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Veterinary Practice Financing Through the SBA 7(a) Loan Program
In 2017, veterinary practices and animal hospitals employed nearly 400,000 people across the U.S., while generating a staggering $42 billion in revenue. If you’re a veterinarian or animal hospital owner interested in purchasing or expanding your business, an SBA 7(a) loan could be your best option
- SBA 7(a) Loans for Veterinarians and Animal Hospitals
- Buying Out a Veterinary Partner
- Building a New Veterinary Practice or Animal Hospital
- Refinancing a Veterinary Practice
- Purchasing or Renovating a Veterinary Practice
- Purchasing Veterinary Equipment
- Case Study: Buying a Vet Practice in Columbus
- Using an SBA 504 Loan for a Veterinary Practice
- Related Questions
- Get Financing
If you’re a veterinarian or animal hospital owner interested in purchasing or expanding your business, the SBA 7(a) loan offers many attractive benefits. With highly competitive interest rates, long loan terms, and the ability to fund woking capital, the 7(a) program could be the ideal choice for many veterinary entrepreneurs.
SBA 7(a) Loans for Veterinarians and Animal Hospitals
SBA 7(a) loans can provide terms of up to 25 years for commercial real estate, up to 10 years for equipment financing, and up to seven-year terms for financing working capital. These loans can offer amounts of up to $5 million and are offered by SBA-approved credit unions, banks, and online lenders across the U.S. Many veterinarians decide to use SBA 7(a) loans to buy veterinary equipment, pay employee salaries, or market their businesses, while others may want to use it to refinance debt.
Overall, SBA 7(a) loans can be utilized for a variety of purposes, including:
Buying Out a Veterinary Partner
If your veterinary partner is leaving, and you’d like to purchase their stake in the practice, an SBA 7(a) loan could be a great way to do so.
Building a New Veterinary Practice or Animal Hospital
From landscaping to furniture, lighting, and alarms, SBA 7(a) loans can fund pretty much every part of the construction process.
Refinancing a Veterinary Practice
If you want to refinance the debt on your current veterinary practice, an SBA 7(a) loan could be a good way to do so. However, not all debt can be refinanced with 7(a) loans— only debt that was specifically used for eligible business purchases (working capital or commercial real estate.)
Purchasing or Renovating a Veterinary Practice
Veterinarians who want to improve their current practice or buy an existing practice can also do so through the 7(a) program.
Purchasing Veterinary Equipment
Veterinarians can use SBA 7(a) loans to buy equipment, though they can typically only do so as a component of a larger loan package.
Case Study: Buying a Vet Practice in Columbus
Allen, an experienced veterinarian, had always dreamed of owning his own veterinary practice. After years of working at various clinics in Columbus, Ohio, he came across the perfect opportunity to purchase an established practice in a prime location. However, Allen needed financial assistance to make his dream a reality.
He decided to explore the possibility of securing an SBA 7(a) loan to acquire the veterinary practice. Allen started by conducting thorough research on the practice's financials and client base to ensure it was a viable investment. He also prepared a comprehensive business plan to present to potential lenders, detailing his vision for the practice and his plans for future growth.
The veterinary practice was on the market for $750,000, and Allen knew he needed to come up with a 10% down payment, which amounted to $75,000. He had some personal savings but also reached out to family and friends to help him gather the required funds. With the down payment secured, Allen approached an SBA-approved lender with his loan application.
Allen's solid business plan, combined with his extensive experience in the veterinary field, helped to convince the lender of his ability to successfully run the practice. The lender approved Allen for an SBA 7(a) loan of $675,000, covering the remaining cost of the practice.
With the SBA 7(a) loan, Allen successfully acquired the veterinary practice and began implementing his plans for expansion and improvements. He updated the clinic's equipment and technology to provide better care for his patients and expanded the range of services offered. As a result, Allen's veterinary practice has continued to thrive, attracting new clients and retaining the existing ones.
Using an SBA 504 Loan for a Veterinary Practice
The SBA 7(a) may be a great choice for the vast majority of veterinarians who qualify, but those looking to finance the construction of larger animal hospitals may find themselves better off with an SBA 504 loan. SBA 504 loans are specifically designed for funding commercial real estate projects (not working capital), and therefore offer lower interest rates and slightly larger maximum loan amounts.
Related Questions
What are the eligibility requirements for a veterinary practice to qualify for an SBA 7(a) loan?
In order to qualify for an SBA 7(a) loan, veterinary practices must meet the following eligibility requirements:
- The business must be a for-profit business located in the United States.
- The business must be small according to SBA size standards.
- The business must be able to demonstrate a need for the loan.
- The business must be able to demonstrate the ability to repay the loan.
- The business must be able to demonstrate that other financing is not available.
For more information, please visit https://sba7a.loans/sba-7a-loans-small-business-blog/veterinary-practice-financing.
What are the advantages of an SBA 7(a) loan for veterinary practices?
The SBA 7(a) loan program offers a variety of advantages for veterinary practices, including:
- Up to 25 years for commercial real estate
- Up to 10 years for equipment financing
- Up to 7-year terms for financing working capital
- Amounts of up to $5 million
- Can be utilized for a variety of purposes, including buying out a veterinary partner, building a new veterinary practice or animal hospital, refinancing a veterinary practice, purchasing or renovating a veterinary practice, and purchasing veterinary equipment
What are the maximum loan amounts available through the SBA 7(a) loan program for veterinary practices?
The SBA 7(a) loan program offers up to $5 million for qualifying small businesses. This loan can be used for a variety of purposes, including buying out a veterinary partner, building a new veterinary practice or animal hospital, refinancing a veterinary practice, purchasing or renovating a veterinary practice, and purchasing veterinary equipment. Source
What are the repayment terms for an SBA 7(a) loan for veterinary practices?
The repayment terms for an SBA 7(a) loan for veterinary practices depend on the purpose of the loan. For commercial real estate, the loan can have terms of up to 25 years. For equipment financing, the loan can have terms of up to 10 years. For financing working capital, the loan can have terms of up to 7 years. Source
What documents are required to apply for an SBA 7(a) loan for veterinary practices?
To apply for an SBA 7(a) loan for veterinary practices, you will need to provide the following documents:
- SBA Form 1919 (borrower information form)
- SBA Form 912 (statement of personal history)
- SBA Form 413 (personal financial statement)
- Business and affiliate financial statements, including a balance sheet, profit and loss, and income projection
The SBA allows applicants to get help (for example, from a lawyer or a translator) filling out the application paperwork, but your lender will be required to submit information about who gave you help to the SBA, so you’ll need to document who this person is as well.