may be willing to consider your loan if you have good credit combined with the collateral your practice can offer up, but you could be put through an extensive application process and still be denied. According to Forbes.com, most business owners don’t meet the tough lending criteria and less than stellar credit scores can trigger a red flag on your application.
If you qualify, you still have things to consider:
- Does the loan offer the most safety? Is it flexible and fit your needs?
- Does the loan maximize your ability to grow your business, but also allow you to create wealth (savings)?
- Banks take their time in providing answers. Plan on at least 30 days to process your loan.
- Underwriters will scrutinize everything about your finances from your credit score, to business and personal tax documents.
- Bank loans for veterinarians may demand a personal guarantee for your practice. If you default on the loan you risk your personal credit, finances and property.
- Your business plan must include fine details about your practice including a list of your competitors and your strategic marketing plans, tax returns and bank records, and usually a substantial amount of collateral in case you cannot repay the loan.
- Bank loans can be difficult for start-up practices to obtain because they lack the three-year required credit history.
Small Business Administration (SBA) Loans for Veterinary Practice
The SBA offers lending solutions to small businesses like veterinarian practices. When seeking loans for veterinarians, borrowers need to be prepared for an application process that is very detailed, lengthy and requires lots of financial and business management documentation. The reason behind the lengthy application is the SBA, a government agency, guarantees your loan and then connects you to one of their partner lenders. You are basically trying to win the approval of the SBA and a bank.
Things to consider:
- Your personal credit score, your credentials, and managerial experience within a practice may be scrutinized as part of the approval criteria.
- The SBA guarantees these loans provided by its partner lenders, usually banks. The application and credit scrutiny is more rigorous.
- You are dealing with a government agency. It can take 90 days or longer to process your loan application.
- There is a required amount of collateral. Your liability will vary depending on which loan product you choose, but you will need to understand all the fine print.
Alternative lenders for veterinarians
Alternative lending is where many small businesses are turning today for simple, easy and flexible terms in financing. These lenders typically offer several small business loan options and may include ways to limit your risks, such as through a repayment schedule that changes to match your sales volume.
Things to consider:
- Alternative lenders may focus more on what you have built for your business and its overall potential, rather than your past credit history. If your credit score is less than perfect you still have funding options.
- The application process is simple, light on documentation and not time consuming.
- The approval process is quick, so if you are looking to seize a new opportunity for your practice you can do so with confidence.
- The repayment schedule can be customized to ease your risk and assure greater success.
Lines of credit
A line of credit is only for short-term needs like for buying new technology or equipment. Similar to a credit card, but with better rates, you will only be charged interest on the amount of funding you utilize.
Things to consider:
- Lines of credit usually offer good interest rates, but are not for your larger, long-term needs like purchasing a new practice.
- Lines of credit have repayment terms of about 12 months.
- Your credit score may still be a factor in approval depending on the lender.
How to Make a Veterinary Practice More Successful
Being a veterinarian is perhaps the most rewarding career possible for an animal lover. It requires one to wear multiple hats, though, including that of a businessperson. Veterinary practices need careful planning, and you need to make shrewd business decisions in order for it to be profitable. The following tactics can be used to help your veterinary practice grow and become more successful.
Set the Scene
Pet owners are likely to spend a fair amount of time in your veterinary office. Consider regular check-ups, visits for shots, illness visits, and other events that will lead a pet owner to bring their beloved cat or dog into your office. You want clients to walk into an office that looks and feels welcoming. Creating a crisp, clean, and pretty veterinary office is important. The office also needs to be efficient, client-friendly, and comfortable.
In order to attract new pet owners to your office, you need to also have an attractive exterior. Simple things, like painting trimwork or adding a new door can give your business more curb appeal. You may want to have a little fenced-in area outside of the office where pets can get off the leash and burn some energy on the way in or out of your office.
You should place eye-catching signage outside that is appealing to those that patron your business as well as those that pass by. The signage should make it clear that your establishment is a veterinarian practice. If possible, your sign(s) should include your expertise and a summary of the services that you provide.
Hire Quality Staff Members
The most important consideration when building a successful veterinary practice is hiring a team of professional employees who care about animals and people. The connection that pet owners feel to your staff members may be what keeps them coming back and recommending it to pet-loving friends. Staff members need to be able to provide excellent customer care as well as animal care. In order to hire dependable people, you need to pay them a fair salary.
Give Back to the Community
According to the American Veterinary Medical Association, veterinarians who successfully expand and grow their practices at a fast rate often give back to their communities and invest in community events. In doing so, they help to build up the reputation of the veterinary office while at the same time, the practice is doing something good for the benefit of others; it’s a win-win scenario. In order to effectively give back to the community, sometimes you may need to invest in equipment, such as a van that makes it possible for you to take your services on the road.
Make It All Work
In order to make these great improvements to your veterinary practice, you need business funding solutions. Working capital loans empower you to quickly grow and expand the practice. This funding option can provide a quick influx of money to cover short-term cash needs. Money is delivered directly into your business bank account at a rapid pace. You’d typically have to wait no longer than 48 hours.
As you tend to your veterinary practice and perhaps want to expand it even more later on, business funding solutions like Credibly can help you fulfill every career goal that you dream up. This stellar brand of small business funding provides cash to your business bank account when you need it fast.