About 42% of veterinarians are practice owners, according to the American Veterinary Medical Association. If you are considering joining this group or already are one and need extra funds, a veterinary practice loan could help. Here are some tips and information to help guide you.

Types of Veterinary Practice Loans

Whether looking to start your first solo equine practice or wanting to open your second or third emergency care practice, there is probably a veterinary practice loan that is built to help you. Some examples of veterinary practice loans include:

• Partner Buy-In
• Acquisition
• Expansion/Relocation
• Startup
• Refinance/Consolidation
• Working Capital
• New Equipment
• Line of Credit
• Commercial Real Estate

Tips to Help You Qualify for a Veterinary Practice Loan

Here are some tips for qualifying for veterinary practice loans. These pointers are primarily for first-time owners. Some may not apply to veterinarians with existing practices.

Review your personal financial statement

A personal financial statement gives you a snapshot of your wealth at a specific moment in time. It takes into account your assets (what you own) and your liabilities (what you owe) to find your net worth (assets minus liabilities).

Assets include liquid assets (assets that can easily be converted into cash in a short amount of time: cash, money market instruments, and marketable securities), large assets (houses, cars, boats), investments (bonds, stocks, CDs, mutual funds, and real estate), and retirement.

Liabilities include debts owed (cars, homes, credit card balance(s) if not paid off in full, student loans) and other debts.

Maintain or improve your credit score

Credit score is an important factor when lenders consider veterinary practice financing applications. Individuals with “excellent,” “very good,” even “good” scores will likely qualify for lower interest rates and more favorable loan terms, depending on the lender.

Young veterinarians can struggle with credit score due to the debt they may have had to take on during veterinary school and training. If you don’t have a favorable score, there are lenders who will work with you to secure financing, but taking the time to improve your score could pay off.

Find tips for improving your credit score.

Understand your debt-to-income ratio

A debt-to-income ratio compares how much you owe each month with how much you earn. Lenders use your debt-to-income ratio to evaluate your ability to take on another payment. For veterinarians, this metric may include student loan debt, personal loans and credit card debt.

Learn more about debt-to-income ratio here.

Finding a Lender

Choosing how you will finance is a complex decision that can affect you and your business for many years as you pay off the loan over time.

For veterinarians, it’s essential to find a lender who understands the unique financial challenges and opportunities in veterinary medicine. Consider lenders who specialize in veterinary practice financing or have experience working with veterinary professionals.

Focus on more than just rate

When choosing a lender, don’t focus only on rate. Consider the lender’s terms and rates, structure and servicing, merchant services and future support.

Another important factor to consider is the impact of the prepayment agreement, which can tie you to your lender or bank with a fee if you decide to switch banks. Many lenders require you to stay with them for up to five years with a prepayment fee to make up for the interest they would have earned on their initial low-rate loan.

Choosing a loan based solely on rate today means your lender may not be able to meet your future needs, resulting in a prepayment penalty if you have to switch lenders.

This series of events could negate your rate-based decision and may cost you even more money than what you saved in the first place with the lower rate.

Finding a lender that has the best program and will provide you the best support is likely the best course of action as you make this important business decision.

Learn more about choosing the best lending partner for you.

Veterinary Practice Loans Built for You

Practice ownership may be daunting and learning the ins and outs of veterinary practice loans can appear complicated, but it can be an exciting step in your career. If you are ready to make that step, we are here to help.

If you are looking for the right loan for your veterinary practice, we are here to help. To learn more about our financial options, visit our Panacea Practice Solutions page.