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Most new veterinarians start their careers at established practices. Down the road, though, you might find yourself yearning to start a clinic of your own. When that happens, you’ll need to line up financing to make those dreams a reality.
Fortunately, many options exist for veterinary financing, including small business loans, Small Business Administration (SBA) loans, lines of credit, and more. If you’re thinking about opening your own practice, use this guide to evaluate your veterinary practice financing options.
On this page:
- Veterinary practice financing options
- What to consider when looking for veterinary practice financing
- Common costs of starting a veterinary practice
Veterinary practice financing options
There are a number of financing options out there for veterinarians, including veterinary practice loans from major banks and financial institutions, as well as SBA loans. Let’s take an in-depth look at these loans.
Small business term loans
Several lenders offer small business loans specifically for veterinarians. Bank of America, for example, offers veterinary practice loans up to $5 million. You can use them to start a new practice, acquire a practice, or expand your existing one. Military members and veterans get 25% off fees, too.
Live Oak Bank, Wells Fargo, and Calico Financial also offer specific veterinary loans. If you want to expand your options, you can also consider general small business loans. Terms, rates, and eligibility requirements vary based on which lender and loan program you choose, but here are the general pros and cons of these products:
- Flexible and can be used for buying, acquiring, or expanding a practice
- Large loan amounts
- Fixed interest rates to keep payments consistent
- 100% financing available
- Some programs include business coaching
- Funds are usually released quickly once approved
- Most programs don’t allow residents to apply
- Some lenders may not approve startup practices
- You may need a business plan and detailed financial documents to qualify
- There may be prepayment penalties if you pay off your loan early
For more details and options, check out our guide to business term loans.
Small Business Administration loans, or SBA loans, are another smart way to finance your budding veterinary practice. Though these loans are technically backed by the SBA, they’re actually offered through various banks and credit unions.
SBA loans come with low interest rates and long repayment terms, but you typically need good credit, as well as proven experience as a professional and business, in order to qualify.
SBA loans usually require a lot of paperwork and documentation and, in general, are harder to qualify for than the veterinary small business loans noted above.
- Low interest rates
- Can be used for a variety of expenses
- Long repayment terms mean more affordable monthly payments
- Loan amounts up to $5 million
- The SBA’s Small Business Development Centers can help you apply
- Difficult to qualify for
- Require lots of paperwork
- Sometimes require collateral
- Require a good credit score
- Are usually slow to fund
- Usually require a down payment
For more details, check out our SBA loans guide.
Business line of credit
Another option is a business line of credit. A line of credit essentially works like a credit card, with the lender giving you a credit line you can withdraw from as needed. It’s a good way to borrow money without borrowing too much— ultimately saving you on interest costs in the long run.
Business lines of credit are available through banks, credit unions, and online lenders, and many offer interest-only payments until your draw period expires. They also don’t require collateral.
Unfortunately, they also come with higher (and sometimes variable) interest rates in most cases, because they tend to be riskier for lenders.
- Doesn’t require collateral
- Interest-only payments available
- Allows you to borrow only what you need
- Typically easier to qualify as a new business
- Higher interest rates than other options
- May come with annual fees
- May only offer variable interest rates
- Might require documentation for each withdrawal
For more details and options check out our guide to business lines of credit.
What to consider when looking for veterinary practice financing
There’s a lot to think about when considering financing for your veterinary practice.
If you want to get the best rates and terms possible, you’ll want to take the following factors into consideration before applying for funding:
- Your experience: Generally, the less experience you have, the bigger a risk you present to the lender. This typically means higher rates and a harder time qualifying. If you’re new to practicing veterinary care, you may want to wait a few years until you have proven experience under your belt.
- Your practice: Are you buying an existing practice or starting a new one from scratch? An existing practice comes with built-in customers and business, but a new one? That’s significantly more risk for a lender. If you’re starting a clinic from scratch, you can expect to be held to more stringent standards when applying for financing.
- Your student loan debt: If you’re like most veterinarians, you probably have a good amount of student loan debt to your name. That debt could play a role in what loans you’re eligible for and how much you can take out. If you still have a lot of debt to your name, think about whittling those balances down a bit before applying for your loan.
When you’re ready to apply, you should consider at least a few lenders and loan options. Compare rates, terms, and fees, and talk to a loan specialist about what qualifying requirements you’d need to meet before moving forward. You don’t want a hard credit pull unless you’re confident you’ll get approved.
Common costs of starting a veterinary practice
If you are applying for financing, you’ll want to take out only what you need. Borrowing too much will only mean more in interest over time, so sit down and work out exactly how much you’ll need to accomplish your goals before applying.
Make sure to include these common costs:
- Real estate, if you’re buying or leasing a space for your practice
- Equipment, including exam tables, medical and surgical instruments, kennels, etc.
- Clerical setup, including bookkeeping, accounting, administrative paperwork, and more
- Staffing, if you’ll be hiring assistance, veterinary techs, front desk staff, etc.
- Legal, if you need to incorporate, establish contracts, consult an attorney, etc.
- Insurance, to protect you and your staff from liability on the premises and with clients
- Waiting room and exam room furnishings
- Laboratory needs, if you’ll be testing specimens on-site or conducting other scientific research
- Marketing and advertising, to help get your business’ name out there
If you’re not sure about the exact costs you’ll need, bring in an accountant for guidance. They can help you crunch the numbers and make sure you get it right.
To learn more about small business loans in general, you can check out our small business loans guide.
If you still aren’t sure which type of loan you need, you may want to consider a company like Lendio. Lendio allows borrowers to fill out one application and compare loan options from 300+ lenders, including Bank of America, American Express, Kabbage, and more.
Author: Aly Yale